Federal and State Decisions affect Health Insurance Premiums for Wisconsinites

Recent news on the health front should give Wisconsinites pause when considering the direction our state is headed related to affordable health coverage.

Earlier this year, the Governor signed Special Session bills into law that limit access to needed healthcare. For example, one provision of the new law will essentially require cash strapped farmers to sell their cows or essential farm equipment to obtain BadgerCare. Another example is a provision that will set in place outside work requirements for caregivers (who already have a full-time, non-paying job) but rely on BadgerCare.

For the state to enforce these new provisions, the federal government, through a waiver process, must grant approval. The state filed its waiver request, which is pending approval by the Trump administration. However, a recent federal court ruling stopped similar plans in Kentucky. The legal wrangling leaves uncertainty for the Governor who hopes to save costs by eliminating BadgerCare coverage for some Wisconsinites.

Those who may lose BadgerCare cannot afford commercial policies. Folks without insurance often delay needed care, end up sicker, and seek care in the Emergency Room. Those without insurance frequently cannot pay for care even though hospitals are required to provide it. To make ends meet, hospitals raise rates for everyone else. Thus, more uninsured folks mean higher costs for all of us.

A recent poll, reported last week in The Hill, found 49% of those surveyed said it is more difficult to afford health insurance premiums, doctor visits and prescription drugs this year, compared to last year. In addition, almost 80% of respondents believe the government should be doing more to make health care more affordable.

However, action at the federal level is making health care less affordable.

The nonpartisan Congressional Budget Office (CBO) pegged the GOP repeal of Affordable Care Act (ACA) individual mandate as accounting for an average ten-percent rise in insurance premiums next year.

The Trump administration abruptly stopped payments under the ACA to help even-out costs faced by health plans. The payments are made to plans that incur high costs from unusually sick patients. The idea behind the policy is similar to the basic idea of insurance – sharing the costs by sharing the risk. The interruption of “risk adjustment” funds brings higher premiums as some health plans face higher than expected medical bills.

Federal officials also announced they were cutting funds for navigators, or outreach nonprofits that help people sign up for health coverage under the ACA. Less money for this important work means less people covered – and fewer people in the pool results in higher costs for the rest of us.

Last month the Trump administration announced it would stop defending the ACA from a constitutional challenge that could affect protections for people with pre-existing conditions. This decision has significant implications for folks in our state. Kaiser Health News reported last week that residents in GOP-led states opposed to the ACA have the most to lose if pre-existing conditions are not protected.

Wisconsin and Texas led the list of twenty governors and state attorneys general that filed a challenge to the constitutionality of the ACA in court last February.

The new Kaiser Family Foundation study estimated at least one in four Wisconsinites under age 65 have one or more pre-existing conditions that could cause them to be denied health coverage, or have a condition excluded from coverage or would be forced to pay exorbitant rates to keep coverage. These conditions could include anything from acne to migraines to pregnancy.

Just living to age sixty means one has a pre-existing condition. Not surprisingly, the study reported data from 2008, which was prior to enactment of the ACA, those of ages 60-64 were most likely to experience insurance denials based on pre-existing conditions.

One answer to rising health costs is to create our own health care marketplace. I authored the Badger Health Benefit Marketplace and introduced it as Senate Bill 359. This uniquely Wisconsin marketplace provides lower cost insurance to owners and employees of small businesses and those who buy insurance on their own.

While Wisconsin rates for individual insurance went up an average of 38% in 2018 over 2017, a system similar in Minnesota dropped costs an average of ten-percent in 2018. Minnesota’s costs for an average low-cost silver plan are expected to drop another 11% in 2019.

Our state must do better at creating policy to provide affordable health care for all.