Public, Lawmakers Consider Wisconsin Governor’s Health Reinsurance Plan

The public got a chance Monday to comment on Wisconsin Gov. Scott Walker’s $200 million plan to reduce health care costs for people purchasing insurance through the private marketplace.

Walker is pushing the idea, along with a plan to bolster rural economic development, as part of what he calls an “ambitious agenda” as he faces re-election in the fall. There’s little time for the Legislature to act, however. The Assembly hopes to finish its work for the year next week, while the Senate is expected to meet only on Feb. 20 and one day in March.

The Legislature’s budget-writing Joint Finance Committee was taking public testimony on both measures Monday before a planned vote Tuesday to make them available for the Senate and Assembly.

One bill Walker wants is part of a package he put forward designed to stabilize the state’s private health insurance market. Walker argues his proposals, including a state protection for people with pre-existing conditions, are needed before Washington has failed to act on passing a replacement for the Affordable Care Act, also known as “Obamacare.”

The bill up Monday would authorize the state to seek a federal waiver to offer a reinsurance program designed to reduce claims costs for insurers selling plans on the private marketplace. About 200,000 people in Wisconsin buy insurance through the private marketplace created under the federal law. If reinsurance were in place, it’s estimated that about 9,600 more people would buy insurance the first year and more than 22,000 the second.

Basically, reinsurance sets up a pool of money for the government to cover the cost of insurers’ most expensive cases, paying a portion of the costliest claims. The idea has had bipartisan support. If the federal waiver is granted, Wisconsin would join Minnesota, Oregon, Hawaii and Alaska in being authorized to offer reinsurance.

Walker estimated his plan would cost $200 million, with the state picking up $50 million and the federal government paying the rest. The state’s share would come from savings from the Medicaid program.

Walker said he expected the program to result in lower rate increases in 2019 and stabilize a market that recently lost several larger insurers including UnitedHealth and Anthem Blue Cross Blue Shield. The state insurance office estimated that premium rates will increase an average of 36 percent this year.

Because of the loss of insurers, this year more than 75,000 people in Wisconsin had to change insurance companies and many of them were limited to one or two choices.

Another measure before the committee Monday that Walker is pushing would spend $50 million a year on rural economic development projects designed to stimulate private investment, improve productivity and fill open jobs in rural parts of the state.

Eligible projects would have to be in counties with a population density of less than 155 people per square mile. Fifty-six of the state’s 72 counties would meet that criteria.