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Walker Administration Thwarts Federal Health Care Reform

Democrats counter with insurance consumers' bill of rights

Sep. 28, 2011
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If you are hoping that Gov. Scott Walker's implementation of health care reform will put consumer concerns before the profits of insurance companies, you're going to be disappointed.

Well, you would be disappointed, if you could find information about health care reform on state websites, meeting announcements or public outreach tours.

The Walker administration's secrecy and control over the implementation of the federal Affordable Care Act (ACA) is wildly different than the approach taken by the Doyle administration.

Gone is the focus on implementing the ACA to protect consumers, rein in the escalating cost of private insurance and bring in federal dollars to relieve the burden on Wisconsin taxpayers and expand insurance coverage.

Gone, too, are public meetings and policy discussions.

Instead, Walker's Office of Free Market Health Care is little more than a website, with no mention of meeting schedules, members or staffers, or information that could help consumers understand how Wisconsin will turn the ACA into reality.

The bulk of the website is devoted to a report commissioned by the Doyle administration that the Walker administration has misrepresented to make it seem as if federal health care reform would be terrible for Wisconsin. In a further act of brazenness, the Walker team had only invited a handful of reporters to a press conference announcing the release of the study, and then barred the reporters from quoting administration officials or recording the event.

"There is quite a bit of misinformation about health care reform because they are openly hostile to it," said state Rep. Jon Richards (D-Milwaukee). "If they had their way, federal health care reform would be repealed and they'd go back to the day where you could be denied insurance when you need it the most."

Richards had been co-chair of a Doyle-era bipartisan legislative committee tasked with implementing health care reform, called the Special Committee on Health Care Reform Implementation. All of its materials are posted on the state website and its meetings were recorded by WisconsinEye and available for viewing.

That committee—now chaired by state Sen. Alberta Darling (R-River Hills) and state Rep. Pat Strachota (R-West Bend)—hasn't met since shortly after Walker won the November 2010 gubernatorial election. Richards said he expects it to be formally disbanded soon.

"The Doyle administration had a much more inclusive process, while the Walker administration is holding all of its discussions behind closed doors," Richards said.

Making Health Care Reform Benefit Insurance Companies

Jim Guidry, spokesman for the Office of the Commissioner of Insurance, told the Shepherd that he would not make anyone available to respond to the paper's detailed questions.

Walker spokesman Cullen Werwie didn't respond to the Shepherd's request for comment. Nor did Department of Health Services spokeswoman Beth Kaplan.

But based on public comments, proposed legislation and leaked documents, it's easy to see how the Walker administration is attempting to thwart the consumer benefits of health care reform in the state so that insurance companies can continue to generate huge profits.

The Walker administration is doing so through unchallenged rule-making authority for its politically appointed agency heads, weak regulation of insurance companies and the planning of a pro-profit, anti-consumer health insurance exchange.

"The Walker administration is not interested in involving the public," said Robert Kraig, executive director of Citizen Action of Wisconsin. "They have decided that the insurance industry are the stakeholders. They are their clients."

Weak Reform

If the Walker administration doesn't implement health care reform in the state by 2014, then the federal Department of Health and Human Services will step in and do it for them—a prospect that Walker's administration is trying to avoid.

So, Walker, along with his appointees Insurance Commissioner Ted Nickel and Health Secretary Dennis Smith, are implementing weak reforms that will benefit the insurance industry, not policyholders. They're doing the bare minimum to avoid a federal takeover at the same time that Republican Attorney General J.B. Van Hollen is working to challenge ACA in the courts.

A few examples of the Walker administration's plans to boost the insurance industry under the guise of reform:

  • Earlier this year, Commissioner Nickel terminated a contract awarded to the public interest law firm ABC for Health to help consumers access affordable health care. Bobby Peterson, ABC for Health's executive director, told the Shepherd the Walker administration pulled the contract because it is "hostile to consumers" and that "the insurance industry is used to getting its way." ABC for Health is attempting to have its contract reinstated.

  • Pending legislation introduced by the chair of the Assembly Insurance Committee, state Rep. Kevin Petersen (R-Waupaca), would insert some ACA provisions into Wisconsin statutes. But the bill would go beyond that mission to grant broad rule-making powers to Nickel, a former insurance industry insider. (Petersen did not respond to the Shepherd's request to comment on his bill.)
  • If Assembly Bill 210 is passed as is, Nickel could change state health care law by writing emergency rules that would be in effect for one year and then could be extended. Those emergency rules would not need to be vetted by legislators. Secretary Smith has been granted similar rule-making powers to make sweeping changes to the Medicaid program.
  • Although the intent of federal health care reform is to make insurance policies more transparent by requiring that companies disclose their rates, AB 210 would allow Nickel to withhold that information from the public if he deems it "proprietary."
  • AB 210 would also allow insurance companies to skirt ACA provisions limiting the amount of profit they can earn, although that fact went unmentioned in the Sept. 15 Assembly insurance committee hearing on the bill.
  • The bill would also allow ACA regulations to be rolled back if the federal health care reform package is found to be unconstitutional. In this way, some consumer protections—including lifetime or annual limits on insurance benefits—could be repealed, penalizing Wisconsin consumers precisely when they need insurance coverage the most.
  • Nickel set up "stakeholder exchange working groups" to help develop the state's new health insurance exchange, which the ACA requires states to have planned by 2013 and up and running by 2014. But that information isn't found on any state website. Nor is a schedule of meetings publicly available, either.

Kraig and Peterson blasted the group's membership, which is dominated by insurance industry insiders. Only two members represent consumers—David Riemer and Debra Kraft of Community Advocates—while a whopping 19 members represent insurers and another 24 represent businesses. Madison attorney Barbara Zabawa is supposed to represent consumers on three working groups.

  • Health Secretary Dennis Smith's PowerPoint outline for building the insurance exchange can't be found on the website of the Office of Free Market Health Care. But according to a copy obtained by the Shepherd, the proposed exchange would be run by a governor-appointed, state Senate-confirmed executive director with an advisory council consisting of two insurers, two business representatives, one broker/agent representative and only one consumer advocate. Non-voting members include an actuary, three providers, the health secretary and the commissioner of insurance.

Smith's outline indicates that the state has been meeting with "stakeholders on portal and interchange functionality" in July, August and September of this year, but none of those meetings appear on any state website. Smith wants to "draft and pass enacting legislation" in October, November or December, but an exchange-related bill hasn't been introduced in the state Legislature as of yet.

Insurance Consumers' Bill of Rights

Although Walker, his appointed agency heads and Republican legislators are attempting to implement weak health care reforms and then allow them to be repealed if the federal law is struck down, Democrats are drafting a bill that would permanently outlaw some of the most discriminatory insurance industry practices.

The bill, sponsored by Richards and state Sen. Jon Erpenbach (D-Middleton), would prohibit discrimination against children and adults with pre-existing medical conditions, ban the cancellation of coverage after a policyholder gets sick, abolish lifetime and annual limits on coverage, and outlaw health insurance rates that discriminate based on health status or gender.

"All of those protections are included in the federal law and they should be written into Wisconsin law," Richards said. "No matter what happens in Washington, people in Wisconsin should have that."

More than 30 consumer advocacy organizations support the bill, including Citizen Action of Wisconsin, Disability Rights Wisconsin, AARP, ABC for Health and the Wisconsin Council on Children and Families.


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