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With his eye on the White House, Gov. Scott Walker has been fighting the Affordable Care Act at every turn. Walker decided not to implement a state-based insurance exchange under the law, opted out of expanding BadgerCare even though it was 100% federally funded and hasn’t gotten tough with private insurance companies’ requests to raise their rates, as he’s allowed to do.
Instead of implementing Obamacare to its full extent in Wisconsin, Walker developed his own version of health care reform, which pushed 63,000 low-income Wisconsinites off of BadgerCare and onto the health insurance marketplace that the federal government, not the state of Wisconsin, set up and operates. In doing so, Walker drove people earning just a little more than the federal poverty level into the arms of private insurance companies instead of keeping them on BadgerCare, where coverage is more affordable. As a result many of these individuals forced off of BadgerCare can’t afford to purchase health insurance in the private market even with the federal subsidies so they have no health insurance at all. This leaves Wisconsin with many more uninsured than it would have if Obamacare had been properly implemented.
Although Walker’s tough stance on health care reform may boost his popularity among right-wing Republicans, evidence is mounting that Walker’s refusal to adopt all provisions of Obamacare is expensive for Wisconsin taxpayers and insurance ratepayers. In the previous budget cycle, Wisconsin taxpayers spent an extra $200 million on Walker’s health care reforms. In the next budget, the extra cost for state taxpayers is estimated to be $345 million—more than the drastic cut he wants to make to the UW System. Also every employer and every individual who purchases health insurance in Wisconsin is paying more to cover the care of our uninsured who end up in hospital emergency rooms.
In addition to those extra expenses picked up by state taxpayers, Wisconsinites purchasing insurance in the federally run health insurance marketplace are also paying more thanks to Walker’s reforms.
Last week, Citizen Action of Wisconsin released a new report, A Tale of Two States 2015, showing that plans on Wisconsin’s federally operated insurance marketplace are about 60% higher than similar plans on Minnesota’s marketplace. That means the average Wisconsinite purchasing a silver plan will pay about $1,692 more per year than a Minnesotan with a similar insurance policy.
Closer to home, Milwaukeeans on the insurance exchange pay 52% more than the Minnesota average—or $1,236 annually—and about 66% higher than residents in the Twin Cities, Citizen Action found.
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Citizen Action couldn’t find any evidence that the cost differences could be chalked up to higher medical costs in Wisconsin. Rather, its researchers chalk it up to Walker’s refusal to expand BadgerCare under the Affordable Care Act, his decision not to set up a state-based health insurance marketplace, his administration’s refusal to reject any insurance company’s rate hikes, and other decisions.
Low-Income Wisconsinites Could Be Penalized
Those cost disparities are pretty bad, but they could get worse for 184,000 low-income Wisconsinites.
Low-income Wisconsinites purchasing insurance on the exchange currently receive federal tax credits to help them make their payments. These subsidies help to reduce their out-of-pocket costs for their policies. In fact, Walker’s version of health care reform is designed to incorporate those tax credits for struggling Wisconsinites.
But that arrangement could end if the U.S. Supreme Court decides that those tax credits aren’t legal in states such as Walker’s Wisconsin that didn’t set up their own insurance exchanges under the Affordable Care Act.
However, an adverse decision in King v. Burwell wouldn’t affect states such as Minnesota that constructed and operate their own exchanges. A decision is expected this spring.
If low-income Wisconsinites aren’t allowed to receive those tax credits, their costs will skyrocket—and make Minnesota’s decision to set up its own insurance marketplace seem even more fiscally sound.
Milwaukeeans who earn 133% of the federal poverty level ($15,654 for an individual) will see their premiums spike to $3,432 more than the average Minnesotan at the same income level. Milwaukeeans who earn 200% of the federal poverty level ($23,540 for an individual) will pay $2,160 more for their premiums than their peers in Minnesota.
And that will result in fewer Wisconsinites with affordable health insurance.
“It will force people out of the marketplace,” Citizen Action Executive Director Robert Kraig told the Shepherd.
Of course, Walker could fix the problem by launching a Wisconsin-run health insurance marketplace, as many Republican governors have chosen to do, as well as expanding BadgerCare under the Affordable Care Act. The BadgerCare expansion was supported by 73% of voters when it was on the ballot as an advisory referendum in November 2014.
When asked to respond to Citizen Action’s findings or discuss Walker’s plans if the Supreme Court ends tax credits for Wisconsin’s insurance purchasers, J.P. Wieske, spokesman for the state insurance commissioner, refused.
“We don’t provide comment on press releases from partisan political sources,” Wieske emailed the Shepherd.
