A new report released this week by Citizen Action of Wisconsin reveals consumers in Wisconsin will pay on average 79 percent to 99 percent more for health insurance than their counterparts in Minnesota on the new marketplaces created by ObamaCare.
The report shows that two decisions made by the Walker administration explain a substantial portion of the disparity.
The fundamental difference between the two states, which are similar geographically, demographically, and have comparable underlying medical costs, is that Minnesota has embraced the national health care reform law and is using the tools it provides to deliver more affordable health insurance, while the Walker administration has tried to undermine the law at every turn.
One bad decision involved BadgerCare. Walker’s decision to reject enhanced federal Medicaid funding to strengthened BadgerCare cost the state budget $119 million more to cover fewer people. Our report shows that forcing more low income Wisconsinites into the new marketplaces (also known as exchanges) also increases the health insurance premiums for everyone else.
A Rand Corporation report estimated that states rejecting enhanced federal Medicaid dollars will increase premiums from 8 percent to 10 percent. The reason is that lower income people are relatively less healthy, and low income people with health conditions are more motivated to enroll and pay higher premiums and cost sharing. This means that insurance premiums on the Wisconsin marketplace on a typical plan will cost an average $207 more per year because the Walker rejected enhanced federal dollars.
Another key difference is the two state’s dramatically different approaches to rate review. An important provision of the Affordable Care Act tasks state regulators with reviewing health insurance premium rate increases and determine if they are excessive.
Minnesota has a robust rate review process, and took the additional step of rejecting health insurance rates that were unjustified, lowering rates on their new marketplace by up to 37 percent. Scott Walker’s insurance agency, in stark contrast, has been so passive in its rate review that it has yet to find a single health insurance rate submission to be excessive.
Overall, the report concludes that Walker’s decision not to use the tools made available by the national health care reform law may cost Wisconsin consumers as much as $1,000 more per year in health insurance premiums. This dwarfs the meager $13 tax reduction Walker and his legislative allies are touting.
These numbers ought to shake up the health care debate. Most Wisconsinites are tired of the conservative obsession with sabotaging health care reform. Few doubt that access to quality affordable health insurance is not a luxury, but is indispensable to the opportunity to thrive and prosper.
Shockingly higher premiums ought to be a clarion call for lawmakers to put aside the ideological divisions, and work cooperatively to secure the full benefits of national health care reform for Wisconsin.
Robert Kraig and Kevin Kane, the co-authors of the report, are executive director and lead organizer for Citizen Action of Wisconsin.