By Jason Stein, Milwaukee Journal Sentinel
MADISON - Wisconsin Gov. Scott Walker's $200 million plan to hold down Obamacare premiums for consumers won praise Monday from groups representing state insurers, hospitals and doctors.
The Joint Finance Committee took testimony on Senate Bill 770 as GOP lawmakers consider approving Walker's plan with a sunset provision.
Senate Majority Leader Scott Fitzgerald (R-Juneau) acknowledged last week that Republican senators are considering putting a time limit on the program. That might help mollify conservative senators who are still hoping that Congress will take greater action to repeal or rewrite the Affordable Care Act.
"That is part of the discussion," Fitzgerald said of time limits.
Walker, a long-standing opponent of the Affordable Care Act, has proposed using a mix of federal and state dollars to hold down premium increases for ACA insurance sold directly to individuals and families. The past year has seen the loss of insurers within the ACA marketplace and premium increases of 38% not counting federal subsidies.
Also Monday, the budget committee took testimony on another Walker proposal, this one on jobs.
Assembly Bill 912 would commit $50 million a year to expand existing state jobs programs in rural areas under a definition that would include 56 of the state's 72 counties. Under the bill, Outagamie and Sheboygan counties would not receive any of the money but Fond du Lac and Manitowoc counties would, at least for now.
Walker's proposed Obamacare fix would pay as much as 80% of the insurance claims of people with high medical bills, decreasing insurers’ costs and enabling them to set lower rates. Rep. Kevin Petersen (R-Waupaca), a sponsor of the bill, said it is "not for the far left and not for the far right."
"If you want more people to be covered by health care, the best way is to keep rates low," he said.
Rep. Katrina Shankland (D-Stevens Point) said Republicans should take federal money available to expand the Medicaid program and use part of that money to provide stable funding for the program. She said the proposal wouldn't be as effective as it should be unless insurers know it's here to stay.
"Insurance companies need to know this will be here for more than a year or two and that this isn't an election-year thing," Shankland said.
This so-called reinsurance program is similar to one in Minnesota that is estimated to have lowered premiums by 20% this year compared with what they would have been otherwise. Oregon and Alaska also have established reinsurance funds, and federal reinsurance also was present in the ACA for its first three years.
It isn't cheap. Minnesota’s reinsurance fund of $270 million costs almost $1,700 for each of the roughly 160,000 people in its individual market.
An array of stakeholders, including the Wisconsin Association of Health Plans, Wisconsin Hospital Association and Wisconsin Medical Society, support the governor’s proposal.
The bill would primarily benefit people with middle-class incomes who don’t qualify for federal subsidies to help offset the costs of health insurance. Health insurance for those consumers now can cost more than $20,000 a year with deductibles totaling more than $10,000 for a family of four.
The Walker administration's plan is for the reinsurance fund to pay between 50% to 80% of the cost of medical claims from $50,000 to $250,000. An analysis by the firm Horizon Government Affairs estimated the plan would hold down premium increases by 13% in 2019 compared with current law and 12% in 2020.
The liberal group Citizen Action of Wisconsin argued Monday that Horizon lobbies for health care clients in Washington, D.C., and that this estimate could be inflated.
The proposal — which would also require federal approval — would be funded by an estimated $150 million from the federal government and $50 million from the state. The actual cost for the state could be up to $80 million, according to an analysis by the nonpartisan Legislative Fiscal Bureau.
The state money would come from expected savings in the Medicaid program. But the fiscal bureau analysis found that some of that $50 million would be one-time moves such as delaying a payment rather than ongoing saving.
Sen. Luther Olsen (R-Ripon) said he was concerned about that.
"Where do we go in the second year?" Olsen asked.