Gov. Walker's plan to hold down Obamacare premiums passes without a way to pay for it

By Jason Stein, Milwaukee Journal Sentinel 

MADISON - Lawmakers Tuesday approved Gov. Scott Walker's plan to hold down Obamacare premiums but left for another day how to pay for the $200 million proposal.  

The Joint Finance Committee also ordered the Walker administration to study bringing back Wisconsin's high-risk insurance pool, which was phased out after the passage of the federal Affordable Care Act. 

Conservatives in Congress and the Legislature have sought to bring back programs like Wisconsin's former Health Insurance Risk-Sharing Plan, known as HIRSP, as a way to jettison the current ACA requirement that insurers cover consumers with expensive pre-existing conditions. 

On near party-line votes, Republicans on the budget committee amended and approved Senate Bill 770, which calls for using a mix of federal and state dollars to hold down premium increases for insurance sold directly to individuals and families under the Affordable Care Act. Rep. Katrina Shankland (D-Stevens Point) voted with Democrats against the amendment but then with Republicans in approving the bill. 

The past year has seen the loss of insurers within the ACA marketplace and premium increases of 38% not counting federal subsidies.  

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.

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 was also present in the ACA for its first three years.

Under Walker's plan, the reinsurance program 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 raised questions about whether those savings would be sustainable. 

GOP lawmakers decided Tuesday to wait and see if those savings would materialize before deciding where they would get the money, which would not be needed until 2019 anyway. 

"You've got time," Senate Majority Leader Scott Fitzgerald (R-Juneau) said of deciding on state funding. 

Democrats said the state would be better off funding the reinsurance program by taking additional federal money available under Obamacare for expanding a form of health coverage for the needy known as Medicaid. 

Rep. Chris Taylor (D-Madison) said that the other states that have tried reinsurance programs have also used the federal money to expand Medicaid.

"They’ve all taken the (Medicaid) money," Taylor said. "That has allowed them to make investments in some of these other programs."

Republicans also slipped into the bill a provision that would explicitly prevent Wisconsin's governor from expanding Medicaid without lawmakers' approval. Democrats said that amounted to an admission that Republicans are worried about Walker's re-election, since he firmly opposes that Medicaid expansion.

Also Monday, the budget committee unanimously voted to set aside $50 million a year to boost jobs programs in rural counties, including revolving loan funds to be distributed by counties or groups of counties. 

Assembly Bill 912 could lead to extra economic development money for 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.