By Senator Howard Marklein
February 23, 2018
Wisconsin Steps Up to Stabilize the Affordable Care Act
Wisconsin Healthcare Stability Plan (WIHSP) passed by legislature.
Whether we like it or not, many Wisconsinites are forced to purchase health insurance through the Health Insurance Marketplace because of the mandates in the Affordable Care Act (ACA), also known as Obamacare. Unfortunately, the structure and assumptions of the ACA are flawed, forcing insurers out of the Marketplace and leaving consumers without choices. The few choices that are left have virtually no competition and the prices have skyrocketed.
Insurers are leaving the Marketplace in droves because they have lost approximately $400 million in the past three years due to the flawed structure of the ACA that was built on incorrect risk assumptions and a wildly optimistic projection of the risk pool. In 2011, 28 health insurers were actively selling plans in Wisconsin in the individual health insurance market. This year (2018), there are only 16 insurers, 11 of which are in the exchange and five that are only selling off of the exchange. For 2018, 75,000 enrollees were forced to choose a new insurer because their previous insurer was no longer available.
In 2017 Humana, Managed Health Services and United Healthcare left the individual market entirely. WPS Health Plan and Physicians Plus left the Exchange. In 2018, Health Tradition left the market entirely and Anthem and Molina left the Exchange except for in one county.
Eleven counties in Wisconsin only have one insurer for marketplace insurance. The counties of the 17th District have seen a major decline since 2016. In fact, Grant County has gone from five insurers in 2016 to two in 2018. The trend continues to decline.
As the availability of insurers has rapidly declined, the average premium increases has skyrocketed. In 2018, the average premium increased by 50% for the second lowest cost silver plan. In northeastern Wisconsin, where there is only one or two plans per county, rates increased by 100%. This is completely unacceptable.
The Wisconsin legislature recently passed a bill to stabilize the health insurance market in our state for the 200,000+ people who are forced, by the ACA, to seek health insurance from the Health Insurance Marketplace. According to the Wisconsin Office of the Insurance Commissioner (OCI), “consumers are faced with fewer coverage options and double digit premium increases.”
Senate Bill (SB) 770 / Assembly Bill (AB) 885, also known as the Wisconsin Healthcare Stability Plan (WIHSP), permits OCI to seek a federal waiver to allow operation of a state-based reinsurance plan to stabilize the marketplace. If approved, the state will cover a portion of health insurance claims between $50,000 and $250,000 for those who are insured through the marketplace. Wisconsin will be subsidizing marketplace insurance for high-risk consumers.
The goal of the reinsurance plan is to stabilize the healthcare marketplace in Wisconsin by relieving some of the burden on insurers by managing high risk enrollees and creating a broader pool of people to absorb all other risk. It is our hope that this relief and stabilization will bring insurers back into the state, increase the number of plans available to consumers and lower the costs.
The plan, as passed, is funded at $200 million - $50 million in state funds and $150 million in federal pass through funds. Wisconsin may also apply for federal funds that may become available through future Congressional action.
Alaska, Minnesota and Oregon have already received similar waivers for reinsurance. Based on their successes and Wisconsin’s estimates, OCI predicts that if Wisconsin receives the waiver and institutes WIHSP, rates for 2019 will be 13% lower than they would have been without WIHSP. The rates will still increase by 2%, but this is more manageable than a 15% predicted increase.
The WIHSP passed the Senate and the Assembly on February 20, 2018. It is before Governor Scott Walker who is expected to sign the bill. OCI plans to hold public hearings and a public comment period in March with the Waiver Application submitted in early April. It usually takes the Federal government several months to respond. We are hoping for Approval in September so that the Reinsurance program will be operational by January 2019.
For more information and to connect with me, visit my website http://legis.wisconsin.gov/senate/17/marklein and subscribe to my weekly E-Update by sending an email to Sen.Marklein@legis.wisconsin.gov. Do not hesitate to call 800-978-8008 if you have input, ideas or need assistance with any state-related matters.