Legislature sends reinsurance program to Scott Walker’s desk

February 22, 2018 GMT

With bipartisan support the Legislature passed a bill Tuesday championed by Gov. Scott Walker that seeks to stabilize the Obamacare marketplace through a reinsurance program.

The program, which has been adopted in a few other states including Minnesota, would pay 80 percent of claims between $50,000 and $250,000 starting in 2019 with the goal of significantly reducing premium increases. Some 216,000 state residents enroll in the federal marketplace created under the Affordable Care Act, also known as Obamacare.

The premiums went up an average of 36 percent this year, compared with less than 5 percent for people who get insurance through employers. For the vast majority of people on Obamacare, federal subsidies mask the premium increases.

The program is expected to cost $200 million a year, with Republicans banking on Medicaid savings to cover the cost starting in the 2019-21 state budget.

“Everyone in the country knows Obamacare is broken,” said Assembly Speaker Robin Vos, R-Rochester. “This is a real fix for a real problem that should have been bipartisan from the beginning.”

Rep. Peter Barca, D-Kenosha, countered that the bill is addressing problems created by President Donald Trump dismantling the ACA.

“This is the Trump mess that we’re cleaning up,” Barca said. “This isn’t a Wisconsin solution. This is what President Obama put into place.”

The Senate passed the bill 23-9 with two Republicans and seven Democrats voting against it. The Assembly passed the bill 79-16 with all Republicans in support and Democrats split. The bill now goes to Walker for his signature.

Assembly Republicans also have agreed to amend a bill that would allow businesses to self-insure workers so that they would still be subject to Wisconsin health insurance regulations.

The original bill, which was introduced less than two weeks ago, would have exempted associations that self-insure from state insurance regulations, raising concerns that it would draw healthy people into low-cost, low-coverage plans, destabilizing the individual market created under the ACA.

Small businesses are currently allowed to come together to purchase health insurance. Supporters of the bill hope that by allowing small businesses to self-insure through associations they will be able to lower overhead costs.

Vos said the changes were agreed upon after hearing concerns from insurance companies who worried about being put at a competitive disadvantage.

The Assembly passed the bill 59-36, with all Democrats and one Republican voting against. The vote came before the U.S. Department of Labor concludes a hearing process on proposed new federal rules for association health plans. The proposed changes would allow associations to offer health plans that don’t include the 10 essential health benefits required under the ACA, operate across state lines, and to offer stand-alone health plans. The comment period on the rules ends March 6.

Vos said Republicans support an amendment that will ensure the state Office of the Commissioner of Insurance can adapt to any changes put in place by the new federal rules.

“We want to be ready to go as quickly as we can,” Vos said.

Vos tied the urgency in passing the bill to the failure of the federal government to repeal Obamacare.

“Obamacare is not fixed,” Vos said. “It is not getting better in (Washington) D.C. so it’s up to state legislatures to take action.”