Walker moves to stabilize market amid new lawsuit

February 27, 2018 GMT

MADISON, Wis. (AP) — Gov. Scott Walker on Tuesday signed into law a $200 million measure designed to stabilize the health insurance market under the Affordable Care Act in Wisconsin, after authorizing fellow Republican Attorney General Brad Schimel to take lead on a new multi-state lawsuit to block the federal law.

Walker signed the reinsurance bill less than 24 hours after Schimel joined with 19 other states in filing a federal lawsuit in Texas. The lawsuit, which Schimel led along with Texas Attorney General Ken Paxton, argues that the individual mandate is unconstitutional and that the entire law should be blocked.


Walker, a longtime critic of the law known as “Obamacare,” signed off on Schimel pursuing the lawsuit because it questions the constitutionality of the law, said his spokeswoman Amy Hasenberg. Passage of the reinsurance bill will help put protections in place to ensure coverage for people even if the law is eliminated, she said.

Walker has argued for years that “Obamacare” should be repealed and replaced. But this year, as he faces re-election in November, Walker has pushed the reinsurance proposal as a way to stabilize the market and lower premium costs for the state’s roughly 200,000 people who purchase insurance under the law.

Wisconsin Democratic Party chairwoman Martha Laning called the bill an election-year attempt to disguise how damaging years of fighting the Affordable Care Act have been.

Walker signed the bill before touring hospitals in Tomah and Green Bay. He called the proposal a “solution to Washington’s failures” that will provide both stability to the health care market and lower premiums.

The bill passed with bipartisan support in the Legislature. It would authorize the state to seek a federal waiver to offer a reinsurance program where the government would provide money to health insurance providers to pay for between 50 percent and 80 percent of medical claims costing between $50,000 and $200,000.

If approved by President Donald Trump’s administration, Wisconsin would join Minnesota, Oregon and Alaska with a reinsurance program. There was also a reinsurance program under the federal law for its first three years.

Rates are at least 20 percent lower this year in Alaska and Minnesota, and about 7 percent less in Oregon, insurance executives told Wisconsin lawmakers during consideration of the bill.


Horizon Government Affairs estimated that rates in Wisconsin would drop 13 percent in 2019 and 12 percent in 2020 if the program were put in place.

Walker estimated his plan would cost $200 million, with the state picking up between $50 million and $80 million and the federal government paying the rest. The bill Walker was to sign does not specify where the state’s share would come from.

Democrats have repeatedly called on Walker to accept federal money to expand Medicaid coverage offered under the law, but Walker has refused.

In the new lawsuit, Schimel and the other states argue that changes made to the federal health care law by Congress have made it unconstitutional.

“Obamacare’s irrational design wreaks havoc on health insurance markets,” Schimel said in a statement. “Obamacare causes premiums to rise and coverage to fall, forcing Wisconsin and other states to take extreme, costly measures to protect their citizens’ health and pocketbooks.”

The lawsuit argues that because the tax on those who don’t purchase health insurance was removed from the law last year by the Republican-controlled Congress and President Donald Trump, the remaining individual mandate requirement, and therefore the entire law, is unconstitutional.


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