Last week, a group of 11 individuals, all appointed by
Governor Walker to the Group Insurance Board (GIB), almost unanimously voted to
overhaul health care in Wisconsin by adopting a risky self-insurance scheme
that will not only disrupt our entire health insurance market, but may end up
costing taxpayers millions more.
The State of Wisconsin has one of the most competitive
health insurance markets in the country, which is reflected in the Group Health
Insurance Program (GHIP). Currently, the
GHIP is composed of 17 health plans that provide more than 250,000 state and
local government employees, retirees, UW employees and their dependents with
health care. Under GHIP, Wisconsin funds
state employee health insurance through premiums to a third party health
insurer that covers costs and liabilities of all claims.
Insurers work with both local providers and the state to
establish service areas that not only keep health care costs low, but also
ensure high quality, accessible care.
While some states around the country have seen their health care
premiums skyrocket, Wisconsin’s rate increases have remained well below the
national average and our current model has saved Wisconsin taxpayers nearly
$283 million over the last nine years.
Despite the facts and success of GHIP, Governor Walker seems
intent on disrupting this system by adopting a self-insurance model which he
insists will save millions, despite an initial report that such a scheme could
cost taxpayers upwards of $100 million dollars more in costs. In a self-insurance model, the state is on
the hook for the actual costs and liability of the health care covered
employees receive. The risk that costs
could be higher than estimated, due to an unexpected outbreak of a certain
disease or other unanticipated factors, is assumed by the taxpayers.
The uncertainty of self-insurance at a time when the future
of the Affordable Care Act and the Medicaid system hang in the balance make
this a very bad time for Wisconsin to pile on with further disruptions that
could cost millions more, require people to change physicians, and disrupt
localized, accessible health care networks.
But last week, the unelected GIB ignored all of this and
nearly unanimously voted to plow ahead with self-insurance, dividing the state
into four regions which will be served by only six insurers. In some regions, they propose just one
insurer. If there’s one thing that
health actuaries seem to agree on, it is that reducing competition in a health
care market most certainly leads to increased health care costs.
With over 100,000 GHIP participants in Dane County alone,
what does self-insurance mean for our community? Simply put, it means job losses, fewer health
plan choices, fewer health care providers and most likely more money out of
your pocket.
Not only will public employees again be asked to pony-up for
more of their health care costs, but all Wisconsin taxpayers should be worried
about what self-insurance means for the state’s coffers, for their own pocket
books, and for their own health care.
Taking 250,000 individuals out of Wisconsin’s health care market most
definitely will impact the health care premiums, provider choices and health
care access of everyone else who remains.
The state’s cash reserves are not even close to covering the
potential risks of self-insurance, which, at a minimum, would require the state
to triple its reserves. Some states that have moved to a self-insurance model,
including North Carolina, underestimated the amount and costs of claims and
experienced a $250+ million budget deficit due to unexpected claims. Compared to other states, Wisconsin has
larger health insurance costs, partially due to our chronic disease condition
rates being significantly higher. One
bad year will force us to redirect money towards covering health care costs
that could be going towards our k-12 schools, our roads and the UW System.
While the GIB voted to advance this proposal, the Joint
Finance Committee has the ability to stop it.
Whether you’re a public employee or not, this overhaul of Wisconsin’s
health care system will affect us all.
Contact your elected officials and tell them that Wisconsin cannot
afford to roll the dice with our Governor’s political games and to remove his
self-insurance proposal from the 2017-19 state budget.
Office of Representative Chris Taylor
306 West – (608) 266-5342
PO Box 8953
Madison, WI 53708
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