The report analyzed data from the Department of Health and
Human Services (DHHS) showing Minnesota residents consistently pay less
than Wisconsin residents. I read the DHHS report and found the average
lowest monthly premiums in the 36 states reporting numbers was $249 for a
Bronze Plan. The average cost for this plan in Wisconsin was $38 more
than the national average. The study used a weighted average to adjust
for population differences within the states.
In Minnesota, a similar plan was $144 a month, half the cost of Wisconsin’s plan!
The
gap grew for older people and, especially, for people in western
Wisconsin. Particularly striking is the difference in two western
Wisconsin cities. On average, premiums in Eau Claire were 116% higher
than Minnesota and premiums in La Crosse were 136% higher than the
weighted average in Minnesota.
Citizen Action estimated premiums in Wisconsin will be $1,824 more a year for the lower cost Silver (middle) Plan than in Minnesota.
Many
people asked how this could happen. What does Minnesota know that
Wisconsin does not? What decisions could Wisconsin lawmakers make to
turn these differences around?
First, it is important to
note that Wisconsin does not significantly differ from Minnesota in per
person health costs. Wisconsin is slightly more expensive but per
person costs in both states are a little under $6,000 a year.
Second,
Minnesota made very different decisions than Wisconsin last year.
Minnesota chose a state-based Marketplace, chose to keep parents up to
200% of the federal poverty level (FPL) on Medicaid, and chose to expand
coverage of Medicaid for all people up to 133% of FPL. This means a
single person who makes up to about $15,000 a year can get on the Gopher
State’s version of BadgerCare. The state also chose to vigorously use
rate review authorities.
Wisconsin, on the other hand,
decided to let folks buy insurance through the federal Marketplace. The
Governor and lawmakers who voted for the state budget dropped BadgerCare
coverage for any adult who made a little more than $11,000 a year. The
state decided to not use its rate review authorities.
All
these choices made a difference in the Marketplace rates people will
pay in the next year. For example, the choice to not expand Medicaid
cost those buying insurance in the Marketplace an estimated 8 – 10% more
according to a recent study by the Rand Corporation. This is because
people who lose Medicaid are poorer and likely in poorer health. When
added to the state’s Marketplace pool, costs increase.
Sicker
people are likely to seek out the Marketplace. Those who are healthy
may sit out this period of enrollment. This creates much higher
premiums. It is also why Minnesota conducted extensive advertising to
encourage sign-up; something Wisconsin chose not to do.
Years
ago when I wrote the legislation to create a state-based Marketplace, I
learned from the experience of other states that marketing, especially
to young people, was the single most important factor in getting a
well-balanced pool of enrollees and keeping costs down.
It is no accident that those who oppose the Marketplace are running ads to discourage young people from signing up.
All
the premium numbers I’ve mentioned are before federal credits. These
subsidies go to lower income folks which will offset premiums. So those
hit the hardest by higher Wisconsin costs will be middle income
insurance buyers.
It’s time to put politics aside and
create a Badger state-based exchange. The work is done in Senate Bill
12. I call on my colleagues to hold a public hearing on the bill. If we
can’t outshine the Gophers, lets at least keep up with them.
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