New Report: Wisconsinites Still Pay Far More Than Minnesotans for Health Insurance

(This is the preliminary report comparing 2014 Wisconsin rates with 2015 Minnesota rates. A full report with 2015 Wisconsin rates will be forthcoming. To see previous report on MN vs WI 2014 click here, to see previous report MN vs WI SHOP 2014 click here)

Today Citizen Action released a new preliminary report update to our widely covered comparison of Minnesota and Wisconsin 2014 health rates, “A Tale of Two States.” The new preliminary report which compares 2015 rates in Minnesota to 2014 rates in Wisconsin shows large cost disparities between the two states.

The report is available here.  The authors will hold phone briefings on Thursday Oct 9th at 11am and 3pm to further discuss the new findings. The authors are available for interviews before/after.

Unlike most states, the Walker Administration has refused to release Wisconsin’s 2015 rates.  Citizen Action of Wisconsin has filed an open records request to obtain the rates. As an interim step, we are releasing this preliminary report which compares Minnesota’s 2015 rates to the 2014 rates in Wisconsin. The results show that no matter how the 2015 rates come in, Wisconsin consumers will pay substantially more for health insurance than their counterparts in Minnesota (Data points below and in full report).

Key Preliminary Report Findings:

  • Statewide (Wisconsin 2014 rates vs. Minnesota 2015 rates) comparisons show large disparities. Controlling for population densities...

    • Bronze plans start 45.7% more expensive, averaging $1,137.48 more a year

    • Silver plans 40.3% more, averaging $1,247.40 more a year, and 

    • Gold plans 46.5% more, +$1,700.43 a year.

  • This disparity is even higher between Wisconsin Metros with Greater Twin Cities area.

    • While Dane County, Rock County and Fox Valley are tied for lowest Silver cost plans, they are still 32.6% more expensive than Twin Cities Metro.

    • Western Wisconsin border counties are up to 174% higher than their Minnesota neighbors.

    • Health insurance premiums in Milwaukee are 66% to 73% higher than in the Twin Cities.

  • The report shows that this giant disparity is not because of underlying health costs and demographic differences, but policy. We conclude that the public policies Minnesota has employed could also lead to substantially lower costs in Wisconsin.

    • Wisconsin individual policy consumers could see between $747-$852 in yearly cost reductions with stronger rate review policies.

    • Wisconsin individual policy consumers could see between $207-$251 in yearly cost reductions by accepting federal Medicaid funds.

Wisconsin rates will likely remain substantially more than Minnesota in 2015, but until the Walker Administration releases the 2015 rates, a complete comparison will not be possible.

 

Fig 1: Weighted Average of lowest cost plan in all state rating areas, averaging ages 25, 40 & 60

 

WI 2014

MN 2015

Percent Higher

Annual Difference*

Bronze

$302.23

$207.44

45.7%

+$1,137.48

Silver

$361.68

$257.73

40.3%

+$1,247.40

Gold

$446.04

304.3399

46.6%

+$1,700.43

* - amount average Wisconsinite will pay extra per year in health insurance

 

Fig 2: Wisconsin Metro lowest cost comparison with Twin Cities, ages 25, 40 & 60

 

Bronze

 - Percent

Silver

 - Percent

Gold

 - Percent

Milwaukee

$317.60

+74.14%

$393.22

+66.32%

$476.27

+69.79%

Dane

$233.00

+27.76%

$313.58

+32.63%

$402.71

+43.57%

Hudson

$501.12

+174.77%

$532.97

+125.43%

$600.57

+114.10%

Eau Claire

$320.39

+75.68%

$404.78

+71.20%

$474.55

+69.18%

Superior

$314.12

+72.23%

$396.83

+67.84%

$465.24

+65.86%

La Crosse

$349.02

+91.37%

$440.81

+86.45%

$516.90

+84.28%

Racine/ Kenosha

$310.58

+70.30%

$388.74

+64.42%

$449.37

+60.20%

Wausau1

$310.98

+70.52%

$373.50

+57.98%

$460.60

+64.20%

Fox Valley2

$268.29

+47.11%

$313.58

+32.63%

$388.17

+38.38%

Waukesha

$313.75

+72.03%

$347.32

+46.90%

$465.56

+65.97%

Rhinelander

$313.15

+71.70%

$364.87

+54.33%

$478.17

+70.47%

Janesville

$283.27

+55.32%

$313.58

+32.63%

$410.44

+46.32%

Brown/ Manitowoc

$264.32

+44.93%

$327.22

+38.40%

$382.43

+36.34%

1 – Includes Portage & Wood counties in addition to Marathon County.

2 – Includes Outagamie, Winnebago, Calumet, Fond du Lac, Sheboygan and Dodge Counties  

 

This preliminary 2015 report, like the 2014 report, lends credence to the idea that state policy has a significant impact. Two earlier reports from Citizen Action of Wisconsin establish that private insurance rates were significantly impacted when states fully implemented two key features of the Affordable Care Act: accepting enhanced Medicaid dollars and implementing robust rate review. Minnesota is taking a dramatically different course than Wisconsin, vigorously implementing both of these provisions beyond the minimum requirements of the law.

Fig 3: Policy Findings from Previous Research

From October 2013 “A Tale of Two States: Why Wisconsin’s Health Insurance Individual Marketplace Premiums are Dramatically Higher than Minnesota

1. Had Wisconsin mirrored Minnesota’s Rate Review Policy

up to $852 less on lowest cost Silver plan, annual

up to $71 less on lowest cost Silver plan, monthly

2. Had Wisconsin accepted Medicaid funds

$207 less on lowest cost Silver plan, annual

$17.25 less on lowest cost Silver, monthly

From July 2014 “Taking the Next Steps: Role of State in Restraining Health Insurance Costs

1. States that have “prior authorization” rate review

$747.12 less on average individual plan, annual

$62.26 less on average individual plan, monthly

2. Had Wisconsin accepted federal Medicaid funds

$251.29 less  on average individual plan, annual

$20.94 less on average individual plan, monthl

The preliminary report adds to the growing body of evidence that states which take advantage of federal health care reform are lowering premiums for their residents. States are now the laboratories of health reform, and states that employ all tools in the Affordable Care Act to control cost like Minnesota will see both a competitive advantage and a more efficient health sector.

Discussion:

Underlying health care costs do not explain these insurance price disparities. In fact, Minnesota health care costs are slightly higher than Wisconsin’s. This leads us to conclude that public policy differences between the two states are making a difference, including Wisconsin’s rejection of key Affordable Care Act features such as rate review and accepting enhanced dollars for BadgerCare.

The following charts show that other variables such as underlying medical costs, age, population health, cannot account for the dramatic the insurance premium variations.

For one key indicator, per capita Medicare costs, which are based on regional variations in underlying costs, Minnesota is actually more costly than Wisconsin.

Fig 4: Medicare Inpatient Per Capita Cost, 2012. MN vs WI

Minnesota

$2,412 (+1.4%)

Wisconsin

$2,378

The Institute of Medicine lists as “acceptable” causes of geographic variations: health status and population demographics. Yet these factors are only slightly higher in Wisconsin.

Fig 5: Sample of Acceptable Causes of Geographic Variations by State

 

Total Population

Number of Residents with  Pre-existing condition

Percent Female

Average Age

Percent Overweight

Diagnosed with Diabetes

MN

5,420,380

1,213,300

50.3%

37.4

63.0%

7.3%

WI

5,742,713

1,337,700

50.3%

38.5

63.3%

8.3%

This continues to hold true for Major Metropolitan Areas. But one key indicator, inpatient per capita Medicare costs, are substantially lower for most Wisconsin cities, compared to the Twin Cities, but Wisconsin metro insurance premiums are always higher.

Fig 6: Medicare Inpatient Per Capita Cost, 2012. Wisconsin Metros compared to Minneapolis/St Paul Average

METRO

Per Capita Inpatient Cost

Compared to Twin Cities

Madison

$2,062

-20.0%

Eau Claire

$2,461

-4.0%

La Crosse

$2,143

-16.0%

Wausau

$2,410

-6.0%

Milwaukee

$3,093

21.0%

Green Bay

$2,276

-11.0%

Appleton

$1,980

-23.0%

Racine

$2,834

11.0%

Superior

$2,578

1.0%

Janesville

$2,348

-8.0%

Oshkosh

$2,210

-14.0%

Kenosha

$2,704

5.0%

Waukesha

$2,496

-3.0%

Hudson

$2,396

-7.0%

The preliminary report adds to the growing body of evidence that states which take advantage of federal health care reform are lowering premiums for their residents. States are now the laboratories of health reform, and states that employ all tools in the Affordable Care Act to control cost like Minnesota will see both a competitive advantage and a more efficient health sector.

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