On a media call today that included State Senators Chris Larson and Jon Erpenbach, Citizen Action of Wisconsin released the 8th Annual Wisconsin Health Insurance Cost Rankings 2014 report. The new report sheds light on how health insurance hyperinflation is impacting the major regions of the state
This year’s report finds wide disparities between higher and lower cost regions of Wisconsin, as well as large differences in the rate of health insurance inflation. There is a 23% variation in the large group market between the lowest cost metro area (Madison) and the highest cost areas (Milwaukee and Racine), which amounts to a difference of $1,810 per year for single health coverage. On the small group and individual market, the report finds even higher regional disparities of as much as 55% between the highest cost and lowest cost Wisconsin city. The magnitude of this gap could have significant economic consequences. The report finds that Wisconsin health insurance premiums have increased 201% since 2000 statewide, and as much over 300% in some areas.
This year’s report continues to find a stunning inverse correlation between cost and quality, with the highest cost area of the state also having the lowest quality health insurance and the lowest cost area having the highest quality.
The report concludes that lower health insurance costs on the large group market in the Madison area provide key lessons on how to implement the Affordable Care Act, the national health care reform law, in Wisconsin. It also finds that more robust rate review could reduce distortions in the health insurance market and moderate rates in some regions of Wisconsin.
“The striking numbers in this report bring down to the local level the economic cost we are paying for skyrocketing health insurance costs, and the need to effectively implement the Affordable Care Act,”said Robert Kraig, the report author and the Executive Director of Citizen Action of Wisconsin. “Wisconsin workers and families will not have full control of their own health care decisions until we get health care costs under control.”
"Middle class families, especially in my district, are reeling from high cost yet low quality health plans," said Senator Chris Larson, Senate Democratic Leader. "State policy has an impact on health costs, the Legislature cannot fall asleep at the wheel as our neighbors are bringing down cost. Walker's insurance commissioner should use tools like rate review to level out health insurance costs.”
“We as a state have the opportunity to wrap our hands around health care costs," said State Senator Jon Erpenbach. "The GOP can't use the Affordable Care Act as an excuse for bad state policy. The law gives thousands of Wisconsinites a chance to gain better coverage, we can go further here in Wisconsin to increase quality and lower cost.”
"Health costs have huge impacts on our small and large businesses, not to mention the families trying to get by," said State Representative Melissa Sargent. "More money spent on health care means families and businesses are less able to afford other services. There are long term positive economic impacts when we ensure that health insurance is affordable and high quality."
Key Wisconsin Health Insurance Cost Ranking 2013 Findings
- There is a 23% variation between the highest cost major metro area and the lowest cost metro area, which amounts to a $1,810 difference for a single policy each year
- Wisconsin health insurance rates have increased 201% since since 2000 for a similar benefit package.
- There is a 55% variation on small group market between the highest cost metro area and the lowest, amounting to a difference in $2,724 per year for single coverage.
- There is a 53% variation on the individual market between the highest cost metro area and the lowest, amounting to a difference of $2,508 per year for individual coverage.
- The report finds a stunning inverse correlation between health insurance costs and quality, with the lowest cost area for large group coverage having the highest quality and the highest cost area having the lowest. Quality is negatively correlated to the presence of national for-profit health insurance companies.
- The report finds that increased buying power can moderate rates, lending credence to the proposal that Wisconsin operate its own health insurance exchange and work to build its bargaining leverage with insurers.
- Unevenness and distortions in the health insurance market revealed in this report suggest that more robust rate review could moderate rates.
- The highest cost metro areas for large group coverage are Milwaukee, Racine, Eau Claire, La Crosse and Wausau.
- Madison remains the lowest cost metro area by a substantial margin for large group coverage, but is not the lowest for small group and individual market coverage.
- Green Bay, Appleton Oshkosh, and Milwaukee suffered the highest rates of health insurance inflation over the last decade.
In 2014 the federal government will build health insurance exchanges for the individual and small group markets under the terms of the Affordable Care Act. The report finds that relatively lower health insurance costs and below average inflation in the Madison area lends empirical support to the value of a competitive bidding process that covers a large number of participants and includes both cost and quality as a mechanism to contain health insurance inflation.
Additional data and 8 ranking charts are available in the full report which can be downloaded here.