Today Citizen Action released a new report that follows a series of other research showing that private individual insurance rates available on the healthcare marketplace continue to be far higher than seen by consumers in Minnesota.
Contrary to the accusations that Minnesota's far lower rates were a one-year fluke, they once again show that there is a way to reduce the cost of healthcare coverage without sacrificing quality. And that public policy has clear impact on the cost of coverage.
Our report, "Tale of Two States 2015 Report: Why Wisconsin's Health Insurance Costs Are Dramatically Higher Than Minnesota's" shows that the average Silver plan for a 40 year old is 60% more expensive in Wisconsin. This translates to $1,692 more per person per year, and with a $600 higher deductible on average.
This report goes above and beyond previous studies in that we also looked at what would happen to consumers in metropolitan areas around Wisconsin if the Supreme Court case King v. Burwell is ruled in a way that denies tax credits to states that use the federal marketplace. If this were to happen rates in Wisconsin would skyrocket, pricing thousands out of their plans, but would leave Minnesota with its state-based marketplace alone.
This report echoes previous studies, bolstered by additional national research and Medicaid experts, that the state's decision to reject federal funds for BadgerCare as well as not taking full advantage of state tools like rate review contribute to the higher cost of coverage in Wisconsin.
This report also finds additional policy tools that can help both explain current cost disparities and/or help reduce them moving forward. We will do more to promote these policy proposals in the future, but here are a few.
1. MEDICAID: Wisconsin should accept federal enhanced Medicaid funds and look into a “Basic Health Plan” to return BadgerCare to the former income eligibility of 200% of poverty line.
2. RATE REVIEW: Wisconsin should institute a “prior authorization” insurance rate review system to ensure that insurance rates are not excessive and reduce waste before consumers face them.
3. TRANSPARENCY: Wisconsin should use rate review to outlaw nondisclosure of negotiated health rates to providers and bring transparency to medical costs.
4. SUBSTANDARD PLANS: End the practice of allowing new non-Affordable Care Act-complaint health plans to be sold.
5. MERGE POOLS: Consider cost reduction strategy of merging individual and small group markets risk pools. Allow large group employers of over 100 employees to join the marketplace in 2017.
6. MARKETPLACE: Create a Wisconsin-based health insurance marketplace to ensure all Wisconsin consumers continue to have access to quality affordable coverage across the state.
7. ACTIVE PURCHASE: Consider instituting an “active purchasing” marketplace to further reduce future insurance prices for Wisconsin consumers.
8. PUBLIC EMPLOYEE LEVERAGE: Add local county, city and school employees to public employee health plan to bring market leverage to regional health markets beyond Madison. Explore allowing private employers to join.
9. MEDICAID LEVERAGE: Use Medicaid to drive integrated delivery systems and develop medical homes for consumers.
Like the ideas we've proposed? Have better ideas? Let us know what you think by commenting below. We'll go into further detail about these and other ideas in the near future. In the meantime check out the report: Tale of Two States 2015 Report: Why Wisconsin's Health Insurance Costs Are Dramatically Higher Than Minnesota's.