On Tuesday August 18th, Scott Walker's Presidential Campaign is going to release his plan to "repeal and replace" the Affordable Care Act. It is not often you get advanced notice of a major gaffe, but this is one of those times.
The reason is that, of all the places the Walker Campaign could choose to release their healthcare plan, they pick the one state that shows how to properly rein in insurance companies - Wisconsin's western neighbor Minnesota.
There has been substantial coverage of how much these two states have diverged politically - from education, to taxes, to minimum wage - but one of the starkest is in healthcare. Minnesota has the most affordable health coverage in the country, while Wisconsin has the most expensive Silver plans in the Midwest. But instead of figuring out a solution for the future on cost and access, Walker wants to keep re-fighting the health debate that is 5 years old.
In fact, the cost disparity is so bad that the small business in the Minneapolis suburb of Brooklyn Center where Walker is announcing his plan would likely be paying from $500 more to over $1,000 more per employee if they were based in Milwaukee County, where Walker used to be County Executive.
We at Citizen Action of Wisconsin been tracking these costs for a long time, both for individuals and small businesses, and it is clear that Minnesota has figured out how to use health reform to make measurable dent on high the cost of healthcare.
Let's look again at the cost to small businesses. According to Minnesota's state marketplace MNSure.org, a small business in Greater Minneapolis offering insurance to employees of various ages is paying on average $3,531 annually per employee for the lowest cost silver plan. That same business, offering the equivalent plan to the same age employees in Milwaukee Wisconsin is paying $4,087 annually per employee according to Healthcare.gov, or 15% more for the exact same plan.*
That means that silver plans in Greater Milwaukee start off $555 more expensive annually per employee when compared to Greater Minneapolis. But the most shocking is not small business plans but individual plans, which start off at $1,440 more annually in Milwaukee than the same plan in Minneapolis.**
In fact, if you control for the fact that Milwaukee County has a Health Insurance Cooperative - one of the insurance cooperatives launched thanks to the Affordable Care Act - while Minnesota doesn't, this disparity is even higher. UnitedHealthcare, the next lowest cost insurer, starts their plans for employers at $1,907 more per employee per year than in Minneapolis.
Why is it so much more? With almost identical demographic trends and similar underlying health costs between these two Midwestern states, there is no question that Wisconsin's direction of health reform contribute to the differences in costs.
While the exact differences are multifaceted (Minnesota announced their own plan for health reform back in 2008), there are 3 policies we've found that play a big role in reducing healthcare costs across the board: rate review, substandard plans, and Medicaid expansion.
In broad strokes, Minnesota uses rate review to police insurance company rate increases to root out excessive costs. They outlaw the sale of shoddy substandard "lemon" insurance products, and they not only accepted the enhanced federal Medicaid funds they went above and beyond with their "MinnesotaCare" program. Meanwhile, Walker allowed these non-ACA compliant "lemon" insurance products that keep healthy people out of the Healthcare.gov insurance market, damaging the wider market, and has refused to do any of the other things Minnesota has.
Whatever plan Walker is going to release on Tuesday, it is clear that the next stage model of healthcare reform isn't coming from him, but is in Minnesota. The Affordable Care Act is here to stay, we must not go back to a world where insurance companies discriminate based on preexisting conditions and consumers faced a wild west marketplace. Any plan he comes up with to repeal the ACA will put insurance companies back in control of our healthcare. The major Walker gaffe is that he's announcing this in the state that has done the best to rein in insurance companies and give control back to consumers.
PS - check out our latest version of the “Tale of Two States: Minnesota vs Wisconsin on Healthcare Costs” to learn more on the shocking variations in health insurance costs between the two states and regions within it, and check out our report "WalkerCare: A Bad Prescription for America" to see everything Scott Walker has done to undermine health reform in Wisconsin.
* - Small Group plans compare ages 20, 30, 35, 40 and 50, averaged per employee, for the lowest cost silver plan in both Milwaukee County WI and Hennepin County MN. Source, MNSure.org and Healthcare.gov