Gov. Walker Proposes Health Care Initiatives; Calls on Legislature to Act


Gov. Walker is proposing a “health care stability plan” to help address rising costs of health care insurance in Wisconsin, and provide assurances to Wisconsin citizens regarding their current health insurance. In an interview with The Wheeler Report, Walker said his plan consists of three parts:

  1. Pre-Existing Conditions: Walker is calling on the Senate to take action on AB-365, Rep. Daniel Riemer’s bill prohibiting lifetime and annual limits under health insurance policies and plans. The Assembly took up the bill on a pulling motion in June and added a substitute amendment which prohibits group health benefit plans, including a self-insured governmental health plan, from imposing a preexisting condition exclusion.
  2. SeniorCare Permanent Waiver: Walker is applying for a permanent waiver for SeniorCare. Walker said the program is affordable and well liked in Wisconsin, and instead of continually applying for waivers for the program he will have his administration apply for a permanent waiver for the program.
  3. State Innovation Waiver for Resinsurance: Walker is proposing to utilize the State Innovation Wavier (Section 1332 Waiver) to create a state-based reinsurance program. Walker said this waiver will impact the affordability and stabilize the private health insurance marketplace for approximately 200,000 Wisconsinites who purchase their health insurance on the individual market.

The Section 1332 Waiver, a State Innovation Waiver, was included in the Affordable Care Act and became available for states to begin using on January 1, 2017. Currently three states, Minnesota, Oregon and Alaska, have implemented the waiver. As of December 2017, 24 states were considering legislation to authorize a 1332 waiver. According to Walker, as more insurance companies leave the individual marketplace the cost of premiums for those companies that stay in the individual marketplace rise. Walker said on average Wisconsin has seen a 36% increase statewide, while some areas in northern Wisconsin have seen increases as much as 105%. Documentation provided by the Governor says once the reinsurance programs were instituted, Minnesota saw a 20% drop in premiums and Oregon saw a 7.1% drop. (The Alaska program is somewhere between 42% and 7.3%.)

Walker is proposing a bifurcated process. Walker said the proposal would be in place in time to impact any proposed rate increases for 2019.  A second waiver would be proposed in early 2019, potentially impacting the 2020 plan year. Walker’s proposal is a corridor based reinsurance program. The anticipated program would provide coverage up to 80% for claims above $50,000 and below $250,000, similar to Minnesota’s program. Anything above $250,000 would be covered 100% by the insurer, giving them incentive to control costs. Walker said this type of program is the most predictable for state budgeting and for insurance providers. Walker said the proposal is estimated to cost $200 million, the state would be required to pay 25% of the program and the federal pass through dollars would pay for the remaining 75%. Walker’s administration anticipates paying for the state’s portion through savings in the Medical Assistance program. Walker said this means initially there would be no general fund impact.

In order for the proposal to move forward, Walker must present a plan to the legislature and the Senate and Assembly must pass legislation authorizing the waiver. Once signed by the Governor, the state would begin applying for the Section 1332 Waiver with the Center for Medicare and Medicaid Services. Once approved, the program would be operational throughout 2019 and into the future, and it is expected the program will be run by the Office of Commissioner of Insurance.