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Wisconsin health insurance exchange

WI rates increasing just 3%; 2 new carriers join exchange

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  • healthinsurance.org contributor
  • September 30, 2014

Average rate increase of just 3 percent

In late September, the Wisconsin Office of the Commissioner of Insurance released rate filings for 2015 health plans.  The average rate increase in Wisconsin’s individual market will be just three percent next year.  And two carriers – Medica Health Plans of Wisconsin and Molina Healthcare of Wisconsin – will have significant rate decreases: 17 and 11 percent, respectively.

New carriers joining the exchange

Open enrollment for 2015 starts on November 15, 2014 and runs through February 15, 2015.  The federally-facilitated (ie, through HealthCare.gov) Wisconsin exchange had 13 carriers in 2014, but will have 15 next year.  Two new carriers – United Healthcare and Managed Health Services Insurance Corporation – are joining the exchange for 2015, and their entry is one of the factors holding down rate increases.

Wisconsin was one of only seven states with a federally facilitated marketplace that had at least ten carriers in 2014.  But despite the robust competition, Wisconsin’s exchange rates were relatively high in 2014.  The average premium for the lowest-cost bronze plan in Wisconsin in 2014 is $287, compared with $249 nationally.

In late October 2013, Citizen Action of Wisconsin created a report highlighting the very different ACA paths taken by Minnesota and Wisconsin, and placed some of the blame for Wisconsin’s high rates on the fact that the state ultimately took a hands-off approach to the exchange and also refused to accept federal funds to expand Medicaid.  2014 rates in Wisconsin are double the rates of neighboring Minnesota.  But the rate increase for 2015 – an average of just three percent – is less than half of what is expected nationwide next year.

How many people have enrolled?

The 2014 Obamacare open enrollment period ended in April, but enrollment in the Wisconsin exchange has continued throughout the summer thanks to qualifying events that trigger special enrollment periods.  HHS will issue an updated enrollment total in November.  139,815 people had purchased private plans in the Wisconsin exchange by April 19 – nearly a 96 percent increase over the number who had done so by March 1.

In addition to the private plan Obamacare enrollments, Wisconsin’s exchange has also enrolled 97,509 residents in the state’s BadgerCare Medicaid program by the end of June.

According to a Gallup poll, 11.6 percent of Wisconsin’s population lacked health insurance in 2013.  The poll found that the rate had dropped to 9.6 percent by the middle of 2014.

Wisconsin Medicaid – a unique approach…

Wisconsin has not expanded Medicaid under the ACA, but has taken a more proactive approach than most non-expansion states in providing coverage for people living in poverty.  Wisconsin dropped the existing BadgerCare Medicaid eligibility to 100% of poverty level, which resulted in 72,000 people losing BadgerCare eligibility.  Since subsidies for private Obamacare plans purchased in the exchange begin at 100% of poverty level, the residents who lost BadgerCare eligibility were able to purchase heavily subsidized plans in the exchange instead.

However, critics have noted that a lot of those 72,000 people (with incomes just over 100% of poverty) were probably unable to afford a private plan, even with the available cost-sharing and premium subsidies.

As of the beginning of September, the state estimated that 25,800 former BadgerCare members had not yet enrolled in a subsidized plan through the exchange.  They initially had until June 30 to do so, but HHS has granted them another special enrollment period – September 4 through November 2 – during which they can apply for a subsidized plan in the federally-facilitated Wisconsin exchange.  The Wisconsin Department of Health Services has sent letters to the former BadgerCare enrollees who have not yet obtained new coverage, informing them of the special enrollment period.

But an additional 83,000 childless adults with incomes below 100% of poverty level are newly eligible for BadgerCare in 2014.  Wisconsin created their own version of Medicaid reform without using the federal funds allocated by the ACA.  As a result, the state was able to make its own rules, and people in Wisconsin with household incomes between 100% and 138% of poverty level are expected to purchase subsidized private plans – they are not eligible for Medicaid.

…but not fully expanded Medicaid

Technically, this means Wisconsin has not expanded Medicaid under the ACA (if it did, people with incomes up to 138 percent of poverty would be eligible for Medicaid and the state would receive federal funding for Medicaid expansion).  Although Governor Scott Walker has received criticism from consumer advocates, among states that have not expanded Medicaid, Wisconsin is the only one without a coverage gap, since BadgerCare was expanded to cover everyone up to 100% of poverty level (in most states that did not expand Medicaid, eligibility limits are far lower than that).

Nevertheless, several counties in Wisconsin are adding referendum questions to their ballots this November, asking citizens to weigh in on Gov. Walker’s decision to not fully expand Medicaid under the ACA.

Wisconsin’s go-it-alone approach to modified Medicaid expansion could end up being financially challenging, as the state is incurring significantly higher Medicaid spending this year, and does not have the federal government funding Medicaid expansion as they would do if the state followed the guidelines laid out in the ACA (federal funding in that case would cover 100 percent of newly-eligible enrollees through 2016, and then the state would gradually pay a small portion of the new expenses, capping out at 10 percent by 2020)

Wisconsin exchange history

Gov. Walker had previously expressed a preference for a state-run exchange rather than a “one size fits all” federally operated exchange. In 2011, Walker used an executive order to create the Office of Free Market Health Care to plan for a Wisconsin exchange.  Walker’s plan for a “free-market, consumer driven approach” leaned heavily on an insurance marketplace implemented by former Gov. Jim Doyle. According to one state insurance expert, the only notable change proposed by Walker was to put the exchange online.

However, Walker showed a changed mindset in 2012, returning a $38 million federal grant and closing the Office of Free Market Health Care. In announcing his November 2012 decision to accept a federally operated exchange, Walker said the state would have no real control and much higher financial risk with a state-run exchange.

Legal challenge to the ACA in Wisconsin

The fight against Obamacare is on-going in Wisconsin.  US Senator Ron Johnson, a Wisconsin Republican, has brought a lawsuit against the federal government over the issue of congress and congressional staffers receiving subsidies to purchase health insurance through the exchanges.

The federal government believed that the case should be thrown out, as they claim that Johnson has no legal standing since he’s not being harmed by the rule that allows congress and staffers to receive subsidies in the exchange.  In September, Johnson began an appeals process with the 7th Circuit Court of Appeals after a lower court sided with the federal government and ruled that he lacked standing to challenge the law.

The whole issue stems from language that Chuck Grassley (R – Iowa) added to the ACA when it was being drafted.  His addition requires that congress and congressional staffers lose their employer-sponsored health insurance and switch instead to exchange plans.  But those who earn too much to qualify for subsidies would be taking a significant financial hit.  They would have gone from having 75 percent of their premiums subsidized (under their government group plan) to paying 100 percent of their own premiums.  As such, the Office of Personnel Management intervened and said that congress and staffers could keep their existing subsidies and apply them to the exchange plan premiums.  Sen. Johnson is attempting to repeal that ruling.

Wisconsin health insurance exchange links

HealthCare.gov
800-318-2596

Wisconsin Office of the Commissioner of Insurance
Assists consumers who have purchased insurance on the individual market or who have insurance through an employer who only does business in Wisconsin.
(800) 236-8517 / ocicomplaints@wisconsin.gov

State Exchange Profile: Wisconsin
The Henry J. Kaiser Family Foundation overview of Wisconsin’s progress toward creating a state health insurance exchange.