WisBusiness: Bipartisan health plan calls for mandatory employer assessments to fund purchasing pool

By Joanne M. Haas

MADISON — A bipartisan health insurance plan aimed at easing Wisconsin’s health care cost crisis got a chilly reception Wednesday by a key Assembly committee.

The Republican chair of the panel urged his skeptical colleagues to overlook the numbers and consider the idea, which would couple mandatory employer assessments with personal portable health insurance purchasing accounts.

“I want a public policy debate about the concept…
We are not trying to sell a finished product here,” Chairman Rep. Curt Gielow, R-Mequon, told the Assembly Medicaid Reform Committee at the Wednesday morning meeting.

“The question here is, is this a public debate worth having? And are we on the trail of something that has the potential to be equally displeasurable to all sides?”

Displeased clearly was the response from some
Republican committee members who poked holes in the estimated financial benefits presented by authors of The Wisconsin Health Plan, which would create a government-driven health insurance purchasing pool funded with assessments from all employers, including the self-employed such as farmers.

The plan’s goals are to ease health care costs, get coverage to the uninsured and solve the Medicaid deficit.

The proposal, promoted as another way to “jump-start the economy,” attract big business and get coverage to the 500,000 or so now uninsured, also would merge BadgerCare and Medicaid into the purchasing pool.

However, Wisconsin would need to secure a federal
waiver first. And, under the plan, any Wisconsin adult between the ages of 18 – 64 would receive a health insurance purchasing account to fund coverage from competing insurance plans, as well as a $600 health savings account.

“Radical is a kind term for this proposal in my
opinion,” Committee member Rep. Robin Vos, R-Racine, told Gielow of the plan proponents contend will reduce the 15 to 16 percent of payroll costs employers now spend on employee health care premiums.

“You call it an assessment, I call it a tax,” added committee member Rep. Leah Vukmir of Wauwatosa, regarding the employer assessments which would fund the program.

The assessments would be based upon the
percentage of Medicare wages employers report on 441 tax form or schedule SE — from 8 percent of the first $100,000 of Medicare wages to 12 percent for any amount $500,000 and more.

Gielow helped create the plan with Rep. Jon Richards, D-Milwaukee, and David Riemer and Lisa Ellinger of The Wisconsin Health Project. Riemer is the former budget director for Gov. Jim Doyle.

Joe Leean, who also testified Wednesday, is a former Republican state senator who served as secretary of Health and Family Services under Gov. Tommy G. Thompson.

“We’re in a health insurance crisis,” said Leean, a former co-chair of the Joint Finance Committee who helped create BadgerCare.

“I believe the stars are somewhat lined up to actually doing something beyond just nibbling at the health care crisis.”

Leean said Wisconsin employers are having a hard time being competitive with other states due to increasing health care costs for workers.

Riemer and Gielow agreed, and said the nationally known double-digit percent increase in employer health care costs is harming the state’s potential to create jobs and attract businesses.

Leann said the plan could cap employers’ health care costs at 12 percent with fewer increases, adding Wisconsin then could become a magnet for larger employers seeking to locate in a place that has solved the health care cost problem.

If the plan is implemented, Riemer said legislators could quit turning to short-term budget fixes to fill the ever-increasing costs of Medicaid — which now faces a $1 billion hole considering the state and federal revenue shortfalls with increasing participation.

“The plan is structured in way that would free up
nearly $1 billion in the state’s biennial budget,”
Riemer said. “The revenue could be used to cut taxes or make needed investments.”

And, supporters said, because the 5 million or so
covered by the pool would be selecting their own
insurance plans, the market forces would in turn fuel healthy competition among insurance companies vying for consumers.

Participants could select from various
level plans with varying deductibles, some of which could be covered from funds in the health savings account.

The entire system would be managed by the Health
Insurance Purchasing Corp., which Riemer described as a private corporation with a nine-member board of representatives from labor and business.

Riemer said meetings were held with more than 150
groups regarding the creation of the proposal. And, like Gielow, Riemer said they are seeking more feedback as the proposal continues to be developed.

Dian Palmer, president of the SEIU (Service Employees International Union) Wisconsin State Council, said the unveiling of such a proposal is a good sign.

“It is absolutely essential to the well being of the state that the Legislature get down to the difficult job of crafting real health care reform,” Palmer said today.