Gov. Scott Walker is exploring a self-insured health insurance program for state employees, something that could dramatically change how medical care is provided in Wisconsin.
Currently the state contracts with 18 health maintenance organizations (HMOs) that provide insurance coverage to more than 246,000 persons - including state government workers and their families as well as more than 40,000 local government workers and their families.
The HMOs assume the financial risks, something that has led to an emphasis on preventive care and health-centered programs. Under self-insurance, the state would bear the financial risk.
Last year a consultant suggested the state might be able to save $20 million by becoming self-insured, largely by avoiding fees and taxes under Obamacare for fully insured health plans.
But the consultant also warned the proposed shift could end up costing the state an additional $100 million. The Wisconsin Association of Health Plans, which represents many of the larger HMOs, has a bigger estimate of the potential additional costs.
It says the move could cost the state in excess of $200 million as well as costing 1,000 jobs and threaten the competitive nature of the HMO approach widely used in Wisconsin. That could impact many private employers who use the HMOs and the preventive care approach for their own workers.
Unlike the public employee union busting of 2011, this move would have an impact on the private sector as well. Would it mean higher HMO insurance costs for private sector employers who use the approach?
The trade organization has warned that the new approach could affect doctor-patient relationships and create instability in the Medicaid program. Again this would be spread out beyond the public employee sector.
Both financial and political dangers for Walker seem to lurk in the self-insured approach to health care. The political question is the reaction of insurance companies, HMOs, doctors and other providers.
A possible $20-million annual gain versus a possible loss of $100 million seems a bad bet. You might want to try your hand at a casino instead.
On the financial end, Democrats will remind voters that Walker may be interested in saving $20 million, but he turned down more than $400 million in federal funds to expand Medicaid for the working poor. Under Obamacare, the federal government would pay the entire cost of the extended Medicaid for three years and 90 percent thereafter.
Refusing the additional Medicaid money pleased the moneyed conservative groups that oppose expansion and want to repeal Obamacare. Walker, who apparently has ambitions to be on the Republican national ticket in 2016, explained his refusal, questioning the federal government's ability to pay over long term for such an approach.
Timing of a change to self-funding of health insurance will play a role in the decision. A change would be effective for 2015, but the decisions on how to proceed would occur next year in the midst of a gubernatorial election. Of course the polls by then may show Walker with a commanding lead in that race, and a major health care-change wouldn't impact the outcome of the election.
Wisconsin's emphasis on HMOs is three decades old and came in under a Democratic administration and a Democratic-controlled Legislature. In today's hyper-partisan world, that ought to be enough to convince some conservatives it is a bad approach.
- Matt Pommer, a 35-year veteran of covering state government in Madison, writes the weekly State Capitol Newsletter for the Wisconsin Newspaper Association. His column is published Monday in the Times.
Currently the state contracts with 18 health maintenance organizations (HMOs) that provide insurance coverage to more than 246,000 persons - including state government workers and their families as well as more than 40,000 local government workers and their families.
The HMOs assume the financial risks, something that has led to an emphasis on preventive care and health-centered programs. Under self-insurance, the state would bear the financial risk.
Last year a consultant suggested the state might be able to save $20 million by becoming self-insured, largely by avoiding fees and taxes under Obamacare for fully insured health plans.
But the consultant also warned the proposed shift could end up costing the state an additional $100 million. The Wisconsin Association of Health Plans, which represents many of the larger HMOs, has a bigger estimate of the potential additional costs.
It says the move could cost the state in excess of $200 million as well as costing 1,000 jobs and threaten the competitive nature of the HMO approach widely used in Wisconsin. That could impact many private employers who use the HMOs and the preventive care approach for their own workers.
Unlike the public employee union busting of 2011, this move would have an impact on the private sector as well. Would it mean higher HMO insurance costs for private sector employers who use the approach?
The trade organization has warned that the new approach could affect doctor-patient relationships and create instability in the Medicaid program. Again this would be spread out beyond the public employee sector.
Both financial and political dangers for Walker seem to lurk in the self-insured approach to health care. The political question is the reaction of insurance companies, HMOs, doctors and other providers.
A possible $20-million annual gain versus a possible loss of $100 million seems a bad bet. You might want to try your hand at a casino instead.
On the financial end, Democrats will remind voters that Walker may be interested in saving $20 million, but he turned down more than $400 million in federal funds to expand Medicaid for the working poor. Under Obamacare, the federal government would pay the entire cost of the extended Medicaid for three years and 90 percent thereafter.
Refusing the additional Medicaid money pleased the moneyed conservative groups that oppose expansion and want to repeal Obamacare. Walker, who apparently has ambitions to be on the Republican national ticket in 2016, explained his refusal, questioning the federal government's ability to pay over long term for such an approach.
Timing of a change to self-funding of health insurance will play a role in the decision. A change would be effective for 2015, but the decisions on how to proceed would occur next year in the midst of a gubernatorial election. Of course the polls by then may show Walker with a commanding lead in that race, and a major health care-change wouldn't impact the outcome of the election.
Wisconsin's emphasis on HMOs is three decades old and came in under a Democratic administration and a Democratic-controlled Legislature. In today's hyper-partisan world, that ought to be enough to convince some conservatives it is a bad approach.
- Matt Pommer, a 35-year veteran of covering state government in Madison, writes the weekly State Capitol Newsletter for the Wisconsin Newspaper Association. His column is published Monday in the Times.
