(2017 Wisconsin Act 138)
Many small, independent business owners and their employees access health care coverage for themselves and their families through the individual health insurance market. After seven years of ObamaCare, this market is collapsing. In its most recent report to the Wisconsin State Legislature, the Office of the Commissioner Insurance (OCI) highlighted that fact by noting:
“There are 16 health insurers – down from 28 prior to the enactment of the ACA – selling individual health coverage plans in the state and even fewer of them (11) are offering plans on the federal health insurance exchange. Throughout much of the state, there are only two health insurance plans available for purchase on the exchange. In Northeast Wisconsin, there is only one exchange-offered plan available. Rate increases for exchange-offered plans in 2018 averaged 38% and in some areas of Wisconsin were as high as 105%.”
Earlier this year, state lawmakers approved a plan to stabilize Wisconsin’s individual health insurance market which in turn should bring at least some modest financial relief to small employers and their employees who purchase health care coverage for themselves and their families on the federal health insurance exchange.
The Wisconsin Health Care Stability Plan (WHCSP) is modeled after similar programs operating in Alaska, Minnesota and Oregon. Under this plan, the State of Wisconsin will operate a health care reinsurance plan. Reinsurance is essentially insurance for insurance companies. It helps insurers manage high cost claims and offers a greater level of market predictability for insurers when setting rates.
The WHCSP will cover between 50% and 80% of an individual’s annual health insurance claims costs between $50,000 and $250,000 (paid directly to the insurer). Annual funding for the WHCSP is a shared responsibility. Federal funding of $166 million is matched by $34 million from the State of Wisconsin.
With the WHCSP in place, the State of Wisconsin estimates the premiums for federal health care exchange-offered plans will be reduced by 10.6% from levels that otherwise would have occurred, resulting in a 5% decrease in 2019 premiums, compared to 2018.