Topic:
LEGISLATION; STATE BOARDS AND COMMISSIONS; EMPLOYMENT (GENERAL); HEALTH INSURANCE;
Location:
INSURANCE - HEALTH;

OLR Research Report


June 14, 2006

 

2006-R-0329

WISCONSIN UNIVERSAL HEALTH INSURANCE PLAN

By: Robin K. Cohen, Principal Analyst

You asked (1) for a summary of the universal health insurance legislation that the 2006 Wisconsin legislature considered and (2) how it compares to Massachusetts' new universal coverage law (which we previously summarized in OLR report 2006-R-0285).

The Wisconsin legislature is no longer debating bills during the current legislative session, effectively rendering this particular bill dead.

SUMMARY

The Wisconsin legislature considered, but did not pass, legislation that would offer health insurance to most of the state's uninsured residents. 2005 Senate Bill 698 creates an oversight board to develop and implement a health care plan for state residents (and their dependents) who are working or have worked within the previous two months. Other residents can buy into the plan. The bill's main goals are to put most state residents into a single insurance purchasing pool to increase their purchasing power and employ a single administrative entity to reduce administrative costs.

The bill requires the plan to offer comprehensive services but excludes coverage for certain services, such as dental and vision care. It requires cost sharing but limits the maximum premiums that participants must pay.

The bill requires all state employers to pay an assessment to the state to help offset the plan costs. Employers who have fewer than 10 employees with an average annual income of less than $20,000 pay half of the regular assessment.

The Wisconsin bill shares some of the features of Massachusetts' new universal coverage law although Massachusetts' law is much more comprehensive. Both states impose employer assessments as a cost offset and create oversight boards for procuring the health plans. Massachusetts limits its plan to people with incomes up to 300% of the federal poverty level, but allows uninsured residents to get coverage. Wisconsin's bill sets no income limit but provides coverage primarily to working residents and their dependents. Massachusetts does not restrict services offered under its plan, but Wisconsin does.

WISCONSIN HEALTH CARE PLAN

Oversight Board

The bill creates a 10-member board to oversee the new plan. It consists of five people representing employers, including one small employer, and five representing employees, whom the state's main labor union appoints. The insurance commissioner chairs the board and serves as an ex-officio, nonvoting member. The bill authorizes the governor to appoint additional members with a health care connection, such as doctors.

The board must negotiate or contract with a third party to negotiate discounts from drug manufacturers and distributors. The bill allows the board to join its prescription drug purchasing arrangement with similar programs in other states to form a multi-state purchasing group. It is permitted to extend any such discount agreements to the state's other health care programs (e.g. BadgerCare) and worker's compensation.

Services

The bill directs the board to develop a health care plan, with coverage starting 13 months after the bill takes effect. It is considered a group or blanket disability insurance policy and must cover all reasonable medical services and prescription drugs needed to maintain health, enable diagnosis, or provide treatment, including comparable coverage for mental illness and substance abuse treatment. It must also cover wellness and chronic disease management programs.

The bill requires all plan participants to choose a primary care physician (PCP) to coordinate their health care.

Services Not Covered. The bill specifies that the plan does not cover dental or vision care, long-term care, or reconstructive or cosmetic surgery that is not medically necessary.

Payment for Services. The bill requires the board to establish provider payment rates that must be fair and adequate to ensure the highest quality of practitioners. Rate increases cannot exceed medical inflation. Providers must accept these payments, combined with cost sharing, as payment in full and may not bill plan participants for the balance.

Eligibility

The plan must cover (1) employees, (2) people unemployed for no more than two months, and (3) dependents of the first two categories of participants.

Individuals under age 65 who do not meet any of these criteria can buy into the program at a cost the board determines. People eligible for Medicare do not qualify. Self-employed individuals are not eligible, even if they employ others.

Cost-Sharing

The board determines the program's cost-sharing requirements, including co-payments and premiums. The premiums must represent the actual cost of coverage. Failure to pay the premiums results in a loss of coverage.

The bill limits annual premiums (except for those people buying into the program) to $300 for a single person and $600 for a family. Prescription co-payments may not exceed $15 for generics and $20 for brand name drugs. All other health service co-payments may not exceed $15 per visit. But individuals going to specialists without a referral from their PCP must pay a 25% co-payment. The board can modify the cost sharing caps if doing so will not have a “substantial effect” on the insured person's costs.

The bill directs the board to establish guidelines for allowing emergency specialist care without referrals or cost sharing.

Assessments

The bill requires all employers to pay a flat monthly assessment, for each employee. The board determines the assessment, which must be sufficient to cover the plan's administrative and operating costs. Employers (1) with fewer than 10 employees and (2) whose employees' average annual income is less than $20,000 pay 50% of the assessment.

Federal Funds to Cover Residents Otherwise Eligible for Public Insurance

The bill requires the Insurance commissioner to request federal waivers to allow people who are otherwise eligible for Medicaid, BadgerCare (coverage for children and caretakers who do not qualify for Medicaid and funded with federal State Children's Health Insurance Program (SCHIP) block grant), or any other health program (except Medicare) that is at least partially federally funded to participate in the program.

HOW WISCONSIN COMPARES TO MASSACHUSETTS

Table 1 compares some of the main features of Wisconsin's bill and Massachusetts' new universal health care law.

Table 1: Comparison of Wisconsin and Massachusetts Universal Health Legislation

Provision

Wisconsin

Massachusetts

Employer assessment

Unspecified amount on all employers; employers of 10 or fewer low-paid employees pay half

$295 flat per employee assessment from employers of 11 or more employees who do not offer coverage

Oversight Board

Yes

Yes

Eligibility—Work requirement

Employed or unemployed for no more than two months

Employed or unemployed

Financial eligibility

No income limit

300% of federal poverty level

Free-rider surcharge on employers

No provision

Yes

Service limits

No dental, vision, long-term care, or medically unnecessary reconstructive surgery

No limit

Cost Sharing

$300/$600 cap on premiums

No provision

Individual health care coverage mandate

No provision

Yes, with financial penalty for failure to obtain

Young adult coverage (ages 19-26)

No provision

Yes

Increases in income eligibility for Medicaid

No provision

Yes

Moratorium on legislative health care mandates

No provision

Yes

RC:ts