Governor Walker announced yesterday that Wisconsin would not pursue designing an Exchange, the marketplace through which many will be purchasing their health insurance plans starting next fall. As part of Obamacare all states are to have such marketplaces up and running. It is each state’s choice as to whether or not to design and implement the plan or to have the federal government do it.
Covering Kids and Families’ project coordinator, Michael Jacob, did an interview for a local ABC TV affiliate about this decision: The newscast does a nice job of explaining what the Governor chose and why.
The question on many people’s minds is does it make a difference to have a state versus a federal Exchange. My general impression is “not as much as people think.” For those who will be choosing their future health insurance plans through this online marketplace, there will still be options. One would assume that the federal representatives will negotiate with insurers who offer products in Wisconsin, and will hold them to the standards set in an agreed upon Essential Benefits Package. So when it comes time for choosing plans starting October 2013, that marketplace/Exchange should be up and running. Plans will then go into effect January 2014. In the past Wisconsin’s Office of the Commissioner of Insurance has done a solid job of protecting consumer interests as new insurers offer products in the state. And Wisconsin has been a leader in this regard. Perhaps the feds will not be as thorough but I cannot see any evidence of that. The Huffington Post did post an article talking about the impacts of federal Exchanges.
The one issue cited there that I am concerned with is how effortlessly people whose eligibility status for Medicaid may change over time will be directed through the Exchange enrollment process to the plan that is right for them. This is because it is the Exchanges that will be channel through which all uninsured people apply. Based on an individual’s or family’s circumstances they will be offered different types of insurance plans. And if they are eligible for their state’s Medicaid program, the online Exchange is to direct them to that plan rather than the private ones in the marketplace of plans.
Since the Medicaid programs are state administered, even though they are paid for by both state and federal dollars, there is a legitimate concern that outside folks developing a Wisconsin federal Exchange may be less likely to have all of the correct information to make that transition completely smoothly. One would suspect though that it should work well if the state is closely involved with at least that aspect of the development of the Exchange. If not, then yes, this could be a significant barrier to ease of enrollment into Medicaid for people who are otherwise eligible. And those on Medicaid are our lowest income Americans who are often living in less than desirable conditions creating a perfect storm for their likely need for timely and appropriate health care access. It will be significant barrier to those individuals to remain uninsured, to not have a funding stream following them to the doctor, clinic or hospital (which is what Medicaid is in the eyes of those providers). Review the Kaiser Family Foundation map of US to see where states stand on their roles with the Exchanges.
The way the insurance aspect of Obamacare works is that there are THREE main ways that people will get insurance. Think of this as a three legged stool that needs all three legs to stand. All parts need to function in order to move to having fewer uninsured Americans.
- The first, and most common, is that people will get health insurance through their places of employment, just as most do today.
- The second is through the Exchanges. Many who have been uninsured before will look to that marketplace to have affordable options. Those options will be more affordable for them than they are today because of the power of larger groups of people, healthy and non-healthy, being mixed together in the insurance pools. This should bring premiums down. And remember, because of the individual mandate, everyone will be required to be insured or face fines. This is to insure that healthy people join the mix. There is good evidence that it has worked in Massachusetts, a state with a mandate. Here is a nice summary article on how well Massachusetts did.
For some who have trouble purchasing insurance because of income there will be tax credits to make that insurance affordable. For some, they will be exempt from the mandate. And because of consumer protections, no one will be denied the ability to purchase insurance because of a pre-existing conditions. Insurers were willing to play this game of insuring those with pre-existing conditions because the healthy would be mandated to buy insurance. As long as there are healthy people in the pool paying premiums, as proved in Massachusetts, then this spreading of risk works. And I think we should all remember that either we or a loved one are in reality just a step away from having a tragic medical event occur that would cost us dearly if we didn’t have insurance. American on the whole seem to support everyone being able to be insured. The battles had been over how to get there. We now have a law that got us closer to having all insured.
- The third leg of the stool are the public insurance programs. These include Medicare, Veterans Benefits, Indian Health Service, all federal programs, and Medicaid, a state-federal partnership program. As mentioned above, directing people who are eligible into the Medicaid part of this third leg will not be a concern if there is a close relationship between Wisconsin and the feds on this technical aspect of the online enrollment as the federal Exchange for Wisconsin is designed. As for having Medicaid bolster up the number of insureds in Wisconsin, this may not be as much the case as some had hoped. While Obamacare did require that states expand Medicaid coverage to individuals under 138% of the federal poverty line or face significant threats to that program overall, the Supreme Court negated the Department of Health and Social Services ability to penalize states who did not expand their eligibility criteria. At this time it does not appear that Wisconsin will be expanding eligibility for our Medicaid program as Obamacare would have allowed. I have provided a fact sheet here from Kaiser Family Foundation on where states stand on Medicaid coverage.
All the links in the above article for anyone who prints this to share.
Michael Jacob, interview: http://www.wkow.com/story/20123676/impact-of-health-care-decision
Huffington Post article talking about the impacts of federal Exchanges: http://www.huffingtonpost.com/2012/11/15/health-insurance-exchanges_n_2138576.html
Kaiser map of US with state Exchange info: http://healthreform.kff.org/en/the-states.aspx
Massachusetts Exchange story: http://www.cbsnews.com/8301-18563_162-57459563/massachusetts-health-care-plan-6-years-later/
Kaiser fact sheet for Medicaid: http://www.kff.org/medicaid/7993.cfm