Gov. Scott Walker is asking the federal government to approve a plan he expects will reduce health insurance premiums by 5 percent for about 200,000 Wisconsinites covered through the individual marketplace.
Walker on Wednesday submitted a waiver request to the U.S. Department of Health and Human Services to create a reinsurance pool — a tool available under the Affordable Care Act to compensate insurers for covering high-risk individuals who, under the Obama-era federal law, cannot be charged higher premiums based on their status.
The move is designed to bring premiums down and encourage insurers to participate in the individual marketplace.
"We feel very, very positive about our ability to get an approval, and to do so on a timely basis so we can have a positive impact for people, for small business owners, for family farmers and others on the individual market in the 2019 coverage year," Walker said on a call with reporters.
The reinsurance plan is one of several proposals Walker asked the Legislature to back as part of a "health care stability plan" in his State of the State address in January. Lawmakers approved the proposal in February, with some Democrats joining Republicans to support it.
Democrats have criticized Walker for embracing a tool made available under the Affordable Care Act after years of railing against the law and advocating its repeal and replacement.
Walker said he still opposes Obamacare, noting that Attorney General Brad Schimel is leading a group of states seeking to block the law. He also still opposes accepting the federal Medicaid expansion, which he said would only serve to put "more people on government dependence."
However, he said, he won't let people in Wisconsin insured on the individual market suffer "just to make a point."
"As long as Washington can’t fix it or repeal and replace in a way that works, we’re stepping up to do something about it," Walker said. "If we can’t depend on the U.S. Senate to get it past the finish line, we’re going to appeal to the federal government on as many waivers are reasonably possible to help the people of our state."
Wisconsin's program would cover up to 50 percent of coverage for claims between $50,000 and $250,000, up to $200 million. Wisconsin would contribute an estimated $34 million, derived from savings under the state's Medicaid program. The remaining $166 million would come from the federal government.
Insurance companies will be required to pass savings on to consumers through lower premiums, said deputy commissioner of insurance J.P. Wieske.
State officials expect that premiums would be reduced by 10.6 percent from levels that would occur without the waiver, resulting in a 5 percent overall decrease in premiums from 2018 to 2019. In 2018, premiums increased by an average of 44 percent throughout the state.
Walker said he believes the reinsurance program could encourage some insurers who have pulled out of the Wisconsin market to return. As a result, he said, people could benefit not only from lower premiums, but from more plan choices.
"By helping offset that risk pool with the reinsurance, that not only drives the premiums down, it makes it more plausible for insurers, particularly those that were here before, to re-enter the marketplace," Walker said.