Personal Finance photo: April 28

A new report released this week by Citizen Action of Wisconsin reveals health consumers in Wisconsin will pay on average a stunning 79 to 99 percent more for health insurance than their counterparts in Minnesota on the new marketplaces created by the Affordable Care Act.

The gap is so dramatic that one Minnesota lawmaker has even called for placing billboards on the Minnesota/Wisconsin border touting his state’s more affordable health insurance rates.

As shocking and damaging to Wisconsin health consumers as this rate gap is, even more importantly the report shows that two critical decisions made by the Walker administration explain a substantial portion of the rate disparity.

The fundamental difference between the two states, which are similar geographically and demographically and have very similar underlying medical costs, is that Minnesota has embraced the national health care reform law and is using the tools it provides to deliver more affordable health insurance, while the Walker administration has tried to undermine the law at every turn.

Gov. Scott Walker’s decision to turn down enhanced federal Medicaid dollars, and his administration's decision not to implement more robust rate review, can explain a substantial portion of the premium gap with Minnesota.

It is already well known that Walker’s decision to reject the Medicaid funding to strengthen BadgerCare cost the state budget $119 million more to cover fewer people. This report shows that forcing more low-income Wisconsinites into the new marketplaces (also known as exchanges) will also increase the health insurance premiums for everyone else.

A recent Rand Corporation report estimated that states rejecting enhanced federal Medicaid dollars will increase premiums from 8 to 10 percent by making the overall insurance pool less healthy and therefore more costly. The reason is that lower-income people are relatively less healthy, and low-income people with health conditions are more motivated to enroll, pay higher premiums and cost share. This means that insurance premiums on the Wisconsin marketplace on a typical plan will cost an average $207 more per year because the Walker rejected enhanced federal BadgerCare dollars.

Another key difference is the two states’ dramatically different approaches to rate review. An important provision of the Affordable Care Act tasks state regulators with reviewing health insurance premium rate increases to determine if they are excessive.

Minnesota has a robust rate review process, and took the additional step of rejecting health insurance rates that were unjustified, lowering rates on their new marketplace by up to 37 percent. Scott Walker’s insurance agency, in stark contrast, has been so passive in its rate review that it has yet to find a single health insurance rate submission to be excessive.

Overall, the report concludes that Walker’s decision not to use the tools made available by the national health care reform law may cost Wisconsin consumers as much as $1,000 more per year in health insurance premiums. This dwarfs the meager $13 tax reduction Walker and his conservative allies are touting.

If anyone is actually listening, these numbers ought to shake up the health care debate in Madison. Most Wisconsinites are tired of the conservative obsession with sabotaging health care reform. Few doubt that access to quality affordable health insurance is not a luxury, but is indispensable to the opportunity to thrive, prosper and achieve the American dream in the 21st century. Shockingly higher premiums ought to be a clarion call for lawmakers to put aside the ideological divisions that have plagued the health care debate, and work cooperatively to secure the full benefits of national health care reform for Wisconsin.

Robert Kraig and Kevin Kane, co-authors of the report, are executive director and lead organizer for Citizen Action of Wisconsin. The full report is available at

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