OCI Evaluates Options to Stabilize Individual Market as Costs Rise, Insurers Exit

November 17, 2017

Deputy Commissioner J.P. Wieske from the Wisconsin Office of the Commissioner of Insurance (OCI) told members of WHA’s Public Policy Council at their November 16 meeting that the conditions are worsening in Wisconsin’s individual market as insurers exit the market, leaving some counties with little or no choice in insurers and with triple digit premium increases in the Green Bay area, double in other counties.

According to Wieske, the individual insurance market in Wisconsin has lost $400 million over the last three years. Premiums for the second least costly silver-level plan on the exchange are increasing an average of 50 percent for 2018, but that varies by region. In Green Bay, for example, premiums for the second least expensive silver plan are increasing 105 percent. More than 200,000 people in Wisconsin purchase insurance on the exchange, most receiving an advance premium tax credit. Wieske said those who did not receive a tax credit are leaving the market, a trend he said is unlikely to change.

To mitigate the price increases and get more healthy lives into the market, OCI is looking at options within the 1332 waiver process. The state has released a request for information (RFI), and is seeking a contractor to help them craft a proposal.

“We feel we need a vendor for a couple of reasons. First, we need someone who can do an economic analysis in partnership with an actuary, but, secondly, we also need someone who can do a ‘back-of-the-envelope’ calculation before we go full blown,” Wieske said. While reinsurance was discussed as one option, Wieske said it puts money into the system but it does not solve the basic problem, which is to get more people into the exchange. He said Gov. Scott Walker is concerned about the “benefit cliff” for people with income at 400 percent of the federal poverty level (FPL) when tax credits fall off -- people are foregoing raises and promotions to keep the subsidy because those with income over 400 percent FPL can’t afford to purchase insurance. Wieske said OCI is open to options, and is looking at Iowa, Indiana and other states for possible ideas of what might work in Wisconsin. Because currently the federal law requires that 1332 waiver proposals be approved in state law, the timeline for developing a proposal is short. To affect the 2019 benefit year, a proposal would have to pass the state legislature in March, and be submitted to the federal government by April.

“We all have to row in the same direction and have agreement,” according to Wieske. “2019 might be an unrealistic deadline. We might have to do one piece at a time and then do a second round. But we are willing to look at options with a goal to affect the insurance market by 2019 because of the crisis we feel we are in.”

WHA President/CEO Eric Borgerding reiterated WHA’s key priority which is for any reform to sustain the gains in coverage. He referenced current federal proposals to repeal the individual mandate. He also noted that the ACA requires that1332 waivers have certain “guardrails,” including that the state demonstrate that the proposal would provide the same level of coverage, the same level of affordability, and the same level of insured lives as would occur without the waiver. Given that, he asked Wieske for his opinions on the individual mandate, and on what changes to the 1332 waiver guardrails might be helpful to the state.

“I am not convinced the individual mandate has helped. People respond to appropriate economic incentives and try to get around them,” according to Wieske. “Voluntary coverage is more effective…The simple reality is that there are those who will not buy certain coverage and it’s expensive. The way is to offer a product they can afford, get them in the system, and use those dollars to subside others.”

On the 1332 waivers, Wieske noted that the state would be interested in offering less comprehensive benefit packages that might be cheaper and incent younger and healthier individuals to sign up for coverage. But, if nothing happens in Congress, Wieske said OCI will have to live within the parameters they now have and use those to move the market.

“I don’t believe in ideal situations. If it gets better, we have more flexibility,” he said. “If it doesn’t, we’ll live with what we got.”

The State Budget and Fall Session

In his report, WHA Senior Vice President Kyle O’Brien said Wisconsin’s 2017-19 biennial budget was signed into law on September 21, laying out the state’s $76 billion spending plan through June 30, 2019. The budget bill Walker signed includes nearly all of WHA’s key initiatives, including a significant increase in the state’s Medicaid Disproportionate Share Hospital (DSH) program, a $1.5 million increase in graduate medical education grant funding, and investments to support training the state’s rural health care workforce as part of the Rural Wisconsin Initiative.

Wisconsin’s Medicaid DSH program was increased by over $60 million, taking Wisconsin’s total Medicaid DSH program up to $134 million over the two-year budget. In addition, the Joint Finance Committee (JFC) recognized rural hospitals who do not qualify for DSH because of a federal law criteria that requires the hospital to provide OB services. The JFC provided $1.2 million in state and federal funds to support these rural hospitals who treat the same level of Medicaid patients as Medicaid DSH hospitals.

WHA led a coalition of health care organizations, and worked very closely with the chair of the Wisconsin Board of Nursing, to advance an enhanced Nurse Licensure Compact in Wisconsin. Since 2000, Wisconsin has been part of an interstate licensing agreement that reduces regulatory burden on nurses looking to practice in Wisconsin and provides nurses with license portability to treat patients in 24 other Compact states. Senate Bill 417 has passed both the State Senate and Assembly, clearing the way for this bill to be sent to the desk of Governor Walker for his signature. The Governor has already publicly expressed his support for Senate Bill 417 by incorporating the legislation into his recently released “Rural Agenda.”

O’Brien noted Senate Bill 417 passed the Assembly and Senate unanimously. WHA expects the bill to be signed into law in the coming weeks. A group of 97 bipartisan coauthors sponsored the bill, led by Sen. Howard Marklein (R–Spring Green) and Rep. Nancy VanderMeer (R–Tomah).

O’Brien said the Assembly has unanimously approved Assembly Bill 538, a WHA-led bill reconciling Wisconsin’s emergency detention law with federal EMTALA (Emergency Medical Treatment and Active Labor Act) requirements for appropriate transfers of patients and providing additional liability clarity for health care providers treating patients during a mental health crisis. The bill has been in development for several years in conjunction with WHA, the Wisconsin Counties Association and in consultation with law enforcement organizations.

Matthew Stanford, WHA General Counsel, led a Council discussion on licensure bill proposals currently being advanced by advance practice nurse and physician assistant groups. Stanford shared work and proposals that WHA has proactively offered to advance and reduce confusion regarding the licensure of nurse practitioners, CRNAs, certified nurse midwives, and clinical nurse specialists and to remove regulatory barriers to the practice of advance practice nurses in a team-based care setting.

WHA leads coalition to oppose medical fee schedule in worker’s comp program

A proposal that would enact government price controls for medical care delivered to injured workers is facing strong opposition from a coalition of health care providers, led by WHA. And the facts do not support the allegations that are being used to support the latest effort to reduce provider rates in the worker’s compensation program, according O’Brien.

O’Brien said WHA has been working with health care liaison partners and a broader coalition of provider organizations to oppose the legislation. That group has highlighted the fact that effective October 1, Wisconsin employers experienced a significant reduction in worker’s compensation premiums for the following year, all without implementing a government fee schedule for health care services.

“Our members are working in partnership with local employers to help them manage their health care costs and prevent work-related injuries,” O’Brien said. “If workers are injured on the job, they receive some of the highest quality care in the nation. Because of that, they use fewer medical services, are more satisfied with their care, initiate fewer litigated claims and return to work faster than every other state in the nation. Wisconsin’s health care providers are delivering value to our work comp program. Worker’s comp is an asset in Wisconsin for job creation, not a liability.”

Federal update: Repeal and replace

Jenny Boese, WHA vice president, federal affairs and advocacy, reviewed the latest developments at the federal level related to regulations and a variety of legislation of importance, including recent tax reform legislation pending in both the U.S. Senate and U.S. House (see “tax article”); 340B legal and legislative advocacy (see “340B article”); Medicare extenders (see “MDH/LVA” article) along with the outlook for the rest of 2017.

WHA activities supporting members’ integrated physician enterprise

The Council discussed how WHA can best support its members’ integrated physician and clinic enterprise now and in the future, in particular providing guidance regarding future WHA reimbursement advocacy.

This discussion was a continuation of the work of the WHA Physician Leaders Council and the WHA Board at its July planning session and October meeting.

“As WHA’s members’ focus has evolved beyond the traditional ‘walls’ of the hospital to a presence as local and regional integrated health systems, WHA’s focus has similarly evolved,” said Borgerding. “The input provided by the Public Policy Council will help guide WHA as we continue to work to ensure WHA’s advocacy efforts serve the needs of our members now and in the future.”

WHA State PAC & Conduit Report

Boese and Nora Statsick updated the PPC on fundraising efforts for the Wisconsin Hospitals State PAC & Conduit is at 90 percent of its 2017 goal of raising $312,500. (See PAC article)

This story originally appeared in the November 17, 2017 edition of WHA Newsletter