With soaring premiums in Wisconsin next year on the Affordable Care Act exchange, Gov. Scott Walker is talking about seeking a federal waiver, advocates are pressing for a "public option," and President Donald Trump’s call to end payments to insurers may be causing confusion over the health law's two types of subsidies.
Rates for individual insurance on the Obamacare exchange will go up an average of 36 percent in the state next year, Walker’s administration announced Thursday.
About 90 percent of the 216,000 residents who buy insurance on the exchange get subsidies to cover most of their premiums, so they won’t see a direct impact from the hikes, said J.P. Wieske, deputy commissioner of insurance.
Still, the departure of three national insurers from the exchange in Wisconsin is forcing about 75,000 people to switch plans and raising questions about the stability of the market, Wieske said.
The Walker administration is looking at seeking a waiver that would let the state set up its own system for insurance in 2019 under the health law, as other states have done.
“If Washington, D.C. fails to deliver on its promise of repealing and replacing Obamacare, we will explore our options in seeking greater flexibility from the federal government to help lower costs for Wisconsin citizens,” Walker said.
On Friday, Citizen Action of Wisconsin said health insurance premiums would be cheaper for many people who buy coverage on their own if the state let them purchase BadgerCare, the state’s Medicaid plan.
With conservative politicians undermining and sabotaging Obamacare, the so-called public option would cost "less everywhere, by a dramatic amount," said Robert Kraig, executive director of the left-leaning group.
A proposal for the public option, introduced in July by Democratic legislators, has little chance of passing in the Republican-controlled Legislature.
President Trump said late Thursday he would cancel payments to insurers to cover discounts the companies must provide to low-income people on the exchange. Democrats, including Wisconsin Senator Tammy Baldwin, called for Congress to restore the payments.
The payments, which cover deductibles and other cost-sharing for people with incomes of 100 percent to 250 percent of the federal poverty level, are different from the health law’s premium subsidies. The subsidies, for people between 100 percent and 400 percent of the poverty level, are tax credits covering all but 2 percent to 10 percent of monthly premiums.
The Trump administration has long threatened to end the payments to insurers, which are the subject of a lawsuit, but the government has continued to pay them. Now Trump is saying he no longer will.
That could lead to a spike in premiums, but in Wisconsin it's already factored into the 36 percent increase. The state told insurers to assume the payments would not be made next year, so they boosted rates accordingly, Wieske said.
Trump also issued an executive order Thursday calling for the sale of cheaper, less-regulated insurance plans.