During his State of the State Address in January, Gov. Walker set forth a plan to stabilize Wisconsin's health insurance Marketplace and indicated his support for legislation that would ensure protections for people with pre-existing conditions, regardless of changes at the federal level.
The State Legislature has now moved forward with one of those proposals - the Wisconsin Healthcare Stability Plan (WIHSP) - which directs the state to apply for a Section 1332 State Innovation Waiver to create a reinsurance program. If the waiver is approved, this program would be in place for the 2019 benefit year. It received some bipartisan support in the Legislature and was signed into law by Walker this week.
A part of the ACA, Section 1332 waivers allow states to modify their Marketplaces in certain ways, as long as they provide similarly affordable and comprehensive coverage to enrollees, and do not increase the federal deficit.
A reinsurance program like WIHSP reimburses insurers for a specific amount of the costs they incur when they cover especially expensive patients - such as individuals who have cancer or other costly health conditions. The ACA requires that people with costly and/or pre-existing conditions be covered and not charged more based on their health. Under a reinsurance program, insurers are better able to predict their costs and incur fewer major losses, which theoretically should reduce premiums for all enrollees. Programs in other states, like Minnesota, have led to significant premium reductions.
The waiver process includes a public comment period, during which the Office of the Commissioner of Insurance (OCI) will hold public hearings to gather feedback on the proposed reinsurance plan. OCI expects this to occur during the month of March.
The WI Healthcare Stability Plan also requires the OCI to recommend options for additional Section 1332 waivers by the end of 2018. Some of these options could affect cancer survivors and others with pre-existing conditions, such as the return to a separate high-risk pool - an idea often floated in the health reform debate. We will continue to monitor these proposals moving forward.