Despite the clear repudiation in Massachusetts last week of government-run health care schemes, Governor Jim Doyle still shows that his first instinct is to create a new government program rather than look to the private sector for health care solutions.
Doyle is proposing a new health plan to cover Wisconsin’s uninsured. The plan, Badger Care Plus Basic, is in addition to the state’s other health care plans, traditional Badger Care and it’s Core Plan. The traditional Badger Care Plus and Core Plan health care programs are the state’s versions of the federal Medicaid programs.
The Core Plan covers childless adults up to 200% of the poverty line if they do not qualify for any other federal assistance. The need for a new health care plan became evident when the Core Plan ran out of money and could no longer accept new applicants. Doyle’s new government-run health care plan, Badger Care Plus Basic is supposed to take care of the 20,000 people on the waiting list for the Core Plan which was his new government-run health care plan that followed the first one, the original Badger Care Plus, which actually was an outgrowth of the original, original Badger Care. Got that?
Badger Care Plus Basic is a state-run insurance program that provides very basic health insurance without many of the state’s mandates for a monthly premium of $130 for those that would otherwise have been eligible for the Core Plan. (The state is willing to free itself from its mandates, but will not do the same for private sector companies who would love to offer new products) Badger Care Plus Basic is supposed to be self-funding from the monthly premiums, aside from $1 million in federal funding. It does not offer catastrophic care, but pays for up to 10 physician visits, limited hospitalization, five emergency room visits annually, as well as generic medication and Badger Gold RX discount drug membership.
The plan is not private insurance and does nothing to remove the barriers to private insurance offering plans to Wisconsin’s poorer residents. It is generally understood that the state’s health care mandates drive up the costs of private health insurance. Commenting on the new health insurance mandates for 2010, Phil Dougherty, senior executive officer of the Wisconsin Association of Health Plans, said to the Associated Press, “Every indication is that the mandates have increased costs and cost expectations will be higher for 2010.”
Badger Care Plus Basic also reimburses health care providers at the Medicaid rates. This will mean less health care options for the program recipients, as some providers will avoid participation. It will also mean health care providers will recoup their costs from the private insurance consumer to cover the care of the Badger Care Plus Basic patients.
Contrast this approach to the approach of state government in Florida. Under Cover Florida, private insurance providers participate in a program to offer health insurance without many of the state mandates to the poor.
The result is a program where insurance consumers can purchase health insurance from six different providers for as little as $50 a month. Unlike the Wisconsin state-run program, consumers in Florida can choose between catastrophic care and preventative care. Many of the plans for preventative care are, on average, less cost to the consumer than the state of Wisconsin’s state-run plan.
Cover Florida is not without problems. Enrollment in the program has been slow. As of last August, only 3,757 people enrolled. Governor Charlie Crist says it is because the state is not promoting the program (so the program does not cost taxpayers), so many of the potential enrollees are not yet aware of the program. Others point out some Floridians still cannot afford the plans. And for some Floridians, even if they can afford the plans, the insurance offered is not worth the cost to them.
Wisconsin’s Badger Care Plus Basic will also be too expensive for some potential enrollees. Some potential enrollees, too, will decide the monthly premium is not worth it for the little coverage received.
But Badger Care Plus Basic will also have the additional burdens of not offering as many choices as Cover Florida, including the option of catastrophic care. It will also increase costs for the private health insurance consumer at a time when no one can afford higher prices on, well, anything.
Better for the legislature to look to the private sector for a solution than create one more flawed, under-funded state program.
By James Wigderson
Special Guest Perspective for the MacIver Institute