Wisconsin Has More at Stake than Most States if Court Ends Insurance Subsidies
Wisconsin has more at stake than most other states when the U.S. Supreme Court issues a ruling in King v. Burwell, which will determine whether people can continue to get federal tax credits for health care coverage purchased through the federal health insurance marketplace.
The ruling, which will probably be issued in the next week or two, could be a serious blow to the Affordable Care Act (ACA) and to health care access in Wisconsin. It could eliminate insurance coverage for 183,000 Wisconsinites who have purchased private plans through the federal marketplace. In addition, because eliminating those insurance plans would drive up costs for other individual plans, the Urban Institute estimates that a total of more than 8 million Americans, including about 247,000 Wisconsinites, would become uninsured in 2016.
The WI Council on Children and Families (WCCF) issued a short paper today that examines the potential effects in Wisconsin and analyzes the geographic distribution of the people who have purchased insurance through the federal health insurance marketplace. We found that the health insurance marketplace is especially important in rural areas of the state, where the percentage of people with marketplace plans is typically about twice the participation rate in urban parts of Wisconsin.
“Losing the marketplace subsidies would push many people in northern Wisconsin back into uninsured status,” said Reba Rice, CEO of the NorthLakes Community Clinic, which serves 11 northern counties. “As a result, they would not only lose the services and peace of mind that insurance provides, but would also delay care and enter the health care system in ways that increase costs for taxpayers.”
While Wisconsin is one of 34 states that rely on the federal marketplace and could be adversely affected by a decision restricting eligibility for subsidies, our state has more at stake than most others:
- The average premium tax credit in Wisconsin is $315 per month, which is the 8th highest nationally (among the 34 states relying on the federal marketplace) and almost 16% above the national average of $272.
- Wisconsin also has the 8th highest percentage of participants in the federal marketplace who are receiving premium tax credits and the 11th highest number of people receiving the credits.
- Without the federal subsidies, the cost of marketplace plans would grow by an average of 252% in Wisconsin.
One reason why Wisconsin has more riding on the decision is because state lawmakers ended BadgerCare eligibility last year for about 63,000 people, and many of those people now rely on marketplace plans and the premium tax credits. That makes it especially important for Wisconsin policymakers to take remedial action if the subsidies are limited to people who purchase their coverage through a state marketplace.
One option is for our state to develop its own insurance exchange and use the federal marketplace as a technical hub that performs certain key functions on behalf of the new state insurance market. This approach was recently approved for Pennsylvania and Delaware, which have taken steps to be ready to use the federal government’s information technology system to support application and enrollment functions for state-based marketplaces.
The new WCCF report can be found here.