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Wisconsin Healthcare Reform Report


Email Alert

by Julie Rusczek and Christina Severin*

December 5, 2008

Wisconsin is a state with an eye on comprehensive healthcare reform. Proposals have recently been offered by Democratic and Republican lawmakers, the Governor, and the Department of Health Services. This will likely be an active year for healthcare reform on both the state and national levels, and Wisconsin lawmakers seem to have major changes in mind for the way healthcare is provided in the state.

The Push for "Comprehensive Healthcare Reform"

Governor Jim Doyle, the Wisconsin Department of Health Services, and other state leaders have been active recently in working to expand healthcare coverage options in Wisconsin. Currently, a three-phase plan for healthcare reform is underway, and changes have already been implemented in two of the three areas.1

Phase one was the expansion of healthcare for children, known as BadgerCare Plus.2 Launched on February 1, 2008, the program sought to streamline the eligibility process and increase access for children and pregnant women, as well as eligible parents and caretaker relatives. While there are still income restrictions tied to the Federal Poverty Line (FPL) for adults, all uninsured children are eligible for coverage regardless of income. This expansion also emphasized the importance of preventative care and healthy behaviors. In this vein, the state has awarded grants to six health plans serving the program that would provide incentive programs to improve the health of BadgerCare Plus members. These programs will address issues such as childhood obesity, birth outcomes, and blood lead screening, and will run through early 2010.

Phase two calls for a further extension of the BadgerCare Plus program through the use of a Medicaid waiver.3 This proposed expansion would allow eligible childless adults access to basic health services, including primary and preventative care. Coverage would be available through the managed care plans serving the Medicaid and BadgerCare Plus population. Additional coverage options could also be purchased by employers or certain public entities that sought greater coverage options for members. Further, the proposal would replace the General Assistance Medical Programs, which are county programs that provide limited primary care services and hospital inpatient reimbursement to low-income individuals.

On October 31, 2008, the Governor's office announced that while an agreement was reached "in principle," the state and federal government were still working to finalize the waiver.4 Once finalized, the state will be able to use federal funds that had been supporting uncompensated care to provide coverage for eligible adults. The Governor also noted that the current national economic conditions and the state's fiscal difficulties may make it difficult for the state to expand the program as planned. Reportedly, the program will cost the state an estimated $40 million per year, with the remaining funding coming from the federal government.5 Additionally, the agreement limits the amount the state can spend at approximately $154 million.

Phase three—affordable health insurance options for small businesses—is the final step toward the goal of comprehensive healthcare reform. When the upcoming budget is introduced, many eyes will be focusing on how this phase and the BadgerCare Plus expansion, may be funded.

Recent Legislative Activity

The 2007-2008 legislative session included several proposals related to healthcare reform. Two of the most prominent proposals are summarized below.

Healthy Wisconsin—Proposed by the Wisconsin Senate Democrats

The Healthy Wisconsin plan was introduced twice by the Democratic leadership in the Wisconsin State Senate during the 2007-2008 legislative session. Under the plan, a statewide universal healthcare program would replace private health insurance for most Wisconsin citizens. The plan would create a public board that would establish, fund, and administer a healthcare system and more specifically, solicit bids for a stated healthcare benefits package. Participants would choose among the healthcare network options submitted and would also have a fee-for-service option. If a participant chose the healthcare network that submitted the lowest bid, he/she would pay no charges for coverage; if the participant enrolled in a network other than the lowest bidder, he/she would pay the difference between the lowest bid and the cost of the chosen network. Services provided to adults would be subject to co-pays and deductibles. Healthy Wisconsin would be funded through payroll taxes paid by both employers and workers, and was estimated to cost $15 billion. Healthy Wisconsin did not pass in the 2007-2008 legislative session.

Some Senate Democrats have indicated that they will try to revive Healthy Wisconsin in the coming legislative session, in which Democrats will control both houses of the legislature and the governor's office. However, Doyle has indicated that he opposes any move to restart Healthy Wisconsin, believing that Wisconsin should wait for President-Elect Barack Obama and Democratic leaders of Congress to reform the nation's healthcare system.6

Patients First—Proposed by Wisconsin Assembly Republicans

In the 2007-2008 legislative session, Assembly Republicans proposed a healthcare reform agenda dubbed "Patients First." The agenda included several market-based reforms focused on encouraging more consumer involvement in the healthcare decision-making process, such as:

  • Removing the state tax on Health Savings Account contributions;
  • Expanding tax-deductibility of health insurance premiums;
  • Providing tax credits for employers to implement and expand workplace wellness programs; and
  • Creating tax credits for healthcare providers for the purchase of certain information technology equipment.

Of these proposals, only the last was included in the final budget bill enacted in October 2007.

As noted above, Wisconsin's lawmakers have been very active in the healthcare reform arena, and the 2009-2010 legislative session will likely bring more of the same energy and focus. Stay tuned for updates throughout the year.

1 The three-phase approach, which forms the basis for much of this discussion, is available in Wisconsin-BadgerCare Plus for Childless Adults Draft Waiver Proposal.
2 See for details. See also
3 See i, supra.
4 Governor Doyle Announces Agreement with Federal Government to Offer Health Care to Childless Adults, NEWS RELEASE, Oct. 31, 2008.
5 See Plan Would Expand BadgerCare to Adults Without Children, MILWAUKEE JOURNAL SENTINEL, Oct. 31, 2008, for details of the agreement.
6 State Senate Democrats Will Try to Revive Universal Health Care Plan, But Gov. Doyle, Others Don't Support It, MILWAUKEE JOURNAL SENTINEL, Nov. 12, 2008.

*We would like to thank Julie Rusczek, Esquire (Drinker Biddle & Reath LLP, Milwaukee, WI) and Christina Severin, Esquire (Hall Render Killian Heath & Lyman, Milwaukee, WI) for providing this summary.

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