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January 2007

New Coverage Proposals from Wisconsin and Indiana

Wisconsin: The rising cost of health insurance and the uninsured will feature significantly in the current Wisconsin legislative session. Starting with his State of the State address in 2006, Governor Jim Doyle (D) has pressed forward with several related proposals to expand coverage. Governor Doyle also created the Healthy Wisconsin Council in July 2006 to develop policy options to significantly reduce the uninsured in the state. The Council released its final recommendations in January 2007 and many of the solutions proposed by the Council concur with Governor Doyle’s health policy vision.

BadgerCare Plus: Building on the success of Wisconsin’s BadgerCare Program, an SCHIP program that covers children and parents to 185 percent FPL, Governor Doyle has proposed BadgerCare Plus to merge Family Medicaid, BadgerCare, and Healthy Start to cover the following populations:

  • All children: Currently, BadgerCare covers children up to 185 percent of the federal poverty level (FPL); the new proposal would expand benefits above the previous income ceiling and create a sliding scale so all children would have access to insurance; 
  • Pregnant women eligibility increases from 185 to 300 percent FPL; 
  • Parents and caretaker relatives covered up to 200 percent FPL;
  • Youth (ages 18-20) aging out of foster care regardless of income;
  • Parents with children in foster care up to 200 percent FPL; and
  • Farmers and other self-employed parents up to 200 percent FPL.

Simplification is a key component of the proposal. BadgerCare Plus would simplify eligibility by switching to a gross income test with two deductions, utilizing presumptive eligibility for certain children and pregnant women, and replacing the current multitude of coverage groups with only three groups: children, pregnant women, and adults.

Covered populations, who earn less than 200 percent FPL, would receive the current Medicaid benefit package. For those individuals who earn above 200 percent FPL, the state would develop a benchmark plan based on the largest, low-cost, commercial plan available in the state plus additional wrap-around benefits such as early childhood development services. Premiums and co-pays would apply for some populations subject to the 5 percent of family income rule.

Healthy Wisconsin: Like many other states, Wisconsin’s employer-sponsored insurance (ESI) rate has dropped. In 2001, 76 percent of Wisconsin residents received insurance through their employers but, by 2004, that figure had declined to 69 percent. The drop in ESI has been particularly acute for firms that employ less than 50 workers. To attempt to stabilize the small group market, Healthy Wisconsin Council has recommended establishing a state-subsidized reinsurance pool for the entire small group market and health insurance purchasing cooperatives but target the subsidy to the smallest low-wage firms. In addition, the Council has recommended expanding Medicaid to cover childless adults up to 200 percent FPL.

Comprehensive Reform: The Healthy Wisconsin Council also recognized that recommendations for important incremental steps should serve as building blocks for future reforms. As such, their final recommendation was to urge the Governor to adopt a comprehensive health care reform to provide broad coverage and lower health care costs.

Indiana: In November 2006, Governor Mitchell Daniels Jr. (R) unveiled a coverage expansion proposal that would provide insurance for approximately 350,000 potentially-eligible residents and attempt to improve the health of all Hoosiers by reducing tobacco use and increase immunizations rates for children.

The governor’s plan would provide coverage utilizing the Health Savings Account model combined with catastrophic insurance coverage above the deductible. Individuals would annually receive $500 of pre-deductible free preventive care and have a $1,100 deductible. All participants will have a POWER (Personal Wellness Responsibility) Account established in their name. The account will contain the monthly contributions made by participants in addition to a State contribution for a combined total of $1,100 per adult. The State's contribution will vary according to a sliding scale based on a participant's financial ability to contribute to the account. The State will subsidize the account to ensure there is a total of $1,100 per adult in the account. Participants will contribute no more than 5 percent of their gross family income, and will not have any cost sharing once the deductible is met. At the end of the year, participants can have access to funds over $500 in their account, provided they have received their age-, gender- and disease-specific preventative services.  Balances under $500 would be used to offset the following year’s contribution. The reasoning behind allowing individuals to access funding in their account is to create an incentive for them to utilize services in a cost-conscious manner.

Covered services include physician services, prescriptions, diagnostic exams, disease management, home health services, and inpatient and outpatient hospital eservices. There is a $300,000 annual limit on coverage.

The target populations for the new coverage expansion include:

  • Pregnant women up to 200 percent FPL
  • Parents increased from 23 percent FPL up to 200 percent FPL
  • Childless Adults from 100 to 200 percent FPL (childless adults are currently not covered at all)

Pregnant women will be covered in the traditional Medicaid program and will not have a POWER Account.

All recipients must be uninsured for at least six months, be a U.S. citizen, be a resident of Indiana for at least six months, and not have access to employer-sponsored insurance. If a person voluntary drops the program, or does not make payment within 30 days, they become ineligible for the program for 18 months.

The State will contract with private insurance companies to administer the program. High-risk individuals will be identified through the enrollment process and will be placed in the State’s high risk pool. The individual will receive enhanced benefits and disease management services but will still only pay 5 percent of their income.