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Healthcare MI Research

October 8, 2018 | By M.D. Kittle and Chris Rochester

Single Payer Health Care Takeover Would Cost Wisconsin Taxpayers $30 Billion In First Year Alone

There has been much discussion of late about universal health care. Liberals nationwide, including high profile Democrats in Wisconsin, have been extolling the virtues of a single-payer health care system. U.S. Sen. Tammy Baldwin has eagerly endorsed her Senate colleague Bernie Sanders’ (I-Vt.) Medicare For All Plan. The Madison Democrat has insisted that public policy goal “must be universal health care coverage for everyone.” Former state Rep. Kelda Roys (D-Madison), who this year ran for governor declared, “Ultimately I would prefer to see a comprehensive, affordable universal single payer system …” State. Rep. Chris Taylor (D-Madison), who earlier this year proposed a number of amendments to the state constitution, has said she favors a “single payer system to take the profit out of health care …”

But what would such a government-run system cost taxpayers in Wisconsin? The MacIver Institute attempts to answer that most important question – a question the mainstream media has all but ignored – in an analysis of a Medicaid-for-all model pitched by some Badger State liberals. Spoiler Alert: It would be tremendously expensive to implement.

Should liberals take Wisconsin to a single-payer, government-run health care system, taxpayers would face $30.2 billion in additional costs in the first year alone. The low-end estimate is drawn from data obtained from the federal Centers for Medicare and Medicaid Services, presented in the following tables for your review. MacIver’s analysis arrives at the hefty figure by calculating government and private sector health care spending in Wisconsin, at $64.069 billion for 2019. Then, MacIver subtracted the costs of existing government-run programs, at $26.733 billion, already paid for by taxpayers. The final number of $30.288 billion is the new taxpayer obligation for a government takeover of Wisconsin health care in the first year. At $30.2 billion in 2019, universal health care would nearly double the state’s annual budget, drastically increasing taxes. The cost rises each year thereafter. MacIver’s analysis includes the government administration savings that single-payer advocates assert would be realized under government control.

May 3, 2018 | By M.D. Kittle

Johnson Seeks Answers On Medicaid 'Skimming' By Unions

U.S. Sen. Ron Johnson wants answers about what many see as a $200 million, taxpayer-funded scam designed to fatten big labor’s wallet.

In a letter this week to the Centers for Medicare and Medicaid Services (CMS), the Oshkosh Republican is demanding information about the practice of government employee unions “skimming” federal dollars from Medicaid beneficiaries before the payments reach the intended recipients.

Many of those being skimmed are home health care workers, classified by some states as “government workers” despite a U.S. Supreme Court decision that union dues cannot be collected without the recipients’ consent.

Unions such as SEIU and AFSCME in 11 states successfully pushed changes designating home care aides as public employees. The classification brought the workers – whether they wanted to or not – into the union fold.

“In 2016, American taxpayers spent $565.5 billion on the Medicaid program,” Johnson, chairman of the Senate Committee on Homeland Security and Governmental Affairs, wrote in the letter to CMS Administrator Seema Verma.

“Although this funding is intended to help low-income families and the disabled, eleven states allow unions to classify personal home health care workers—including family caregivers—as government employees for the purposes of collecting union dues,” Johnson added. “This classification allows states to skim an estimated $200 million each year in union dues—taxpayer money that would otherwise go to the care of Medicaid recipients.”

Johnson’s committee is looking into the rising costs of Medicaid programs.

In his letter, the senator notes that federal Medicaid law prohibits payments for care to any entity other than the individual providing the care.

“In addition, in 2014, the Supreme Court held that states may not collect union dues from home health care providers without their consent,” Johnson wrote, referring to the court’s Harris v. Quinn ruling, which established “partial-public employees” could not be forced to pay union dues against their will. “Even so, some home health care workers say that unions have been skimming dues without their consent.”

In January, Rep. Cathy McMorris-Rodgers (R-Wash.) announced plans to introduce a bill that would end the siphoning of tax dollars to unions.

Unions such as SEIU and AFSCME in Washington and 10 other states successfully pushed changes to laws, designating home care aides as public employees. The classification brought the workers – whether they wanted to or not – into the union fold. States then began withholding union dues from the workers’ paychecks.

“Before 2014, most home caregivers in these states were required to pay union dues as a condition of participating in their state’s home care program,” the Freedom Foundation noted in a January release reporting on McMorris-Rodgers’ legislation.

“This classification allows states to skim an estimated $200 million each year in union dues—taxpayer money that would otherwise go to the care of Medicaid recipients,” wrote Sen. Ron Johnson in the letter.

Still, the labor groups and their liberal political allies, whose left-wing agendas are financially supported by union dues, found ways to get around the high court’s decision, allowing the shakedown in many cases to continue.

“In Washington, for instance, newly hired individual providers (IPs) must sit through two captive-audience meetings with union organizers as part of their initial orientation and training during which they are pressured into signing union membership forms. The fine print on these membership forms makes it very difficult for the signer to ever cancel the dues deductions from their pay,” the Freedom Foundation notes.

“Even if a caregiver never signs a union membership form, however, the state will still deduct full union dues — 3.2 percent of wages — from the IP’s pay automatically. Objecting IPs, if they notice the deductions, must demand in writing the deductions be stopped.”

Johnson is asking CMS to review the “skimming” practice and “determine whether changes to law or regulation (at the federal level) are necessary to ensure the Medicaid funds are provided to the program’s intended beneficiaries.”

The Senator wants CMS to explain what actions it is taking to prevent states from “skimming” union dues from Medicaid payments without the consent of the home health care provider. And he asks the agency to provide the amount of Medicaid funds, since Fiscal Year 2009, intended for home health care workers that states have diverted for union dues.

“Please respond as soon as possible but no later than 5:00 p.m. on May 14, 2018, so that the Committee may begin to receive responsive material,” Johnson states in his letter.

April 19, 2018 | By Chris Rochester

Walker Reinsurance Waiver Request Submitted to Feds

Gov. Scott Walker’s request to implement a reinsurance program to stave off another round of massive premium increases under Obamacare is now in the hands of the federal government, Walker announced on Wednesday. State officials expect the plan, submitted late Wednesday to the U.S. Department of Health and Human Services, to be approved quickly.

“We feel very, very positive about our ability to get an approval, and to get it on a timely basis so that we can have a positive impact for people, for small business owners, for family farmers and others on the individual market,” Walker told reporters on a conference call Wednesday.

According to OCI data, insurers have lost a staggering $400 million in Wisconsin’s individual market in just the last three years.

“We believe if we’re given approval under the federal government and under the waiver, we believe that premiums will be reduced by 10.6 percent from the level (of increase) that otherwise would’ve occurred,” Walker said.

That reduction means administration officials expect individual market premiums will drop by 5 percent in 2019 compared with real-dollar rates in 2018 as a result of the reinsurance.

The $200 million reinsurance plan will help insurance companies cover most of the cost of claims that fall within a certain range and is intended to prevent another massive price spike, like the 36 percent increase Wisconsinites on the individual market were projected to endure headed into 2018.

But the 36 percent projection jumped to 44 percent now that the data on who actually enrolled in 2018 is available.

Under Walker’s plan, the state will cover up to 80 percent of private insurance companies’ claims that fall between $50,000 and $250,000. Walker administration officials say this would create an incentive for insurers to hold costs to below that upper limit.

But the plan will still cost taxpayers a lot of money – the full cost is projected to be $200 million per year, with $34 million coming from state coffers and $166 million coming from the feds. The $34 million state portion, down from an initial projection of $50 million, will be paid for by savings in the state’s behemoth Medical Assistance program, officials say.

The waiver seeks permission to run the reinsurance program for five years.

Obamacare has made a mess of the individual insurance market in Wisconsin and across the country. In 2018, premiums on the individual market spiked by 36 percent in Wisconsin. The year before, the increase was nearly 16 percent.

Insurance companies are also fleeing the market in droves, forcing 75,000 Wisconsinites off their plans in 2018 alone. According to OCI data, insurers have lost a staggering $400 million in Wisconsin’s individual market in just the last three years.

As a result, some of the largest insurers in the state and nation – Aetna, Humana, UnitedHealth, Anthem, and Molina – stopped offering plans on the Obamacare exchange in Wisconsin in the past year. Wisconsin’s Obamacare market lost an average of 1.39 insurers per county from 2016-2017 according to a MacIver Institute analysis, and in a growing swath of the state only one insurer is still in the market.

The decline has been particularly harsh in and around Brown County in northeastern Wisconsin, where a robust individual market has deteriorated to the point where only one insurer – taxpayer-subsidized Common Ground Health Cooperative – remains. Left with no competition, Common Ground raised its premiums for 2018 by an astounding 63 percent.

Walker’s reinsurance plan aims to prevent the complete collapse of those markets, thrown into turmoil by Obamacare, like individual markets across the country. According to the Centers for Medicare and Medicaid Services, 1,565 counties nationwide have just one insurance carrier, more than 51 percent of all counties.

The Walker administration is optimistic that the reinsurance program, if approved, will not just drive down premiums but stabilize the dwindling market, which has been beset by an imbalanced risk pool as younger, healthier, and less expensive people opt to go without the costly coverage.

“More plans will get in…By helping offset that risk pool with the reinsurance, that not only drives premiums down, it makes it more plausible for insurers, particularly those that were here before, to re-enter the marketplace,” Walker said.

The waiver request was made under a little-known provision of the Obamacare law called a “Section 1332” State Innovation Waiver. The process allows states to make changes to their insurance market provided the waiver:

  • Provides coverage that’s at least as comprehensive as current insurance coverage
  • Will cover a comparable number of people
  • Does not increase the federal deficit
“Our goal, really, is simple,” Walker said. “It’s lower premiums, more choices, and more stability in health care in Wisconsin.”

At least 24 states were considering implementing State Innovation Waivers as of December 2017, according to the state Office of the Commissioner of Insurance. Alaska, Minnesota and Oregon all received federal permission for similar programs.

While the Walker administration is taking steps to keep sickly individual markets alive for the 200,000 Wisconsinites on the individual insurance market in the short term, Attorney General Brad Schimel in February sued the Trump administration in an effort to dismantle the source of the instability, the Obamacare law.

The 20-state lawsuit, led by Schimel and Texas AG Ken Paxton, alleges that Obamacare is unconstitutional now that the law’s individual tax penalty has been repealed as part of the Tax Cuts And Jobs Act, which Trump signed into law in December.

The U.S. Supreme Court upheld Obamacare in 2012 on the constitutionally shaky notion that the law’s individual mandate and associated fine for going uninsured was actually a tax, which Congress has the power to lay and collect. But the Republican tax overhaul repealed the Obamacare penalty, a deeply unpopular fine paid by individuals who in many cases can’t afford insurance coverage.

The new lawsuit contends that since the high court’s 2012 ruling in favor of Obamacare hinges on the individual mandate being defined as a tax, then the individual mandate is unconstitutional now that the tax is gone. Since there is no “severability” clause in the law, striking down the individual mandate would invalidate the entire law, the states argue.

The lawsuit – and the reinsurance plan – are the result of congressional Republicans’ failure to pass an Obamacare repeal and replace plan. While one version of that, the American Health Care Act, passed the House last year, it failed in the Senate.

“We got close, we got the governors behind a variation of that (AHCA) plan. We thought we were close to getting it done, it didn’t happen. Washington has failed to act, Wisconsin needs to lead,” Walker said.

February 9, 2018 | Rep. Joe Sanfelippo

Direct Primary Care: The Doctor Will See You Now

Americans across the country have discovered that the Affordable Care Act has been anything but affordable.

Many Americans and businesses are struggling financially to pay for healthcare. At the same time, the primary care experience has declined in quality for both patients and providers. Patients have seen their access to primary care decline, for many reasons. With the trend towards specialization among medical professionals, the percentage of primary care physicians has dropped significantly in recent years. This is also part of the reason that average wait times for initial visits to family physicians in major cities have increased from 20.3 days in 2009 to 29.3 days in 2017. In mid-size cities, that wait climbs to over 54 days. As more people are forced into high-deductible health plans, many patients can’t afford to pay for visits or take the time off of work to get to their doctors, even when they can schedule an appointment.

In typical insurance-paid practices, doctors spend roughly 50% of their time dealing with procedure coding and insurance requirements.

Doctors don’t like this trend, either. In typical insurance-paid practices, doctors spend roughly 50 percent of their time dealing with procedure coding and insurance requirements, and need expensive administrative staffs to help manage complex billing and records systems. The result is that doctors need to see more patients to achieve profitability, which means less time with each patient.

Many doctors, frustrated with this experience, have begun shifting to a new business model known as direct primary care, or DPC. Under a direct primary care model, which is not health insurance, patients pay a low monthly fee, typically between $50 and $100, depending on age, with no further co-pays or deductibles. For that fee, they receive unlimited 24/7 access to their primary care doctor. Because doctors have a fraction of the administrative costs as under a managed-care model, they can spend more time with patients: whereas under a managed-care model, doctors see their patients for an average of 8 minutes, DPC visits average 35 minutes in length, and often go much longer. This extra time allows doctors to get to know their patients better and provide more accurate diagnoses. And because DPC doctors typically accept roughly 500 active patients compared with 2,500 in traditional practices, doctors are available to their patients 24/7, whether for same- or next-day appointments, phone calls, or even house visits. Switching to a DPC model can save a doctor as much as 40 percent on their administrative costs by freeing them of insurance billing requirements.

Under direct primary care, patients receive better healthcare for less money.

Under direct primary care, patients receive better healthcare for less money. While over 80 percent of a person’s healthcare can be provided in a primary care setting, DPC patients still carry catastrophic insurance for coverage should they experience a serious illness. However, because they receive more regular and in-depth preventative care, patients under a DPC model experience better healthcare outcomes. This translates to massive cost savings. Hospital costs for potentially-preventable conditions (those that statistically respond well to increased primary care) represent roughly $30 billion annually, or 10% of all hospital expenditures. DPC patients are 52% less likely to require hospitalization than patients under a traditional model. If we can even marginally reduce the 4.4 million annual potentially-preventable hospital stays, we can make a revolutionary impact on our healthcare problem.

That’s why Senator Chris Kapenga and I have been working on legislation to formally codify and regulate direct primary care in Wisconsin. There are already a growing number of successful DPC clinics in the state, like Solstice Health in New Berlin and Dr. Suzanne Gehl in Delafield, and we want to build consumer confidence in the DPC model by formally regulating these clinics. We’ve crafted this legislation by working closely with the Department of Health Services, as well as healthcare providers throughout the state, and have the full support of Wisconsin doctors through the Wisconsin Academy of Family Physicians.

There’s been a six-fold increase in DPC clinics in the United States since 2014, with about 3 percent of doctors nationally practicing under this model. So far, twenty-three other states have direct primary care defined in their laws, including other Midwestern states like Indiana and Michigan. Recently, the federal Department of Health and Human Services announced that they will be working with states this year to incorporate direct primary care into their Medicaid programs. That’s why this legislation also directs DHS to study how we can best incorporate direct primary care into our own Medicaid system, and to craft a pilot program that we hope to implement as soon as next year.

Direct primary care is one of the most promising solutions towards tangibly improving patient access to healthcare, achieving better patient outcomes, and realizing tremendous cost savings.

Direct primary care is one of the most promising solutions towards tangibly improving patient access to healthcare, achieving better patient outcomes, and realizing tremendous cost savings. I hope that legislative Democrats join us in providing Wisconsinites with more affordable healthcare options. There’s incredible momentum behind direct primary care at the state and national levels, and we need to be sure to capitalize on this opportunity to keep Wisconsin at the forefront of healthcare innovation.

Rep. Joe Sanfelippo (R-New Berlin) represents Wisconsin’s 15th Assembly District.

March 14, 2018 | By Chris Rochester

Dental Therapy: A Simple, Cost-Effective Way to Ease the Shortage of Dental Care in Wisconsin

The following op-ed was published in the La Crosse Tribune.

Dental health is about much more than a bright white smile, it’s a critical part of maintaining your health and well-being. Unfortunately, there is a serious shortage of dental providers in Wisconsin that impacts the health of everyone from children in preschool to our grandparents in nursing homes. To help address this shortage, Wisconsin should look to the free market.

Strict licensure requirements combined with a general shortage of dental providers and geographic factors have created this shortage of dental care. The problem is particularly acute in areas with higher populations of low-income and minority individuals and in rural areas, as outlined in a recent report by the MacIver Institute.

Accessing dental care is a bigger challenge than many of us know. Sixty-five of Wisconsin’s 72 counties contain at least one dental care shortage area as defined by the federal government. Approximately 1.5 million people in Wisconsin live in rural areas, where dental care is simply further away from the patient and harder to get to.

Among adults living in nursing homes in Wisconsin, 42 percent had untreated tooth decay, but only 52 percent reported visiting a dentist in the past year.

The consequences of this shortage go beyond just the cosmetic – dental health is critical to a person’s overall health. Unfortunately even routine dental care is out of reach for far too many. Among adults living in nursing homes in Wisconsin, 42 percent had untreated tooth decay, but only 52 percent reported visiting a dentist in the past year.

Lack of dental care for children is of equal concern. More than 550,000 Wisconsin children were eligible for Medicaid for 90 continuous days in 2016, according to the federal Centers for Medicare and Medicaid Services. However, only 42 percent of these children received any dental or oral health services during the prior year. In addition, a 2014 Department of Health Services survey of oral health among Wisconsin Head Start children found that 41 percent of them had experienced tooth decay, 23 percent had untreated tooth decay, and 20 percent had early childhood tooth decay.

Unsurprisingly, lower income Wisconsinites have the most acute problem getting needed dental care. Among adults earning less than $25,000 per year who had not visited a dentist in the past year, 42 percent cited trouble finding a dentist as a reason, and 42 percent cited inconvenient time or location in a 2015 American Dental Association study.

Our research shows that easing regulations and allowing more dental professionals – dental therapists – to conduct routine dental work is a pragmatic and sensible solution to Wisconsin’s dental shortage.

Dental therapists are mid-level dental practitioners, similar to nurse practitioners or physician assistants in medicine. Under the general supervision of a dentist, dental therapists can perform a wider range of routine procedures than a dental hygienist, including drilling, filling cavities, and performing nonsurgical extractions.

Further, the dentist is not required to look over the shoulder of dental therapists under their supervision, enabling dental therapists to travel to satellite sites away from the dental practice to perform basic care. Satellite sites might include rural satellite clinics, nursing homes, schools, facilities for people with disabilities, and other places where people would benefit from dental care coming to them instead of them traveling for dental care.

For proof of the effectiveness and safety of dental therapy, we can look to Minnesota, where dental therapy is flourishing in rural and underserved areas.

In other words, dental therapists could travel to the places where routine dental care is needed most.

Dental therapists are capable, educated professionals. They must complete an educational program at a nationally accredited program, pass state exams, and obtain a state license to practice. For proof of the effectiveness and safety of dental therapy, we can look to Minnesota, where dental therapy is flourishing in rural and underserved areas.

“There are literally counties in Minnesota that didn’t even have a dentist. No one (in those areas) had access to dental care,” said Christy Jo Fogarty, an advanced dental therapist in Minnesota and the first graduate of the dental therapy program at the University of Minnesota. “Now we have dentists who are hiring dental therapists in those rural areas.”

As our research has shown, a variety of factors are causing a growing shortage of dental care in Wisconsin, and the impact is being felt by all. Wisconsinites need more and better access to quality dental care. If Wisconsin began licensing dental therapists, it would help to alleviate this crisis.

January 30, 2018 | By Abby Streu

MacIver Institute Submits Ideas to Trump Administration on Ways to Encourage Healthcare Competition and Lower Prices

While it will take time to get there, American healthcare may soon see enough deregulation to slow or reverse skyrocketing costs in the era of Obamacare. The Department of Health and Human Services (HHS) recently issued a Request for Information promoting health care choice and competition across the United States. In response, a group of 45 free market activists and think tanks across America, including the MacIver Institute, joined together in laying out how the Trump administration can accomplish this.

Last week, the coalition submitted a letter to HHS proposing eight ways the Trump administration can encourage true competition in the health care industry – which will drive down the cost of healthcare.

If the industry is deregulated, increased freedom of choice in the health care marketplace will reduce the cost of health insurance and health care for American families. Even before the Patient Protection and Affordable Care Act (PPACA), also known as Obamacare, the health care industry in the United States was heavily regulated. Adding to that burden, the PPACA imposed numerous new requirements on businesses, insurers and citizens. Stifling regulations decrease the amount of competition and choice in the marketplace, keeping costs high. Between 2013 and 2017, the PPACA more than doubled health care premiums on the individual market.

The first proposal in the letter is for HHS to “let states define their own essential health benefits” – one of Obamacare’s most onerous regulatory burdens. Under Obamacare, the Department laid out four separate benchmarks of essential benefits that states must adopt. This one-size fits all mandate handcuffs states, driving up the cost of health care and eliminating many low-cost insurance options. People in Wisconsin may have very different healthcare needs compared to the people of Florida. To that end, the letter suggests that state governments be allowed to determine their own essential health benefits without interference from the federal government.

Another idea in the letter proposes that the Department “provide faster approval for Medicaid state plan amendments and waivers that implement other states’ successes.” Increased explanations and clarity on how the federal Department will evaluate waivers will aid states. This can be done by providing approval for plans that have already been successful in other states, which would increase efficiency and provide more choices to citizens.

Read the full letter here.

February 14, 2018 | By Chris Rochester and Jennifer Minjarez

Policy Brief: Dental Therapy in Wisconsin

A simple, cost-effective way to ease the shortage of dental care in Wisconsin

Download a PDF of this report here.

Introduction

Strict licensure requirements, a general shortage of dental providers, and geographic constraints are limiting access to critical dental care in Wisconsin. In fact, 65 of Wisconsin’s 72 counties have at least one area that qualifies as experiencing a shortage of dental providers. The problem is particularly acute in areas with higher populations of low-income and minority individuals. Our research shows that easing regulations and allowing more dental professionals to conduct routine dental work, under the supervision of a licensed dentist, is a pragmatic and sensible solution to Wisconsin’s dental shortage.

If Wisconsin allowed the practice of dental therapy, there would be more access to important dental care. Dental therapists are mid-level dental practitioners, similar to nurse practitioners or physician assistants in medicine. Under general supervision of a dentist, dental therapists can perform a wider range of routine procedures than a dental hygienist, including drilling, filling cavities, and performing nonsurgical extractions.

The shortage of adequate dental providers means many people in Wisconsin are not getting the dental care they need.

The problem is particularly concerning where it involves children’s access to dental care. In 2016, more than 550,000 children (ages 1-18) had dental benefits through Medicaid in Wisconsin.

Sixty-five of Wisconsin's 72 countries have at least one area that qualifies as a dental shortage.

However, even though these children had dental coverage, the vast majority of them, 67 percent, received no dental care—the worst rate in the country.

Clearly, improving access to dental care is critical to making progress on health care issues in Wisconsin.

Oral Health In Wisconsin

Oral health plays a significant role in a person’s physical and mental wellbeing. In 2000, the Surgeon General released a report on oral health that featured evidence of association between oral infections and diabetes, heart disease, stroke, and adverse pregnancy outcomes (HHS, 109). Dental disease causes children to miss over 51 million hours of school each year, and adults lose over 164 million hours of work (2-3). Furthermore, oral conditions can negatively affect self-esteem. Twelve percent of Wisconsin adults report that the appearance of their teeth affects their ability to interview for a job (ADA).

Dental care is a lifelong necessity. Routine preventive care and healthy oral habits early on can prevent painful and costly dental disorders in the future.

The rate of dental disease and dental utilization among Wisconsinites gives us a better picture of oral health needs across the state.

In 2014, the Wisconsin Department of Health Services (DHS) published a survey of oral health among Wisconsin Head Start children, age three to five. It found that 41 percent of Head Start children had experienced tooth decay, 23 percent had untreated tooth decay, and 20 percent had early childhood tooth decay (DHS, 8).

The Head Start survey also showed that 69 percent of Asian children had experienced tooth decay, compared to 39 percent of Hispanic children, 38 percent of African-American children, and 36 percent of white children (11). African-American children had the highest rates of untreated tooth decay (28 percent), compared to 20 percent among white children.

More than 550,000 Wisconsin children were eligible for Medicaid for 90 continuous days in 2016, about 43 percent of all Wisconsin children (FY 2016 CMS-416). However, only 42 percent of these Medicaid children received any dental or oral health services during the year. Thirty-one percent received dental services from a dentist or practitioner under the supervision of a dentist, while 14 percent received oral health services from a non-dentist practitioner, such as a primary care provider.

The dental care picture for adults in Wisconsin is not much better. A DHS survey found that 15 percent of Wisconsin adults had untreated tooth decay, 17 percent had gum disease, and 16 percent needed treatment for oral decay, abscesses, or lesions (DHS, 10-14).

Oral health among adults varies widely across income groups, racial/ethnic groups, and groups with different levels of education. Twenty-nine percent of low-income adults, those earning less than $25,000 per year, had untreated decay, compared to 16 percent of adults in the next highest income group, earning $25,000 to $49,999 per year (12). Thirty-two percent of low-income adults needed dental care for decay, abscesses, or lesions, compared to 18 percent of adults in the next highest income group.

Among low-income adults who had not visited a dentist in the past 12 months (2015), 50 percent cited cost as a reason, 42 percent cited trouble finding a dentist as a reason, and 42 percent cited inconvenient time or location as a reason (ADA).

The DHS survey also found that “[African-Americans] were significantly twice as likely to have untreated decay and a need for dental care as whites…while racial/ethnic groups were also significantly more likely to report having oral health problems and difficulty gaining access to dental services” (4). Sixty percent of African-American adults reported having poor oral conditions, compared to 39 percent of Hispanic adults, and 23 percent of white adults (15).

Education was also associated with oral health. Thirty-nine percent of adults with less than a high school education had untreated tooth decay, and 42 percent needed treatment for decay, abscesses, or lesions. Only 20 percent of adults with a high school degree or equivalent had untreated decay, and 21 percent needed treatment (12).

According to the Wisconsin Oral Health Coalition (WOHC), “there are many special populations in the state with an increased disease burden that needs to be addressed, including: people with disabilities, long-term care residents, individuals with HIV/AIDS and those in the corrections system” (WOHC, 11). These populations tend to be more susceptible to dental disease and may have difficulty maintaining healthy oral habits at home.

For example, adults with disabilities had higher rates of untreated tooth decay and were more likely to report poor oral conditions than adults without disabilities (4). Forty-two percent of adults living in nursing homes had untreated tooth decay and only 52 percent reported visiting a dentist in the past year.

Wisconsinites are not receiving dental care early or regularly enough. Furthermore, the prevalence of socioeconomic disparities across all age groups suggests that the burden of oral disease is linked to access to care challenges. While certain populations have greater oral health needs than others, all Wisconsinites can benefit from better oral health strategies and plenty of dental care options.

Access to Dental Care in Wisconsin

One in five Wisconsin adults reported having a need for dental care and not getting it in 2015 (DHS, 14). A survey of those with unmet needs found the top three reasons for not receiving care were unaffordable costs (68 percent), inadequate insurance coverage (26 percent), and a lack of convenience getting care (23 percent). If policymakers want to increase access to dental care, they should consider market-based, supply-side reforms that address Wisconsinites’ top three barriers to getting care.

Costs

According to Dental Economics, “Since 1985, there has been a 279% increase in the cost of dental services,” far outpacing the growing cost of medical services and overall inflation.

Some of the most common dental procedures are fillings, root canals, extractions, and sealants. According to the American Dental Association’s (ADA) Survey of Dental Fees, an amalgam (metal) filling costs $130.16 on average in the East North Central Division, including Wisconsin, Illinois, Indiana, Michigan, and Ohio (ADA 2016, 34-45). Tooth-colored resin fillings costs $168.16, surgical extractions cost $264.04, and sealants cost $51.46 per tooth. These charges are expensive for Wisconsin families, and they add up fast for those who need multiple procedures at a time.

The cost of dental care is rapidly increasing from year to year. For example, the cost of molar root canals rose from $945.51 in 2013 to $995.92 in 2016, a $50 increase in only three years (ADA 2013, 34-45).

In a free market, service prices are determined by supply and demand, and competition puts constant downward pressure on costs. That is not always the case in dentistry. Wisconsin’s supply of dental care is constrained by the state dental practice act (Wisconsin Statutes Chapter 447) and licensure regulations (Wisconsin Administration Code Chapter DE). Under current law, dentists have a monopoly on performing the most needed dental procedures, such as fillings and extractions. Without competing delivery systems, there is no pressure on dentists to innovate or lower their charges. Dental care will continue to become less and less affordable until Wisconsin rolls back its licensure regulations, generates competition among providers, and allows them to adapt to Wisconsinites’ diverse needs.

Inadequate Insurance

Like the cost of dental services, the cost of dental insurance continues to rise. Private dental plan charges increased 10 percent for children and 7.7 percent for adults between 2003 and 2013—one of the highest overall increases in the country (ADA, 163). Dental coverage does not always translate into dental care. In 2013, 67 percent of children and 63 percent of adults with private dental plans visited a dentist. While these utilization rates were slightly higher than the national averages, they exhibited a decline in dental visits in Wisconsin since 2005.

Wisconsinites enrolled in public health insurance programs have even more difficulty accessing dental care. In addition to having limited coverage, they have narrow dental provider networks. Only 32 percent of Wisconsin dentists accept Medicaid or CHIP patients, compared to a national average of 38 percent (ADA). A DHS report on Wisconsin’s fee-for-service (FFS) Medicaid program shows that dentists’ participation rates are lower than other Medicaid provider types (DHS, 24).

Low participation rates among dentists likely contribute to low utilization rates among Medicaid enrollees. In 2016, more than 550,000 children received dental benefits through Medicaid, yet 67 percent received no dental care—the worst rate in the country (CMS).

Trouble Getting Care

Costs and inadequate insurance are not the only barriers to care. People who have coverage and can pay for dental services may have difficulty finding a provider, making a timely appointment, getting to the dental office, and maintaining regular visits. The shortage of dental care in Wisconsin stems from an inadequate network of providers and an over-regulated delivery system.

There are approximately 3,233 dentists in Wisconsin, or 56 dentists per 100,000 people (ADA). By the numbers, this seems like enough dentists to treat most Wisconsinites. In fact, a 2010 report commissioned by the Wisconsin Dental Association (WDA) asserts, “Wisconsin appears to have an adequate dental workforce to meet the current and future demand for dental services by the population that has high enough incomes and/or private dental insurance to purchase care in the private sector” (Beazoglou et al., 8). However, oral health outcomes and dental utilization rates indicate that millions of Wisconsinites in the private sector are not getting care. The reason for this is that care shortages are not simply driven by the number of providers relative to the state population. The type of providers available and how they are distributed across the state play a large role in determining when and where dental care is delivered.

According to the U.S. Department of Health and Human Services (HHS), there are 138 dental health professional shortage areas (HPSA) in the state of Wisconsin (HRSA). Dental HPSAs are geographic areas, populations, or facilities that are experiencing a shortage of dental practitioners. To qualify as a dental HPSA, a geographic area must comprise 5,000 or more people per single dental provider, a population must comprise 4,000 or more people per provider, and a facility must comprise 1,500 or more people per provider. While dental HPSAs paint an incomplete picture of the state’s dental care shortage, again because it is purely quantitative, it is a useful measure of provider distribution. Sixty-five of Wisconsin’s 72 counties have at least one area that qualifies as a dental shortage.

Supply is only half the story. For example, Wisconsin has a large rural population that can benefit from alternative dental provider options. One in four Wisconsinites live in rural areas, about 1.5 million people (RHIH). While the 2010 WDA report identified a quantitative surplus of dentists in rural areas, it also found that rural residents “are in poor oral health relative to people in the larger counties” (Beazoglou et al., 6). In other words, supply is not the only factor driving the provision of dental care. Rural areas tend to have lower income and higher percentages of people enrolled in public health insurance programs than urban areas (6). They could benefit from a provider model that brings care closer to them, instead of requiring them to visit a dental office, and that utilizes mid-level dental practitioners who have lower labor costs than dentists, creating the potential for lower-cost services.

By expanding access to basic dental care, dental therapy could also help reduce emergency room visits. In 2015, there were 41,387 emergency department visits in Wisconsin for which a preventable dental condition was the primary or secondary diagnosis (WHA, 5). In 33,113 of those visits, preventable dental conditions were the primary diagnosis. At an average cost of $749 per emergency visit, that amounts to $25 million in preventable hospital costs (ADA 2015, 1). Fifty-six percent of dental-related ER visits were paid for by Medicaid. Further, since ERs are not equipped to provide comprehensive dental care, patients leave with the same underlying problems they come in with.

Increasing access to dental care with dental therapists can also help reduce opioid prescriptions. From 2007-2010, 1.7 percent of all ER visits were for non-traumatic dental conditions (NTDCs), and 50.3 percent of NTDC visits resulted in an opioid prescription, compared to 14.8 percent of non-NTDC visits (Okunseri et. al, 2). Furthermore, the prescription of opioids was highest among patients aged 19-33 years. This is a problem the Wisconsin legislature has sought to address—2015 Wisconsin Act 269 asked the Dentistry Examining Board to issue guidelines regarding best practices in the prescription of controlled substances (DEB). Expanding access to basic dental care and preventing tooth decay could stave off the need for opioid pain medications.

What Are Dental Therapists?

Dental therapists are mid-level practitioners in the dental profession, much like a physician assistant or nurse practitioner in medicine. These professionals would be trained in much the same way as other similar professions. They would be trained according to national standards developed by the Commission on Dental Accreditation (CODA), the sole agency recognized by the U.S. Department of Education to accredit dental education programs. CODA accreditation indicates a program has achieved a nationally accepted level of safety and quality.

Dental therapy is relatively new to the United States, but has been practiced abroad since the 1920s (WKKF, 2). Six states have made room for the profession, and it is flourishing in rural and underserved areas of Minnesota, one of just three states that allow dental therapists to practice statewide.

Dental therapists operate under the general supervision of a licensed dentist, which means the dentist is not required to be on-site. This enables dental therapists to travel to satellite sites away from the dental practice to perform basic care. Satellite sites might include rural satellite clinics, nursing homes, schools, facilities for people with disabilities, and other places where people would benefit from dental care coming to them instead of them traveling for dental care. This would help to solve the problem of geographic disbursement of dental practices and licensed dentists in rural and underserved areas. Dental therapists could take advantage of telehealth technology to consult with their supervising dentist when needed, and dentists would be responsible for determining the scope of practice, within legal bounds, of the dental therapists under their supervision.

Many of the consequences of dental disease such as pain, missed school, and missed work are caused by untreated tooth decay. However, under state law only dentists are allowed to fill cavities. Creating a new level of dental provider with a wider scope of practice could increase the number of trained, licensed professionals able to fill cavities and perform many other routine procedures.

Authorizing the licensure of dental therapists would not involve the creation of new bureaucracy or significant expenses to taxpayers. The Dentistry Examining Board would simply be directed to grant dental therapist licenses to those who meet the criteria, which would include the successful completion of relevant educational programs and examinations.

Conclusion

As our research has shown, a variety of factors are causing a growing shortage of dental care in Wisconsin, and the impact is being felt by all. From the very young to our grandparents living in nursing homes, Wisconsinites need more and better access to quality dental care. If Wisconsin permitted dental therapists, it would help to alleviate this crisis.

January 15, 2018 | By Chris Rochester

Direct Primary Care Reform Could Save Taxpayers Hundreds of Millions – Or More

MADISON, Wis. – The Senate is considering a free-market reform to the state’s most costly program, Medicaid, that has the potential to save taxpayers hundreds of millions of dollars or more.

The Senate Committee on Public Benefits, Licensing and State-Federal Relations on Thursday heard testimony on a bill authorizing the Department of Health Services (DHS) to launch a direct primary care pilot program in BadgerCare, the state’s Medicaid program.

Direct primary care is a method of delivering health care in which patients pay their primary care doctors directly via a monthly fee, bypassing traditional health insurance that can obscure the actual costs of procedures. Since patients are paying cash, there’s significant downward pressure on prices.

“Medicaid spending has continued to balloon, accounting for almost 20 percent of our entire state budget, so it’s obviously an issue that we have,” said Sen. Chris Kapenga.

“Price transparency means patients see a significant savings with the DPC model. Some DPC providers are successfully delivering care resulting in savings of 15-30 percent,” the bill’s author, Sen. Chris Kapenga (R-Delafield), told the committee.

That kind of cost reduction means that implementing direct primary care into the state’s behemoth Medicaid program would be a taxpayer windfall.

“Medicaid spending has continued to balloon, accounting for almost 20 percent of our entire state budget, so it’s obviously an issue that we have,” Kapenga said. Total Medical Assistance payments in Wisconsin have soared from $4.7 billion in 2004 to nearly $9.2 billion in the 2016-17 fiscal year, according to the nonpartisan Legislative Fiscal Bureau.

Rep. Joe Sanfelippo, the author of a companion bill in the Assembly, says adding direct primary care to the Medicaid program could drive down costs by as much as 20 percent, potentially saving taxpayers hundreds of millions of dollars.

Or more. A similar pilot program in Michigan, if expanded to all the state’s 2.4 million Medicaid enrollees, could generate savings of up to $3.4 billion.

Kapenga compared the free-market model to a gym membership. Bypassing traditional insurance, patients in a direct primary care system pay a monthly membership fee directly to the doctor or clinic in exchange for virtually unlimited access to their primary care doctor, including many common medical services, tests, and exams.

Three doctors practicing the direct primary care model in Wisconsin said the bill would not only save taxpayer money, but improve health outcomes for those on the program.

“The first several months I was practicing in this model of healthcare, I was surprised by the number of people who came to see me who had not seen a physician in ten to 20 years,” Dr. Suzanne Gehl, a direct primary care physician in Delafield, told the committee. “We were diagnosing high blood pressure, diabetes, hypothyroidism, and cancer at unbelievable rates,” she said.

Once patients familiarize themselves with the direct primary care system, with its more personalized approach eschewing large hospitals and cumbersome health insurance paperwork, they quickly realize the benefits.

“The thing that amazed me is once you removed the barrier of cost and access, how quickly we were able to get these conditions under good control and help them navigate the healthcare system in a very efficient and cost saving manner,” Gehl said.

One source of savings is by cutting back on emergency room visits, which is often the go-to service for those on public assistance. “The culture across the spectrum is ‘go straight to the ER.’ That’s where most people get their primary care nowadays,” said Dr. Timothy Murray, CEO of Solstice Health.

Kapenga says the typical ER visit costs between $1,233 and $2,000 per visit, which is almost double what the typical DPC membership costs in a year.

Kapenga says the typical ER visit costs between $1,233 and $2,000 per visit, which is almost double what the typical DPC membership costs in a year. #wiright #wipolitics #DirectPrimaryCare CLICK TO TWEET

According to Sanfelippo, 80 percent of Medicaid patient illnesses could be treated by a primary care provider. Instead, many of the cases are being handled in the significantly more expensive emergency room.

According to Sanfelippo, 80 percent of Medicaid patient illnesses could be treated by a primary care provider. Instead, many of the cases are being handled in the significantly more expensive emergency room.

Even if relatively few Medicaid patients actually utilize direct primary care after it’s implemented, it will still yield savings, Murray said. Hard financials make that self-evident: the state spends $56 million annually on Medicaid recipients who use the ER more than seven times a year.

DPC also fosters a personal relationship between the doctor and patient, which will help change the culture of going to the ER instead of a primary care physician, Gehl said. Working at a traditional large hospital, Gehl handled 2,000 patients at any given time. Now she sees just a few hundred, which she says lets her spend more time with each person.

“We provide the access…I’ve seen the big systems, and I see what they can do right, and I see they struggle with providing that quick access for patients,” said Dr. Steve Bondow, a family physician in Milwaukee.

Gehl said physicians in direct primary care proactively reach out to patients encouraging them to get their annual exams, which are free at DPC clinics, and to steer them away from going to the ER in non-emergency cases.

Perhaps the most important advantage of direct primary care from the patients’ viewpoint is a personal relationship between the patient and their doctor, which is on the decline in the Obamacare era of hospital mergers and shrinking provider networks. Bondow said DPC’s main purpose is “restoring the doctor-patient relationship…that is our first goal in DPC. It just so happens that it’s cost effective also.”

With easier access to doctors, less paperwork, and a personalized approach free of health insurance dictates, it comes as little surprise that direct primary care arrangements often come with improved health outcomes. DPC patients have 35 percent fewer hospitalizations, 65 percent fewer emergency department visits, and 66 percent fewer specialist visits.

Twenty-three other states have passed similar legislation, defining direct primary care as a service, not a form of insurance, and thus outside the grasp of innovation-killing health insurance regulations.

November 15, 2017 | By Chris Rochester

Business Leaders Urge Congress to Repeal or Delay Health Insurance Tax Before End of Year

MADISON, Wis. – A federal health insurance tax set to take effect in 2018 will hit Wisconsin businesses, families, and taxpayers hard if congress doesn’t take action to stop or delay the tax before the end of the year.

Without action by Congress to delay or repeal the HIT, the tax is estimated to impact 156 million Americans starting next year.

The health insurance tax, or HIT, is a new federal tax on health insurance plans purchased by most small business owners, the self-employed, and farmers. All will suffer if congress lets the tax take effect, a group of Wisconsin business leaders said on Wednesday.

Without action by Congress to delay or repeal the HIT, the tax is estimated to impact 156 million Americans starting next year. Those earning an income between $10,000 and $50,000 per year will pay half of the tax, and a recent study by Oliver Wyman shows that families in the small employer market could be faced with an average of $577 in higher premiums in 2018 as a result of the HIT.

The HIT will add about 2-3 percent to fully insured health insurance plans in 2018 alone, a study by the National Federation of Independent Businesses found. The report states that nationwide, “Such price increases will reduce private sector employment by 152,000 to 286,000 jobs in 2023, with approximately 57 percent of those losses falling on small business.”

Suspended for 2017 in a broad bipartisan vote, congressional leaders planned to deal with the HIT as part of the broader effort to tackle healthcare, but those efforts fell through as congressional Republicans’ efforts to repeal and replace Obamacare failed earlier this year.

The HIT, tucked into the voluminous Obamacare legislation, “imposes fees on insurance companies that offer fully-insured health insurance coverage. The fees, which are treated as taxes under the Internal Revenue Code, are assessed on earned health insurance premiums, with certain exclusions,” the Oliver Wyman report states.

If Congress fails to repeal the tax by year’s end, the average American family can expect to see their health insurance premiums rise by more than $5,000 over the next decade.

Steve White, who owns a small manufacturing company in Genoa City, said the tax will hit his company hard. White has six people on his company’s small group health insurance plan. In recent years, the cost of providing insurance for them has gone up 56 percent. “Health insurance premiums, they’re not going anywhere but up,” the small business owner said.

The HIT will also weigh down on state coffers. In the BadgerCare program alone, the tax will add about $34 million in increased costs to taxpayers.

White said his company has felt the financial pinch of Obamacare’s broken promises. “We were promised something like a $2,500 decrease, but it’s actually swung in the opposite direction there.”

Even a relatively small savings would help his business stay afloat. “Every little bit helps. I’m definitely not sitting on some really big fat profit margins, so if it’s just a thousand dollars or two difference a year, it makes a big difference,” White said.

The HIT will especially hurt the state’s agriculture community, said Karen Gefvert, director of government relations for the Wisconsin Farm Bureau Federation, which is made up of more than 46,000 members statewide.

Farm income has recently dropped 46 percent, according to a 2017 USDA report, so the HIT would be especially hard for farmers to absorb. “Farmers are struggling right now. So during this time of depressed commodity prices, farmers are having a difficult time making ends meet,” Gefvert said.

Farmers are already paying a larger amount for their health insurance coverage because of the nature of their profession and the risks they face on the job. Not delaying the HIT would be an additional financial burden on farmers, Gefvert said.

“Delaying the HIT or repealing the HIT would definitely help ease just a little piece of the struggle they’re going through right now,” she said.

The HIT will also weigh down on state coffers. In the BadgerCare program alone, the tax will add about $34 million in increased costs to taxpayers. The HIT will also cost taxpayers additional money because it is maintaining a fully insured health insurance system for state employees and their dependents.

The tax will also apply to Medicare Advantage plans, which about half of Wisconsin senior citizens are on.

Seventy percent of businesses surveyed predicted higher deductibles, and half said cost increases would lead to higher out of pocket costs like co-insurance and co-pays.

Wisconsin already has high health care costs, and the HIT won’t help, said Chris Reader, director of health and human resources policy at Wisconsin Manufacturers and Commerce. The group represents 3,800 Wisconsin businesses in all industries.

Reader said WMC’s surveys of its members showed 92 percent provide health insurance for their employees, but those costs are going to go up. “A majority of people said they believe their healthcare costs will go up next year,” he said.

Reader said 1.2 million people are employed by 440,000 small businesses in Wisconsin.

Employers will also have to cut back in areas like research or training, and families will have to cut back, too. “Anything that will increase the cost is a negative to our members and the economy as a whole,” Reader said.

Seventy percent of businesses surveyed predicted higher deductibles, and half said cost increases would lead to higher out of pocket costs like co-insurance and co-pays. “It’s an unnecessary tax increase with bipartisan support to get rid of it,” Reader said.

There’s support from both sides of the aisle for bipartisan legislation to delay the HIT. While Sen. Ron Johnson (R-Oshkosh) supports HIT repeal, Sen. Tammy Baldwin (D-Madison) does not. “Hopefully she’ll join on and support that bill,” Reader said.

Last year, nearly 400 Republicans and Democrats voted to suspend the tax.

“There’s bipartisan support to get rid of this tax for another year. Hopefully lawmakers will hear what we’re hearing from our members and see that it’s just something they should postpone for at least another year if not get rid of altogether,” Reader said.

November 13, 2017 | By M. D. Kittle

Sanfelippo Introduces Free Market-Led Health Care Reform

MADISON, Wis. – State Rep. Joe Sanfelippo believes the free-market can lead the nation out of the health care mess wrought by liberals over the past several years.

To that end, the West Allis Republican is circulating legislation that would establish a state direct primary care program for the 1.1 million people on Medical Assistance in the Badger State.

The proposal also allows a health care provider and an individual patient or employer to enter into a direct primary care agreement, without being subject to the state insurance laws.

Sen. Chris Kapenga, R-Delafield, is the lead author on a companion bill in the Senate.

Sanfelippo says adding direct primary care to Medicaid programs could drive down costs by as much as 20 percent, potentially saving taxpayers hundreds of millions of dollars.

Under the direct care model, doctors eschew insurance contracts and deal directly with their patients. Many charge a monthly membership for routine visits and drugs. They list their prices for procedures up front, prices that are often significantly lower than the standard insurance-driven model.

Sanfelippo says adding direct primary care to Medicaid programs could drive down costs by as much as 20 percent, potentially saving taxpayers hundreds of millions of dollars.

“In our Medicaid program we have an overabundance of emergency use for primary care. Obamacare didn’t change that; if anything it made it worse,” Sanfelippo told MacIver News Service.

Sanfelippo, chairman of the Assembly Health Committee, said 80 percent of Medicaid patient illnesses could be treated by a primary care provider. Instead, many of the cases are being handled in the significantly more expensive emergency room.

Direct primary care for a set monthly fee could stem the tide of Medicaid emergency visits, provide more cost-effective preventative health care and, unlike former President Barack Obama’s failed promises, direct care could truly “bend the health care cost curve.”

“We are spending a fortune,” Sanfelippo said, noting that the state spends $56 million annually on Medicaid recipients who use the ER more than seven times a year.

Total Medical Assistance payments in Wisconsin have soared from $4.7 billion in 2004 to nearly $9.2 billion in the 2016-17 fiscal year, according to the Legislative Fiscal Bureau.

The bill specifically states that direct primary care is health care, not health insurance, and therefore is not bound by the state insurance law. That provision could open the door to a more robust direct care marketplace, further driving down costs through competition.

Direct care is empowering consumers and the free market to drive down the cost of health care and, as has been abundantly documented, improve outcomes.

Direct care is empowering consumers and the free market to drive down the cost of health care and, as has been abundantly documented, improve outcomes. It offers the return of the true doctor-patient relationship because it shifts control from far away bureaucrats to health care consumers.

Price transparency up front. No negotiating. No haggling. No copays or deductibles or piles of insurance paperwork and administrative red tape. Just a flat fee for the medical service provided.

Sanfelippo pointed to Solstice Health, a direct primary care clinic in his district providing unlimited health care services for as little as $39 per month. The model is built on pricing transparency, and the monthly memberships come without per-visit fees, and with unlimited wholesale labs, wholesale imaging, and wholesale medications.

“It’s Your Money. Its Your Healthcare. Take It Back,” declares Solstice on its website.

“Nobody takes their car to the repair shop and says, ‘Just fix it. I’ll wait to see what the bill is when you’re done.’ Yet that’s exactly what we do with our health care,” Sanfelippo said.

Direct care providers presage a “fundamental shift toward more transparent, market-driven pricing” and changes in hospital capital allocation, health care industry consultant David Johnson told Crain’s Chicago Business earlier this year.

“What’s happening in the private market will ultimately reshape health care more than government reimbursements” he said.

Twenty-three states have some form of direct primary care law in place, but Wisconsin could be a national leader in bringing direct primary care to its Medical Assistance programs.

But Sanfelippo knows it won’t be easy. He’s prepared for a pitched battle with the insurance industry.

“I expect there will be a lot of resistance from DHS. They feel they are the experts and (think) the only ideas that are good are the ones that come from their departments,” the lawmaker said.

The legislation requires DHS to issue requests for direct primary care proposals serving Medicaid patients by Oct. 1, 2018 “in at least one location.” DHS could expand to different locations. The department must enter into a contract with at least one provider by Jan. 1, 2019 and implement a direct primary care program, according to the bill. Health care services would begin by March 2020.

If necessary, DHS must seek federal approval for the program. If the federal government says no, the program would not be implemented.

The bill pegs the average monthly fee, to be set by DHS, at $70 per month “if there are equal numbers of participants from each (Medical Assistance) population.”

DHS would be required to provide status reports on the program, and investigate complaints.

Sanfelippo said he will push for legislative hearings soon.

“I don’t expect changes overnight. I’m hoping we will have a lot of open-minded people willing to consider it,” the lawmaker said.

November 13, 2017 | By M. D. Kittle

Sanfelippo Introduces Free Market-Led Health Care Reform

MADISON, Wis. – State Rep. Joe Sanfelippo believes the free-market can lead the nation out of the health care mess wrought by liberals over the past several years.

To that end, the West Allis Republican is circulating legislation that would establish a state direct primary care program for the 1.1 million people on Medical Assistance in the Badger State.

The proposal also allows a health care provider and an individual patient or employer to enter into a direct primary care agreement, without being subject to the state insurance laws.

Sen. Chris Kapenga, R-Delafield, is the lead author on a companion bill in the Senate.

Under the direct care model, doctors eschew insurance contracts and deal directly with their patients. Many charge a monthly membership for routine visits and drugs. They list their prices for procedures up front, prices that are often significantly lower than the standard insurance-driven model.

Sanfelippo says adding direct primary care to Medicaid programs could drive down costs by as much as 20 percent, potentially saving taxpayers hundreds of millions of dollars.

“In our Medicaid program we have an overabundance of emergency use for primary care. Obamacare didn’t change that; if anything it made it worse,” Sanfelippo told MacIver News Service.

Sanfelippo, chairman of the Assembly Health Committee, said 80 percent of Medicaid patient illnesses could be treated by a primary care provider. Instead, many of the cases are being handled in the significantly more expensive emergency room.

Direct primary care for a set monthly fee could stem the tide of Medicaid emergency visits, provide more cost-effective preventative health care and, unlike former President Barack Obama’s failed promises, direct care could truly “bend the health care cost curve.”

“We are spending a fortune,” Sanfelippo said, noting that the state spends $56 million annually on Medicaid recipients who use the ER more than seven times a year.

Total Medical Assistance payments in Wisconsin have soared from $4.7 billion in 2004 to nearly $9.2 billion in the 2016-17 fiscal year, according to the Legislative Fiscal Bureau.

The bill specifically states that direct primary care is health care, not health insurance, and therefore is not bound by the state insurance law. That provision could open the door to a more robust direct care marketplace, further driving down costs through competition.

Direct care is empowering consumers and the free market to drive down the cost of health care and, as has been abundantly documented, improve outcomes. It offers the return of the true doctor-patient relationship because it shifts control from far away bureaucrats to health care consumers.

Price transparency up front. No negotiating. No haggling. No copays or deductibles or piles of insurance paperwork and administrative red tape. Just a flat fee for the medical service provided.

Sanfelippo pointed to Solstice Health, a direct primary care clinic in his district providing unlimited health care services for as little as $39 per month. The model is built on pricing transparency, and the monthly memberships come without per-visit fees, and with unlimited wholesale labs, wholesale imaging, and wholesale medications.

“It’s Your Money. Its Your Healthcare. Take It Back,” declares Solstice on its website.

“Nobody takes their car to the repair shop and says, ‘Just fix it. I’ll wait to see what the bill is when you’re done.’ Yet that’s exactly what we do with our health care,” Sanfelippo said.

Direct care providers presage a “fundamental shift toward more transparent, market-driven pricing” and changes in hospital capital allocation, health care industry consultant David Johnson told Crain’s Chicago Business earlier this year.

“What’s happening in the private market will ultimately reshape health care more than government reimbursements” he said.

Twenty-three states have some form of direct primary care law in place, but Wisconsin could be a national leader in bringing direct primary care to its Medical Assistance programs.

But Sanfelippo knows it won’t be easy. He’s prepared for a pitched battle with the insurance industry.

“I expect there will be a lot of resistance from DHS. They feel they are the experts and (think) the only ideas that are good are the ones that come from their departments,” the lawmaker said.

The legislation requires DHS to issue requests for direct primary care proposals serving Medicaid patients by Oct. 1, 2018 “in at least one location.” DHS could expand to different locations. The department must enter into a contract with at least one provider by Jan. 1, 2019 and implement a direct primary care program, according to the bill. Health care services would begin by March 2020.

If necessary, DHS must seek federal approval for the program. If the federal government says no, the program would not be implemented.

The bill pegs the average monthly fee, to be set by DHS, at $70 per month “if there are equal numbers of participants from each (Medical Assistance) population.”

DHS would be required to provide status reports on the program, and investigate complaints.

Sanfelippo said he will push for legislative hearings soon.

“I don’t expect changes overnight. I’m hoping we will have a lot of open-minded people willing to consider it,” the lawmaker said.

November 1, 2017 | By Chris Rochester

The Obamacare Nightmare Continues in 2018

Premiums skyrocket again, tens of thousands lose coverage as “death spiral” comes to Wisconsin

[Madison, Wis…] Today is the first day of Obamacare’s 2018 open enrollment period, a time when the horrors of Halloween will continue for hundreds of thousands of Wisconsinites who are slapped with sticker shock as they shop for health insurance through Obamacare.

Last month, the state’s Office of the Commissioner of Insurance announced that Obamacare premiums would skyrocket by 36 percent in Wisconsin, higher than the national average of 34 percent. Worse, 75,000 Wisconsinites are losing their coverage because insurers are abandoning Wisconsin’s Obamacare market.

In 2017 alone, Anthem Blue Cross/Blue Shield, Molina Healthcare, and Health Tradition Health Plan announced they would stop offering plans on Wisconsin’s Obamacare exchange in 2018. Humana, UnitedHealth, Aetna, and Arise had already left the market.

That means less competition, fewer choices for consumers, and a death spiral for the individual insurance market in Wisconsin.

Responding to the breakdown of Wisconsin’s Obamacare market, MacIver Institute President Brett Healy on Wednesday issued the following statement:

“Now that open enrollment has begun for 2018, Wisconsinites will once again face the stark reality that President Obama’s signature achievement has been an unmitigated failure that’s trapping middle- and low-income Americans in its death spiral.

“The evidence is all around us that Obamacare is in freefall. As insurers continue abandoning Obamacare in Wisconsin and around the country, premiums will keep skyrocketing and more and more people will lose their coverage. Any attempt to shift the blame for the law’s failure to President Trump ignores the fundamental flaws that doomed Obamacare from the start.

“After years of lies by President Obama that his signature law would ‘bend the cost curve down’ and that ‘if you like your doctor, you can keep your doctor,’ you can’t blame people for being confused that the so-called Affordable Care Act is actually an unaffordable boondoggle. It’s time for lawmakers to repeal and replace this fundamentally broken system.”

November 1, 2017 | By Chris Rochester

Obamacare “Death Spiral” Hits Wisconsin Insurance Market

[Madison, Wis…] Wednesday marked the first day of the six-week open enrollment season for 2018 Obamacare plans, a time when many Wisconsinites shopping for health insurance will be hit with yet another year of sticker shock.

Officials announced early in October that Obamacare premiums in Wisconsin would jump by an eye-popping 36 percent in 2018. That’s triple the preliminary increase revealed in August and more than double last year’s final rate increase of 16 percent.

Now that open enrollment is underway, 75,000 Wisconsinites who will lose their coverage at the end of the year are shopping for a new plan, whether they want to or not – more bad news delivered by government officials in October. That’s approximately one in three of the 215,000 Wisconsinites who buy their coverage on the individual market.

Most of the 75,000 canceled plans are the result of insurers continuing to drop out of Wisconsin’s Obamacare market. The massive losses causing them to withdraw are the result of more expensive enrollees, fewer younger and healthier enrollees, and more people deciding to pay the penalty rather than buying increasingly expensive insurance plans.

“I think we’re sitting in a market where there is some concern that we’re in a death spiral, and the individual market’s experience is deteriorating,” said deputy insurance commissioner JP Wieske in early October, adding the individual insurance market in Wisconsin has lost $400 million over the last three years. “That’s a very significant amount of money to have lost in just the individual market.”

In 2017, Anthem Blue Cross/Blue Shield joined several other major insurers in dropping out of Wisconsin’s increasingly toxic Obamacare market. They were followed by Molina Healthcare, the largest remaining insurer, which dropped out after proposing a preliminary rate hike of more than 40 percent. Health Tradition Health Plan, offered by Mayo Clinic Health System of La Crosse, also fled Obamacare this summer.

Anthem, Aetna, UnitedHealth, and Humana – four of the five largest health insurers in the country – all stopped serving Wisconsin through the Obamacare exchanges in the past two years.

On average, Wisconsin counties are losing one insurer per county from 2017 to 2018. Eleven Wisconsin counties will have just one insurer offering plans on the federally facilitated marketplace (FFM) next year: Brown, Door, Kewaunee, Manitowoc, Marinette, Menominee, Octonto, Rusk, Sheboygan, Waupaca, and Waushara, according to OCI data.

The decline of the individual insurance market is even more stark when compared with 2016. Wisconsin counties have lost an average of five insurers on the individual market per county between 2016 and 2018. Plans offered on the Obamacare market – a significant subset of insurance plans on the individual market – have declined by an average of 2.44 plans per county over that time.

The county hit hardest by the deterioration of the individual market has been Outagamie County. In 2016, 11 insurers offered plans in that county – eight on the Obamacare market. In 2018, there are just three plans to choose from, two of them through Obamacare.

The trend of individual plans in decline, whether they’re offered through the Obamacare exchanges or not, is repeated across the state as the entire individual insurance market falls victim to the dreaded “death spiral,” a consequence of Obamacare’s many fatal flaws.

Only five counties have added insurers between 2016 and 2018. Burnett, Dunn, Pierce, Polk, and St. Croix counties all gained one insurer.

The decline in competition among insurers means less incentive to hold costs down. As Wieske said, fewer and fewer insurers are being forced to take on the risk of an increasingly unstable, risk-riddled market.

The finalized 36 percent increase is a reflection of the instability that’s been growing in Wisconsin’s market for years.

Four Wisconsin health insurance plans are increasing their premiums by more than 50 percent in 2018, according to new final rate increases available on the federal HealthCare.Gov website:

  • Dean Health Plan’s final rate increase for its Individual EPO plan is 50.47 percent.
  • Common Ground, the nonprofit set up in the wake of Obamacare using taxpayer-backed loans, is increasing premiums for its individual EPO plan by 62.67 percent.
  • Network Health Plan’s individual HMO plan will jump by 66.94 percent.
  • Molina Healthcare of Wisconsin is increasing its individual health plan by a staggering 106 percent, but it will not offer the plan on the Obamacare exchange.

Wieske contrasted Obamacare’s individual market increases with non-Obamacare group insurance plans, which increased just 4.89 percent for 2018 – less than one-seventh the rate of Obamacare plans. Those are the plans employers typically offer and where most Wisconsinites get their coverage.

Since Obamacare took effect, its premium increases have far outpaced non-Obamacare plan increases. Those group plans have steadily increased by around 5 percent per year, while Obamacare rate hikes have consistently doubled the previous year’s increase.

The sharp contrast in premium increases between individual and group plans “indicates some concern that the individual market under this regulatory scheme of Obamacare is just not sustainable,” Wieske said.

Rate increases for 2018 will likely make the problem of attracting younger, healthier people to the individual market, and the death spiral, even worse.

On average, 21-year-olds shopping for a Silver Plan, the second-lowest-cost Obamacare plan, will see an average premium increase of 51 percent, according to data provided by the OCI. Individuals that age can expect to see a 105 percent increase in Marinette and Oconto counties and a 77.27 percent increase in Outagamie, Sheboygan, and Winnebago counties.

With finalized federal insurance data now available and open enrollment underway, check in often as MacIver continues to analyze the unfolding Obamacare disaster.

October 25, 2017 | By M. D. Kittle

Free-Market Physicians Look To Save America’s Broken Health Care System – Directly

[Madison, Wis…] Dr. Kevin Tadych believes he is standing on a tectonic shift in health care, one that truly could bend the health care cost curve.

The health care revolution is primed, Tadych asserts, and it will be led by the free market.

“These are exciting times. I’m excited to be a part of this,” the Minocqua orthopedic surgeon told MacIver News Service in an interview this week.

Tadych’s Northern Wisconsin Bone & Joint Center is a purveyor of direct care or direct pay medicine. He’s cutting out the middlemen, the insurance company, the bureaucrat, the paper-pusher, and dealing directly with patients – at a significant savings for his customers.

Under the direct care model, doctors eschew insurance contracts and deal directly with their patients. Many charge a monthly membership for routine visits and drugs. They list their prices for procedures up front, prices that are often significantly lower than the standard insurance-driven model.

Direct care is empowering consumers and the free market to drive down the cost of health care and, as has been abundantly documented, improve outcomes. It offers the return of the true doctor-patient relationship because it shifts control from far away bureaucrats to health care consumers.

Price transparency up front. No negotiating. No haggling. No copays or deductibles or piles of insurance paperwork and administrative red tape. Just a flat fee for the medical service provided.

Need carpal tunnel surgery? The bill in Tadych’s office is $1,900 – everything included. In the market for total knee replacement? $15,000, or about half the going rate at traditional providers bound by standard insurance agreements.

“A guy called up all the way from Virginia. He found me online,” Tadych explained. “He said, ‘Is it true you do carpal tunnel procedures for $1,900.’ I said, ‘Yes it is.’ He said, ‘I’m getting a ticket and flying out to see you.’ The closest price he could get in his area for the same surgery was $13,000.”

Tadych didn’t invent direct care, but he and physicians like him – sick of the high cost of health care driven by falling reimbursement rates, cost shifting, and crippling federal regulations – are bringing medical care back to the basics.

State Rep. Joe Sanfelippo likes what he sees in the direct pay health care model that he says is “very slowly sweeping the country.” The West Allis Republican, who chairs the Assembly’s Health Committee, said he’s been looking at how to foster a direct primary care system, not bound by health insurance, in Wisconsin.

Legislation could be coming soon.

“It would empower individuals and employers to be able to go directly to a provider and bypass health insurance companies,” he told MacIver News Service last week during an interview on the Jay Weber Show, on NewsTalk 1130 WISN.

“By doing so we’re able to see very cost-effective and efficient prices being passed on to consumers,” Sanfelippo added. “It’s that kind of free-market thinking that, when you take all the constrictions that the federal government has on our health care right now, you take those off and you allow ideas like this to foster and take root.”

The lawmaker said he, his staff and some of his colleagues have spent the past couple of years examining ways to attack the escalating costs of health care in the Obamacare era. Sanfelippo said direct primary care could go a long way in controlling Wisconsin’s rising Medicaid costs. Doctors are getting about 62 cents on the dollar in Medicaid reimbursements, pushing physicians out and driving up costs for the insured.

Twenty-three states have some form of direct primary care law in place, and Sanfelippo said the savings from the “no insurance” billing and payments arrangements are 20 percent or more. Direct care could amount to significant savings to taxpayers, he said. Total Medical Assistance payments in Wisconsin have soared from $4.7 billion in 2004 to nearly $9.2 billion in the 2016-17 fiscal year, according to the Legislative Fiscal Bureau.

Sanfelippo pointed to Solstice Health, a direct primary care clinic in his district providing unlimited health care services for as little as $39 per month. The model is built on pricing transparency, and the monthly memberships come without per-visit fees, and with unlimited wholesale labs, wholesale imaging, and wholesale medications.

“It’s Your Money. Its Your Healthcare. Take It Back,” declares Solstice on its website.

Mequon-based Smart Choice MRI has been leading the direct care revolution for years. The growing magnetic resonance imaging chain charges a maximum $600 fee – about $2,000 lower than the average MRI.

Direct care providers such as Smart Choice presage a “fundamental shift toward more transparent, market-driven pricing” and changes in hospital capital allocation, health care industry consultant David Johnson told Crain’s Chicago Business earlier this year. “What’s happening in the private market will ultimately reshape health care more than government reimbursements.”

Tadych, fed up with the insurance chase, was inspired by Keith Smith and Steven Lantier, the physicians behind the Surgery Center of Oklahoma. The “free market-loving, price-displaying” cash-based medical provider lists the prices of all of its medical procedures on its website, like a restaurant menu but with body parts. The Surgery Center, launched in 1997, doesn’t take insurance and charges significantly lower rates than its competitors in the standard health care system.

Tadych helped launch a chapter of the Free Market Medical Association, an organization of medical professionals with a “mutual desire to change the face of healthcare.”

The northern Wisconsin surgeon, part owner of the Northwoods Surgery Center, has been employing the direct care model for nearly two years.

“I said it was time to get serious, so I dropped most of my insurance contracts and we’ve been growing ever since,” he said, adding that his practice will no longer accept Medicare after the first of the year.

Tadych acknowledges leaving the insurance fold has cost him. He said his revenues were initially cut in half, but he’s “not begging for bread.” He has seen his business climb as medical consumers do what consumers in general do: price shop. What they’re learning, to the dismay of the traditional health care players, is that lower price does not have to mean sacrificed quality, Tadych said.

“I’m not making the money I used to, but I’m still eating well. And it’s growing,” he said. “I feel good giving someone health care knowing it was in their range.”

October 19, 2017 | By Bill Osmulski

Liberals Abandon Truly Needy With “BadgerCare For All”

Last week the country realized Obamacare cannot survive unless the president violates the US Constitution, and the current president is not willing to do that.

Monthly premiums on the Obamacare Exchanges are simply unaffordable, and every year the prices get higher. In Wisconsin, the average premium on the exchange this year is $514. That’s a 93% increase from four years ago. Next year it’s expected to increase another 36%.

There are also few choices on the exchanges. Every year more insurance providers leave. Across the country, a total of 73 providers out of 298 dropped out of the exchanges last year. About a third of all the counties in the country only have one provider to choose from. The less competition, the higher the prices climb.

In order to get people to use the exchanges, the Affordable Care Act promised to subsidize the premiums. However, the original Obamacare law passed by Democrats in Congress did not actually appropriate any money for those subsidies. According to the Constitution, only Congress can appropriate money, but that didn’t stop President Obama from ordering the Treasury to start paying the premiums in 2014. The Court said that was unconstitutional, but it didn’t stop Obama from continuing the subsidies. President Trump announced last Thursday he will not continue that unconstitutional practice.

Everyone knows without the subsidies, the Obamacare exchanges are finished. And without the exchanges, Obamacare is finished. Democrats in Wisconsin attacked Trump mercilessly, and then admitted Obamacare was never really going to work in the first place.

“No one ever said the Affordable Care Act was perfect, but it was only a good first step,” Citizen Action of Wisconsin Executive Director Robert Kraig told the media during a conference call on Friday.

“The critique of the Affordable Care Act has not necessarily been off-base when made by critics leading up to the 2016 election and beyond,” Rep. Eric Genrich (D-Green Bay) stated on that same call.

Despite the admitted failure of Obamacare, liberals in Wisconsin continue to demonstrate their commitment to a universal, government-provided, taxpayer-funded healthcare system. Their latest attempt: “BadgerCare For All.”

The plan would supposedly let anyone buy a BadgerCare Plus policy at “full price.” Genrich, who wrote the Assembly version of the bill (with Citizen Action’s help), says the policies are more affordable than those on the Obamacare exchanges and it won’t cost the state a dime. The plan may not be unconstitutional, but it does completely ignore the laws of economics.

Even though Democrats claim consumers would be paying full-price for the cost of their coverage, providers would receive the same miniscule reimbursement rate they get for any Medicaid patient. In Wisconsin, Medicaid only reimburses about half the cost for primary care, according to a study by the Kaiser Family Foundation. And so, as the number of patients paying with Medicaid increases, the more pressure doctors will face to stop accepting Medicaid patients.

The non-partisan Legislative Fiscal Bureau was just as direct when it warned Genrich about his plan.

“BadgerCare Plus costs are influenced by provider reimbursement rates paid under the program. These reimbursement rates are generally well below rates paid by commercial health care plans, which likely has the effect of restricting the number of medical providers who are willing to participate in the program, as well as the extent of their participation. The expansion of the number of persons who receive coverage under the buy-in proposal could exacerbate provider access problems,” the June 2nd memo reads.

Considering that Medicaid currently serves the most vulnerable members of our society, it is curious how quickly the left is willing to expose them to even greater hardship when they are looking to score political points.

Contrary to liberal claims, the LFB memo also suggests that “BadgerCare For All,” will lead to greater costs for the state. That’s because the only way to prevent a stampede of providers abandoning Medicaid is to increase the reimbursement rate.

“Any such increase would increase the cost associated with providing coverage and also increase the amount of the premiums paid for coverage,” the memo states.

There was one last piece of bad news for Genrich and Citizen Action. “A commercial insurer is required, under state insurance regulations, to maintain a reserve fund to ensure that the company has sufficient financial capacity to pay claims in the event that premium revenue is insufficient. While a BadgerCare Plus buy-in program would not be subject to these regulations, establishing a reserve would be prudent policy,” the memo concluded. That means even more potential cost to the state.

The liberals pushing “BadgerCare For All,” have had that Fiscal Bureau memo for over four months. It doesn’t support their agenda, and so they’ve completely ignored it – just like they’re willing to ignore the law, the Constitution, the principles of economics, and the truly needy.

October 12, 2017 | By Chris Rochester

Obamacare Premiums to Explode 36 Percent in 2018 as 75,000 Wisconsinites Lose Coverage

[Madison, Wis…] Consumers shopping for health insurance on Wisconsin’s Obamacare exchange for 2018 can expect an eye-popping 36 percent premium increase, far surpassing last year’s 16 percent hike.

Customers in the individual insurance market will be hit with the sticker shock on Nov. 1, when Obamacare’s open enrollment period begins, and 75,000 Wisconsinites who had coverage in 2017 will be shopping for new coverage whether they want to or not.

State officials announced the massive increase on Thursday, adding that 75,000 people will lose their coverage at the end of the year, mostly the result of several major insurers exiting Wisconsin’s Obamacare market in 2017. That’s a considerable chunk of the overall individual market, where about 215,000 Wisconsinites buy their coverage.

“Obamacare is collapsing, and these huge premium increases show the law failed on its promise to deliver affordable healthcare,” Gov. Scott Walker said in a statement. “While our state remains one of the best in the nation for health insurance coverage and quality, Obamacare is disrupting healthcare markets in our state and across the country.”

The finalized 36 percent average premium increase is three times larger than the preliminary 12 percent increase announced by the state Office of the Commissioner of Insurance (OCI) in August. The increase reflects the greater risk that a smaller number of insurers will have to take on by offering plans in a shaky, risk-riddled market, said J.P. Wieske, deputy commissioner of insurance.

The size of the price spike could indicate Wisconsin’s individual insurance market is in the “death spiral” that has gripped Obamacare markets across the nation.

“I think we’re sitting in a market where there is some concern that we’re in a death spiral, and the individual market’s experience is deteriorating,” Wieske said, adding the individual insurance market in Wisconsin has lost $400 million over the last three years. “That’s a very significant amount of money to have lost in just the individual market.”

“The fact that nobody wants to compete for this market despite the subsidies that are available to consumers, I think that’s sort of troubling,” Wieske said.

He contrasted Obamacare’s individual market increases with non-Obamacare group insurance plans, which increased just 4.89 percent for 2018 – less than one-seventh the rate of Obamacare plans. “That indicates some concern that the individual market under this regulatory scheme of Obamacare is just not sustainable,” Wieske said.

A double-digit increase was widely expected after preliminary rate requests released in August topped 12 percent. Insurers have also continued dropping out of Wisconsin’s Obamacare market, citing massive losses as a result of more expensive enrollees, fewer younger and healthier enrollees, and more people deciding to pay the penalty rather than buying increasingly expensive insurance plans.

In 2017, Anthem Blue Cross/Blue Shield joined several other major insurers in dropping out of Wisconsin’s individual insurance market. They were followed by Molina Healthcare, the largest remaining insurer, which dropped out after proposing a rate hike of more than 40 percent. Health Tradition Health Plan, offered by Mayo Clinic Health System of La Crosse, also fled Obamacare this summer.

Anthem, Aetna, UnitedHealth, and Humana – four of the five largest health insurers in the country – all left Wisconsin’s market in the past two years.

OCI reviewed the preliminary increase requests over the last several months and approved the final rate changes requested by Wisconsin insurance companies that will continue offering plans on the state’s Obamacare exchange. OCI instructed insurers to assume federal Cost Sharing Reduction payments (CSRs), taxpayer money paid to insurance companies, would terminate in 2018. CSRs make up about 15 percent of the total premiums.

Last year, premiums for Obamacare-compliant plans in Wisconsin increased 15.88 percent, the MacIver Institute reported in November. In addition, that analysis found the average statewide deductible for the benchmark bronze plan in 2017 was $12,414.46 for a family and $6,207.23 for an individual.

The price increases are the result of an older and less healthy group of enrollees, factors that have caused many of the nation’s largest insurers to stop offering plans on Obamacare exchanges altogether. Rate increases for 2018 will likely make the problem of attracting younger, healthier people to the individual market worse.

On average, 21-year-olds shopping for a Silver Plan, the second-lowest-cost Obamacare plan, will see an average premium increase of 51 percent, according to data provided by the OCI. Individuals that age can expect to see a 105 percent increase in Marinette and Oconto counties and a 77.27 percent increase in Outagamie, Sheboygan, and Winnebago counties.

In a statement, Commissioner of Insurance Ted Nickel said the OCI would explore options at the federal level to mitigate the price spike. “The ACA destabilized the Wisconsin individual health insurance market and federal health care reform efforts continue to face significant challenges…As a result, we are exploring our options available under the ACA Section 1332 Waiver for State Innovation.”

Wieske said other states, including Iowa and Minnesota, have used similar waivers to mitigate massive price spikes. Minnesota’s attempt to hold premium increases for those not receiving federal subsidies has cost the state $800 million.

“We stand committed to continuing our efforts in ensuring a stable and competitive market and affordable coverage for Wisconsin consumers,” Nickel said.

The decline in competitive markets has also played out nationally. While no counties are currently projected to have zero insurers, vast swaths of the country will have just one option on the individual market. According to the federal Centers for Medicare and Medicaid Services (CMS), 1,524 counties will have just one insurer offering a plan – nearly 50 percent of all counties.

Obamacare requires insurance plans to provide a wide range of coverage in order to qualify for subsidies, reducing the variety of plans that insurers can offer and limiting choice for consumers. But on Thursday, President Trump signed an executive order relaxing those mandates.

Trump’s action, which comes a month after the collapse of congressional Republicans’ efforts to repeal and replace Obamacare, is intended to allow insurers to offer lower-cost plans, a key to increasing competition and choice in the individual market and attracting younger and healthier people into the marketplace.

MacIver News Service will continue to analyze premium, deductible and other pricing information as it becomes available and publish our findings as soon as possible.

September 1, 2017 | By M.D. Kittle

Vern And Shari Colby Bitten By The ‘Monster’ That Is Obamacare

[Madison, Wis…] Work a little bit harder, earn just a little bit more, and the federal government will make you pay for your initiative.

That’s the story of the U.S. tax code, and that’s the story of Obamacare and its suite of health insurance premium subsidies that disappear once a taxpayer hits particular income thresholds.

Vern and Shari Colby found out working hard to get ahead comes with a steep price when it comes to Obamacare.

The River Falls couple earlier this week told MacIver News Service that they had to tap into their 401(k)s and ultimately sell their “forever home” after being hit with thousands of dollars in Obamacare penalties and skyrocketing health care bills.

But the Colbys’ health care nightmare is far from over.

Shari and Vern, both 50, in 2013 attempted to sign up for health care coverage through the Affordable Care Act, commonly referred to as Obamacare after its namesake, former President Barack Obama. Like millions of Americans, the Colbys had all kinds of trouble logging onto the constantly crashing Healthcare.gov website. “It took forever,” Shari recalled.

Finally she reached a real human being. An Obamacare customer service agent walked Shari through the application process and assured her that she and her husband would qualify for premium tax credits under the health care law. Vern works 60-hour-plus weeks as a milk truck driver. Shari logs between 30 and 35 hours per week as a florist. Their combined income in 2014 was around $60,000, Shari said.

The Colbys paid their premiums and ultimately submitted their check stubs to make sure they qualified for the subsidies they had received.

After they filed their tax return in March 2015, the IRS broke the bad news. The Colbys had to pay back the $7,000 they had received in subsidies to cover their expensive Obamacare premiums because they made a little too much money and slipped over the income threshold for the federal subsidies.

This year, the income cap on the health insurance tax credits for a married couple without qualifying children, like the Colbys, is just over $64,000 at 400 percent of the federal poverty level, and $48,000 at 300 percent. But even families under the threshold may be ineligible for subsidies based on other factors.

The Colbys were denied – long after they were told not to worry that if they were promised subsidies, they could keep their subsidies.

“It’s not like we’re not trying to help ourselves. We were working and trying,” Shari said.

The surprise IRS bill was the proverbial straw that broke the Colbys’ financial back. The couple in recent years has encountered some severe health problems. Vern had a stroke. He was yanked off of scaffolding, breaking both of his feet. He was caught underneath a tractor, smashing his lungs. And Shari this summer suffered a back injury.

“We’ve got into our savings. We don’t buy new cars. We duct tape everything together and make it work,” Shari said. “We had to dip into our 401(k) on two different occasions. We did everything we can to stay afloat.”

“We’ve gone through all of any money we ever had and still had to sell our house,” she added.

But the Colbys’ sad health care odyssey continues.

They were priced out of Obamacare, and now have limited options for the bare bones short-term major medical policies they have been forced to purchase, Shari said. That’s a common problem across the country, as more and more health insurers drop out of the Obamacare marketplace.

“It’s a whole different monster,” Shari said. “As far as trying to get insurance, I am in a pickle right now.”

The Colbys’ current three-month policy expires later this month, and they’re looking at higher premiums and few choices ahead.

They’ve had to go without health insurance for a stretch because they simply couldn’t afford it.

They explored the Obamacare route again in late spring, but the Affordable Care Act has become even more unaffordable for the Colbys. They faced a monthly premium of $1,180, or $14,160 per year, with a $12,600 deductible, Shari said. Such costs would drive this middle income couple closer to the poverty line. Currently, the Colbys are paying $480 per month in premiums.

On top of all of that, Shari and Vern had to pay the Obamacare penalty for not carrying insurance for part of the year. The “shared responsibility fee” under the law’s individual mandate is 2.5 percent of taxable household income above the filing threshold.

Unsubsidized premiums are sharply higher this year than last year, according to HealthInsurance.gov, pushing more people – particularly healthy young people – out of the collapsing Obamacare marketplaces.

U.S. Sen. Ron Johnson (R-Oshkosh) called the Colbys the “quintessential example of the forgotten men and women within this health care system.”

“Shari and Vern…have been so drastically harmed and damaged by Obamacare,” Johnson said. “They’re working hard, making a little too much money, but they simply can’t afford these premiums that have doubled and tripled, and it cost them their 401(k) and their house.”

Last year, the Colbys sold the River Falls home that Shari designed, the “forever home” where the couple had lived 26 of the 28 years they were married and where they’d hoped to spend their golden years. The property, built on Shari’s grandfather’s farmland, had even more sentimental value. Now it belongs to someone else.

“We would like to keep it in the family, but I guess it’s just sheet rock and concrete and wood,” Shari said. “We’ll take the memories with us.”

“I hope at some point, sooner rather than later, things change in a big way to make it easier for folks like us,” she said. “I’m not opposed to paying premiums but when they’re gouging you … it’s all a mess. The private sector and the public sector.”

August 8, 2017 | By Chris Rochester

Democrats’ “BadgerCare For All” Plan Would Reduce Healthcare Access

Legislative Democrats and the head of left-wing Citizen Action of Wisconsin are pushing a new scheme to get more people hooked on government benefits. Despite the abundance of lessons to be learned from the ongoing failure of government-run healthcare, they are proposing opening up BadgerCare – Wisconsin’s health insurance program for the poor – to anyone willing to pay the monthly premium.

Wisconsin Democrats are serious about this. They even had the non-partisan Legislative Fiscal Bureau run an analysis on their plan – and then completely ignored the dire warnings they got back.

The Legislative Fiscal Bureau memo pointed out the reality that opening up BadgerCare Plus to anyone willing to pay the full premiums would do significant damage to the current program. To summarize LFB’s warning: the more people on BadgerCare, the fewer providers will accept it because reimbursement rates from the government are so low. That means decreased access to health care for the state’s most vulnerable populations.

“These [Medicaid] reimbursement rates are generally well below rates paid by commercial health care plans, which likely has the effect of restricting the number of medical providers who are willing to participate in the program, as well as the extent of their participation,” warned Jon Dyck, LFB supervising analyst, in the June 2 memo.

In other words, Medicaid regularly stiffs healthcare providers by paying less than the full cost of services provided. Nationally, Medicaid pays only 52 cents for every dollar that private insurers pay. So if we push more of our citizens into BadgerCare, fewer doctors will accept BadgerCare patients because of the lousy reimbursement rate and access to health care will only get worse.

Dyck continued, “The expansion of the number of persons who receive coverage under the buy-in proposal could exacerbate provider access problems.”

That didn’t stop Sen. LaTonya Johnson (D-Milwaukee) and Rep. Eric Genrich (D-Milwaukee) from introducing the bill, AB 449, that lets anyone sign up for BadgerCare Plus as long as they’re willing to pay an estimated $600 average premium.

Supporters of the bill insisted it will not result in any additional costs to the state at a press conference rolling out the ill-advised proposal. “This costs the government, the state of Wisconsin, nothing, no extra money,” insisted Citizen Action of Wisconsin Executive Director Robert Kraig, who led the Democrats’ press conference. “It’s a simple bill with no fiscal impact whatsoever.”

But the LFB went on to strongly hint that that’s not true, either. The federal government sets requirements for provider access rates, which means the state could end up paying more for BadgerCare because of the ‘public option.’

“It may be necessary to increase reimbursement payments in order to meet minimum provider access requirements under federal Medicaid regulations. Any such increase would increase the cost associated with providing coverage and also increase the amount of the premiums paid for coverage,” wrote Dyck.

The concerns over BadgerCare For All’s impact on health care access makes the question of how many people would actually sign up an important factor, but no one responding to questions at the ‘public option’ rollout knew how many people would be interested in enrolling.

“That’s a super good question. I think the LFB didn’t know, basically,” Kraig said when a reporter asked him how many people they expected would buy into the program.

A sprawling, now-infamous study in Oregon found that participation in Medicaid “generated no significant improvement in measured physical health outcomes,” compared with people with no insurance at all, according to health care expert Avik Roy.

Medicaid’s low reimbursement rates limit patients’ access to care, which could explain why health outcomes didn’t improve. The Oregon study also found that Medicaid enrollees visited the emergency room 40 percent more often than the uninsured.

There are also other notorious examples of the failures of government-run healthcare boondoggles like the scandal-plagued VA system, rationing of care in the UK (the Charlie Gard case comes to mind), and of course, Obamacare, which is devastating individual insurance markets across the country.

While long on vague, unsubstantiated claims about access to care and cost to taxpayers, the Democrats and Kraig did offer something unambiguous in their “BadgerCare For All” proposal: Obamacare isn’t working and the cost of health care is still too high.

“Republicans I think offered some fairly cogent critiques of the affordability issues and access issues that are ongoing in this country,” Genrich offered tepidly after Kraig explained that the motivation for the bill is the spiraling cost of health insurance in the Obamacare era.

Their solution – another big, open-ended government program to patch over the failures of another – is diametrically the wrong approach.

Reagan was right when he famously said, “The more the plans fail, the more the planners plan.” BadgerCare For All is one plan that should go straight into the circular file.

August 30, 2017 | By M.D. Kittle

Couple Sells Home, Cashes Out 401(k) To Cover Obamacare Bill

[Madison, Wis…] Shari and Vern Colby experienced first-hand the broken health care law that is Obamacare, according to U.S. Sen. Ron Johnson.

The River Falls couple sold their home after finding out from the IRS that they owed thousands of dollars to Uncle Sam thanks to the Affordable Care Act, commonly known as Obamacare.

“Shari and Vern Colby are literally the quintessential example of the forgotten men and women within this health care system,” Johnson (R-Oshkosh) told MacIver News Service in a recent interview on NewsTalk 1130 WISN.

Vern works 60-hour-plus weeks, while his wife puts in 35 hours weekly at a florist shop. They signed up for Obamacare in 2014, assured by a Healthcare.gov representative that they would qualify for promised federal subsidies. The Colbys paid their premiums and ultimately submitted their check stubs to make sure they qualified for the subsidies they had received.

When they filed their tax return in March 2015, the IRS followed up with the bad news. The Colbys had to pay back the $7,000 they had received in subsidies to cover their expensive Obamacare premiums “because they made a little too much money,” Johnson said. The couple’s combined income was $59,000, according to Shari Colby.

“It was just due to the IRS. We had talked about doing late payments, but you have to pay the money. It’s the IRS,” she said.

“So they had to pretty well deplete their 401(k), plus they had to sell the house they had intended to live the rest of their lives in because they didn’t want to lose it in foreclosure,” Johnson added.

A review of Pierce County real estate records shows the couple sold the home that Shari designed, their “forever home” that the Colbys have resided in for 26 of the 28 years they’ve been married.

Shari reached out to Johnson late last month, just as the Senate was taking up the so-called “skinny repeal” of Obamacare – legislation that went down in flames.

“Shari and Vern…have been so drastically harmed and damaged by Obamacare,” Johnson said. “They’re working hard, making a little too much money, but they simply can’t afford these premiums that have doubled and tripled, and it cost them their 401(k) and their house.”

While U.S. insurers bail out of the marketplaces created under the Affordable Affordable Care Act, sending the markets into a death spiral, Senate Republicans have failed at every opportunity to do what they promised to do: repeal and replace former President Barack Obama’s signature initiative.

In June, more than 1,200 counties were expected to have only one insurance provider available on the individual market next year, and 35,000 people were expected to live in counties with no insurance options, according to a scathing criticism in National Review.

“These numbers are expected to increase as insurers finalize their 2018 plans,” the piece states.

Premiums have also increased by more than 100 percent since the implementation of Obamacare, according to a report issued in May by the Department of Health and Human Services. Average individual premiums increased from $232 in 2013 to $476 in 2017.

In Wisconsin, premiums are expected to jump at least 12 percent next year, according to an analysis of preliminary rate increases by the MacIver Institute.

Folks like the Colbys are paying a greater price, Johnson said. Effectively they are caught between Barack and a hard place. Obamacare’s individual mandate demands Americans purchase health insurance – often very expensive insurance – or pay a penalty.

The Internal Revenue Service took in $2.8 billion in Obamacare penalties on 2016 tax returns from 4 million Americans, according to the Washington Free Beacon.

The Colbys bought insurance through the marketplace, but at a higher price than they ever dreamed. When they could no longer afford it, they were forced to pay a $2,500 penalty for not carrying health insurance, the punishment provision of the law.

“It’s a real tragedy, but unfortunately not enough of my colleagues in Washington, D.C. are worried about them because they didn’t seriously address these premiums that have skyrocketed, and they weren’t willing to be honest and courageous enough to address the root cause of the problem and bring those premiums down,” Johnson said.

Wisconsin’s senior senator has been highly critical of the process and much of the product coming out of the Senate. Last month he told NewsTalk 1130 WISN that Republicans over-promised on the campaign trail with repeal-and-replace pledges.

“I come from the business world where the standard is to always underpromise and overdeliver,” Johnson said on the Jay Weber Show. “I would say that’s…one of the reasons after the election I started talking about what we ought to do is repair the damage, focus on repairing the damage and working to transition to a system that actually works.”

Johnson took fire earlier this month when he suggested Arizona U.S. Sen. John McCain’s bout with brain cancer may have played a part in McCain’s vote against repeal of Obamacare.

“I think my comments were completely misconstrued. I was trying to first of all defend John’s position. A lot of us were pretty upset about the process, and I was also just being sympathetic with his condition,” Johnson said on CNBC’s “Squawk Box.” “I’ve got nothing but a great deal of respect for John McCain.”

Johnson told MacIver News the Obamacare problem isn’t going away. The Colbys are proof of that, he said.

Johnson said it’s time to turn management of health care back over to the states.

“I think we have the responsibility to try to limit the damage, try to do everything we can to stabilize these markets so Americans don’t experience a 25, 30, 35, 40 percent price increase because of Obamacare,” the senator said.

Shari Colby said she and her husband can’t take much more “affordable” health care.

“I hope at some point, sooner rather than later, things change in a big way to make it easier for folks like us,” she said. “I’m not opposed to paying for a premium, but when they’re gouging you and they can drop you and deny you, it’s all a mess. The private sector and the public sector.”

August 2, 2017 | By Chris Rochester

UPDATED: Obamacare Rates Could Jump 12 Percent or More in 2018, Preliminary Figures Show

Update: Molina Healthcare announced Wednesday it will withdraw from Obamacare exchanges in Wisconsin and Utah, citing a $230 million quarterly loss. The company had requested rate increases of 40+ percent for 2018 prior to the announcement. Read the company’s announcement here.

[Madison, Wis…] Obamacare premium increases will likely continue their rapid upward trajectory in 2018, according to new numbers from healthcare.gov.

Premiums for health insurance plans on Wisconsin’s Obamacare exchange could increase by 12 percent in 2018. Preliminary rate increase requests by Wisconsin insurance companies were posted Monday to the federal website.

Of the 90 Obamacare-compliant health insurance plans that reported rate changes to healthcare.gov, the average increase was 12 percent. Rate changes range from a modest 6.15 percent decrease to a staggering 46.25 percent increase.

The 12 percent figure is likely to change as insurers finalize their rate requests for 2018. The state Office of the Commissioner of Insurance then has to approve or deny the requests. Last year, preliminary figures showed a potential 10 percent increase, but the final figure was considerably higher at 16 percent.

Insurers are also awaiting a decision from President Donald Trump on whether to continue federal reinsurance payments to insurance companies, which partially offset the massive losses many insurers sustain by offering Obamacare plans.

The increases shouldn’t come as a surprise considering the declining health of the individual market. Between 2014 and 2016, the number of insurers offering plans on Wisconsin’s individual insurance market dropped from 54 to 41 – a 24 percent decline, according to OCI data.

Major health insurance companies have also dropped out of the Obamacare market en masse, including four of the five largest insurers in the country. Aetna and Anthem Blue Cross/Blue Shield announced earlier this year they would join Humana and UnitedHealth in withdrawing from Obamacare’s exchanges throughout the country.

Health Tradition Health Plan, an offering of Mayo Health System of La Crosse, also announced in early July it would not be offering Obamacare plans starting with 2018.

For 2018, insurers requested a premium increase for 83 plans effective on or after Jan. 1, 2018, while they requested a modest decrease for just seven plans.

A total of 17 plans requested increases of more than 20 percent, and four requested increases north of 40 percent. Molina Healthcare of Wisconsin requested the steepest increase for its individual HMO, a hike of 46.25 percent over 2017 rates.

Molina also requested a 40.76 percent premium increase for another of its individual plans, and Compcare Health and Network Health Plan also requested increases of more than 40 percent.

The proposed 2018 double-digit price increases come on top of a 16 percent premium increase last year and a family deductible of more than $7,000 for a mid-level silver plan.

Wisconsin’s troubled Common Ground Obamacare co-op, a taxpayer-supported nonprofit insurer established as an alternative to for-profit insurance companies, requested increases of 20.32 percent and 17.99 percent for its plans in 2018, considerably higher than last year’s 12.2 percent preliminary request.

Rate changes must be approved by state insurance commissioners. At the time of our search, only requested rate increases were available, while none had yet been approved, denied, or finalized.

Trump is expected to make an announcement Tuesday about the future of the Obamacare reinsurance payments – which, OCI officials say, could have a significant impact on the rate increases Wisconsinites will eventually absorb next year.

June 26, 2017 | By Chris Rochester

Shankland’s Health Insurance Rhetoric is Just Plain Wrong

Stevens Point Democrat peddles falsehoods while stoking hyper-partisan bonfire

The day after a crazed Bernie Sanders campaign worker fired 60 rounds in an attempt to assassinate congressional Republicans, state Rep. Katrina Shankland (D-Stevens Point) took to social media to perpetuate the kind of rhetoric that seemingly motivated gunman James Hodgkinson.

On Facebook, Shankland posted a mock “GOP Health Plan” card reading “In case of emergency: Die quickly.” The unsubtle implication is that Republicans want people to die – a sad local installment of a national messaging campaign by Democrats desperate to stop the repeal of Obamacare by any means possible.

Her social media stunt came with a mournful missive complaining that she had been chided at the Joint Finance Committee for more over-the-top and uninformed comments about new health plan options for state employees the committee adopted.

In an effort to save $63.9 million of taxpayer money, the budget committee agreed to direct the state’s Group Insurance Board to add Consumer-Driven Health Plan (CDHP) options for state employees. CDHPs generally cover basic medical needs, but offer a lower premium in exchange for higher deductibles.

CDHPs are often paired with tax-advantaged health savings accounts (HSAs) or health reimbursement arrangements (HRAs). Employees, often supplemented by employer contributions, can put pre-tax money into an HSA to cover out-of-pocket costs and roll the account over year-to-year. Under plans coupled with an HRA, employers reimburse employees’ heath costs. The two methods can also be paired.

Both HSAs and HRAs coupled with a high-deductible plan give healthcare consumers direct control over their healthcare dollars, creating much-needed price competition in healthcare and driving prices down.

Shankland claimed giving state employees the option of a high-deductible plan would cause people to forego life-saving care and ostensibly get sick and die. Women would skip breast exams, and people with chronic conditions would allow themselves to wither away. But in reality, CDHPs, HSAs, and HRAs are increasingly popular among large employers. In 2013, 39 percent of employers with 500 or more employees offered HRA- or HSA-eligible plans.

By Shankland’s “logic,” an awful lot of employers, then, want their employees to “die quickly.”

Rep. Mary Felzkowski, who actually owns an insurance firm, tried mixing in some facts. Employers have an innate incentive to keep their employees healthy and productive, she said. Add to that employees’ desire to keep their monthly premiums affordable amid rising healthcare costs and CDHPs come out as a pretty attractive option.

After scolding Shankland for her over-the-top fear mongering – saying she “should be ashamed” – JFC co-chair Rep. John Nygren also interjected with another inconvenient truth omitted by Shankland: the proposed CDHP option is just that – an option. No state employee is going to be forced into a health plan they don’t want. If they like their plan, they can keep it, unlike the millions of Americans whose coverage was cancelled thanks to progressives’ beloved trainwreck, Obamacare.

Wisconsin state employees will be able to choose a plan – if they think it’s best for them – with lower monthly premiums while covering out-of-pocket costs with an HSA or HRA, so they’ll still have essential health and medicine covered.

Offering more plan tiers with CDHP options will also save taxpayer money and help “bend the cost curve down” in the overall health care market.

Shankland is just plain wrong – her rhetoric displays her ignorance about the complexities of health insurance – and the timing of her “Republicans want you to die” rant betrays a jaw-dropping lack of judgment.

Lately, Democrats have been all too willing to use overheated rhetoric and outright lies to turn their health care policy differences with Republicans into a clash of “good people” versus “evil people who literally want you to die.”

Nygren was right. Shankland should be ashamed of herself – not just for her ignorance and over-the-top death mongering rhetoric on health insurance, but for her unabashed eagerness to throw gasoline on the political bonfire that nearly took a congressman’s life.

June 13, 2017 | By Brett Healy

MacIver Joins 45 Conservative Groups and Activists Urging Senate to Repeal all Obamacare Taxes

[Madison, Wis…] The MacIver Institute, along with 44 other free market groups and individuals, are urging the U.S. Senate to repeal all of Obamacare’s roughly $1 trillion in taxes in a letter to Finance Committee Chairman Orrin Hatch (R-Utah) sent on Tuesday.

Recent media reports suggest the Senate may delay or eliminate repeal of some of these Obamacare taxes. As the coalition notes, this would be a mistake:

“True repeal of Obamacare means repealing the Obamacare taxes and the Senate should resist the urge to deprive taxpayers of relief in order to pay for higher spending.”

As noted in the letter, repealing the Obamacare taxes will reduce taxes for businesses and families and help ensure a free market, patient-centered healthcare system:

“The roughly one trillion dollars in new or higher taxes imposed by Obamacare directly hit middle class families and small businesses, raise the cost of healthcare, and reduce access to care.”

In addition, repealing Obamacare taxes will lead to stronger economic growth, helping President Trump’s goal of three percent economic growth:

“Obamacare taxes directly suppress economic growth. The best example of this is the 3.8 percent so-called Net Investment Income Investment Tax on capital gains and dividends… A related tax hike is the 0.9 percent Medicare surtax on wages and self-employment income…”

The full letter follows and can be found here.

——

June 13, 2017

The Honorable Orrin G. Hatch, Chairman, Senate Committee on Finance

219 Dirksen Senate Office Building Washington, DC 20510

Dear Chairman Hatch:

As the Senate continues to make progress on legislation to repeal and replace Obamacare, we urge you and your colleagues to include repeal of the nearly 20 taxes imposed by the law.

During a February 1 speech at the Chamber of Commerce, you declared, “All of the ObamaCare taxes need to go as part of the repeal process.”

We agree.

Recent media reports suggest that the Senate may be wavering on repeal of these taxes. This would be a mistake. The final Senate repeal package should retain the broad tax relief that was included in the House passed American Health Care Act.

The roughly one trillion dollars in new or higher taxes imposed by Obamacare directly hit middle class families and small businesses, raise the cost of healthcare, and reduce access to care.

Obamacare taxes directly suppress economic growth. The best example of this is the 3.8 percent so-called Net Investment Income Investment Tax (NIIT) on capital gains and dividends. Historically, capital gains taxes have a significant negative impact on capital formation, productivity, and economic growth while raising little or even negative revenue.

Repealing the 3.8 percent NIIT would return the capital gains tax rate to 20 percent, the rate agreed to by President Clinton and a Republican Congress in 1997.

A related tax hike is the 0.9 percent Medicare surtax on wages and self-employment income, the repeal of which was unfortunately delayed six years by an amendment in the House. It should be repealed as expeditiously as possible.

Other Obamacare taxes directly impact the ability of Americans to meet healthcare costs, such as the income tax hike on families with high medical bills. Around 10 million families pay $200 to $400 in higher income taxes each year because Obamacare increases the threshold at which families can deduct medical expenses paid out of pocket.

Obamacare also makes it harder for individuals to save for their own healthcare choices. Roughly 20 million Americans use tax-advantaged Health Savings Accounts (HSAs) to save for healthcare costs. Another 30 million use Flexible Spending Accounts. There are multiple taxes that restrict the ability of families to use these savings accounts, which limits the choice of consumers.

Other taxes hit certain healthcare industries, such as insurance providers, medical device and prescription drug manufacturers. Inevitably, these taxes are passed onto American families in the form of increased costs.

Finally, the tax associated with the employer mandate has limited millions of Americans to part-time work and the tax penalty associated with the individual mandate hit eight million Americans in 2014, with a family of four facing an income tax hike exceeding $2,000.

True repeal of Obamacare means repealing the Obamacare taxes and the Senate should resist the urge to deprive taxpayers of relief in order to pay for higher spending.

We commend you on your stance to repeal these Obamacare taxes and urge any final package accelerate or at least maintain the House-passed tax reductions.

Sincerely,

Grover Norquist President, Americans for Tax Reform

James L. Martin, Founder/Chairman, 60 Plus Association

Phil Kerpen, President, American Commitment

Steve Pociask, President, American Consumer Institute

Lisa B. Nelson, CEO, American Legislative Exchange Council

Ashley N. Varner, Executive Director, ALEC Action

Dan Weber, President, Association of Mature American Citizens (AMAC)

Lindsay Boyd, Policy Director, Beacon Center of Tennessee

Norm Singleton, President, Campaign for Liberty

Andrew F. Quinlan, President, Center for Freedom and Prosperity

Chuck Muth, President, Citizen Outreach (Nevada)

Twila Brase, RN, PHN, President and Co-founder, Citizens’ Council for Health Freedom

Chip Faulkner, Executive Director, Citizens for Limited Taxation (Massachusetts)

David McIntosh, President, Club for Growth

Michael J. Bowen, CEO, Coalition for a Strong America

Thomas Schatz, President, Council for Citizens Against Government Waste

Katie McAuliffe, Executive Director, Digital Liberty

Adam Brandon, President, FreedomWorks

Richard Watson, Chairman, Florida Center-Right Coalition

Annette Meeks, CEO, Freedom Foundation of Minnesota

George Landrith, President, Frontiers of Freedom

Grace-Marie Turner, President, Galen Institute*

Mario H. Lopez, President, Hispanic Leadership Fund

Joseph Bast, President & CEO, The Heartland Institute

Heather R. Higgins, President & CEO, Independent Women’s Voice

Donald P. Racheter, Ph.D., Chair, Iowa Center-Right Coalition

Tom Giovanetti, President, Institute for Policy Innovation

Ryan Ellis, IRS Enrolled Agent

Seton Motley, President, Less Government

Colin A. Hanna, President, Let Freedom Ring

Stephen Waguespack, President and CEO, Louisiana Association of Business and Industry

Brett Healy, President, The MacIver Institute (Wisconsin)

Mary Adams, Chair, Maine Center-Right Coalition

Bryan Dench, Maine Conservative Activist

Tim Jone, Former Speaker, Missouri House of Representatives

Brian McClung, Chair, Minnesota Center-Right Coalition

Devon Herrick Ph.D., Senior Fellow, National Center for Policy Analysis

Brandon Arnold, Executive Vice President, National Taxpayers Union

Jeff Kropf, Executive Director, Oregon Capitol Watch Foundation

Jordan Harris & Josh Crawford, Co-Executive Directors, the Pegasus Institute (Kentucky)

Mike Stenhouse, Founder & CEO, Rhode Island Center for Freedom and Prosperity

Karen Kerrigan, President & CEO, Small Business & Entrepreneurship Council

David Williams, President, Taxpayers Protection Alliance

Michael W. Thompson, President, Thomas Jefferson Institute for Public Policy

Nancy Piotter, Executive Director, Virginians for Quality Healthcare

Gerrye Johnston, Founder/CEO, Women for Democracy in America, Inc.

Cc: United States Senators

*Organization listed for identification purposes only

May 17, 2017 | Chris Rochester

As Obamacare Continues Sinking, Americans Continue Losing

The mainstream media seems fixated on the insider politics surrounding repealing and replacing Obamacare, but the average person couldn’t care less about parliamentary procedures and intra-party squabbling. They’re faced with an inescapable reality: healthcare is unaffordable and inaccessible thanks to Obamacare. The question they want answered is: What is the point of having insurance if you can’t afford to use it?

The out-of-touch media coverage reminds me of the apocryphal tale about elite passengers on the Titanic arguing over the bar tab as the ship takes on water. Meanwhile, the people in steerage are stuck behind those gates trying to escape before the water reaches their heads.

The water is rising fast. In 2017, the average premium increase on the individual market in Wisconsin was 16 percent. One of the most egregiously expensive plans was in western Wisconsin, costing $51,000 per year in premiums for a couple unfortunate enough to be in their 50s with three children.

The cost of Obamacare plans is staggering. In a report last year that scoured the federal database of 2017 premiums in Wisconsin, the MacIver Institute found that a family of four would fork over an average monthly premium of $1,609.11 for a platinum plan – $19,309.32 per year – while a mid-level silver plan would cost them $1,297.02 in average monthly premiums, or $15,564.24 per year

Deductibles – the out of pocket cost of using your health insurance – also keep spiraling upward. For a top-tier platinum plan in Wisconsin, we found the average deductible is $900 for a family and $450 for an individual.

However, for a mid-level silver plan, the average deductible is $7,015.71 for a family and $3,491.92 for an individual. The average catastrophic plan deductible will be $14,300 for a family and $7,150 for an individual. That’s not cut-back-on-Starbucks money, that’s bankruptcy court, even for those earning a decent salary.

Obamacare proponents constantly point to the number of people they claim are insured because of Obamacare. But conflating health insurance with access to actual health care is looking through rose-colored glasses. In the real world, Obamacare decimates household budgets, especially middle class families who don’t receive federal subsidies and are whipsawed by the full cost of both premiums and deductibles.

Despite the double digit price spikes and astronomical deductibles in Wisconsin, we drew the long stick compared with our neighbor across the Mississippi River. Minnesotans on the individual exchanges got stuck with premium hikes as high as 67 percent in 2017.

In response, Minnesota Governor Mark Dayton and the Legislature were forced to bail out 123,000 middle class families to the tune of an additional $313 million in taxpayer money.

“If you like your plan, you can keep your plan,” President Obama said in PolitiFact’s 2013 Lie of the Year. In Minnesota, that lie came with the added asterisk that taxpayers have to come to your rescue after finding out your state’s politicians fell for a federal “free money” scam.

Fortunately, Gov. Walker and Wisconsin’s fiscally conservative legislature were more skeptical of Obama’s P.T. Barnum routine, saving us from a similar fiscal calamity.

The Minnesota example highlights an important and all-too-often overlooked point. If you’re unfortunate enough to make too much money to receive a federal subsidy – like most middle class families in America – you’re on the hook for the entire inflated premiums plus exploding deductibles for your Obamacare plan.

Middle class families stuck with Obamacare are drowning in the exorbitant costs, while poorer families who do receive subsidies can’t even afford to see their doctor because their deductibles are so high that the coverage is little more than a piece of paper. Worse, if you’re so cash-strapped that you choose to go without coverage, the IRS slaps you with a fine.

I recently heard the story of one low-income Wisconsin family of five – a husband, a wife, and three kids under the age of 10. Their punishment for going without insurance for three months last year was more than $800.

Only a nanny-state bureaucrat in a Washington, D.C. corner office would be so divorced from reality that they’d think such punitive policies are somehow fair, right, or just. They should get out of their plush enclaves and see how their policies really affect people. Or better yet, if Congress can get its act together, Obamacare bureaucrats should be standing in an unemployment line.

Obamacare cheerleaders can go on cable news and pen all the columns they want touting the expansion of health insurance coverage, but what good is having health insurance if the deductible alone will send your family into bankruptcy?

Obamacare’s continuing price spiral is caused in part by declining competition across the nation. One-third of counties in the United States have only one insurer this year, according to the Kaiser Family Foundation. Residents in these counties will have only one choice – in other words, no choice at all.

Wisconsin’s Obamacare market lost an average of 1.39 insurers per county from 2016-2017 according to our analysis. Fourteen counties have just one or two insurance companies offering Obamacare plans in 2017.

Competition – which inevitably “bends the cost curve down,” to parody another failed Obama promise – is drying up by the week. Just this month, Aetna announced it would stop selling Obamacare policies entirely next year, citing $381 million in losses in the first quarter of 2017 and $700 million in total losses.

Aetna joins insurance giants Humana and UnitedHealth in completely withdrawing from Obamacare in the wake of massive, unsustainable losses. A network of other non-profit health insurance co-ops established by Obamacare have also folded, taking billions of taxpayer dollars down with them. Out of 23 co-ops, only 4 remain, including Wisconsin’s imperiled Common Ground Co-op, which survived only after a secret infusion of cash.

Insurers’ inability to simply break even on Obamacare plans is the result of far more older, sicker enrollees and far too few younger, healthier enrollees to balance the actuarial tables. Obama should’ve been honest with the American people and said the law depends on younger and healthier people paying exorbitant rates for coverage they don’t need in order to prop up the rickety system he and Democrats rammed through Congress.

Obamacare is in a death spiral. Though the House’s version of repeal and replace narrowly passed – certainly a cause for celebration – Congress remains mired in inaction and Americans remain stuck in quicksand. Reporters wringing their hands over CBO scores and telenovela theatrics should remember that few outside the beltway ultimately care about any of that.

There is no bailing out or patching up Obamacare. It will eventually sink to the bottom of the abyss. When it does, nobody in real America will thank the media for keeping them up to date with irrelevant process stories as they go down with the ship.

May 11, 2017 | Chris Rochester

Did Politics Trump Good Policy in Self-Funded Insurance Debate?

At long last, the Legislature’s Joint Finance Committee will have to make a decision on whether to adopt a self-funded insurance system for state employees’ health insurance. The bad news is that Governor Walker’s proposal to make the switch and save $60 million is all but dead in the state Legislature.

On Monday, the Group Insurance Board submitted contracts with third-party administrators for a self-insurance system. Those contracts spell out in black and white at least $60 million in savings over the biennium – that’s on top of $22 million in possible savings if Obamacare and its obscene tax burden is not repealed. With the contracts in hand, JFC now has about three weeks to convene a meeting and make a decision.

“Since taking office, we have sought to reform government to make it more accountable and cost effective to the hard-working taxpayers,” Walker said in a statement on Monday. “Moving to self-insurance is one of these reforms and we urge the Joint Committee on Finance to approve these contracts and invest these savings into the classroom.”

Unfortunately, it appears that JFC is prepared to leave this windfall for taxpayers on the table. Why? We’ve heard a carousel of arguments against self-insurance that have all stalled, but the final stand for self-insurance naysayers might boil down to pure politics.

Early arguments by opponents of self-insurance breathlessly claimed that the move would gut state workers’ health insurance plans. Ignoring how out of step these lavish plans are compared with their private sector counterparts, it quickly became clear this doom-and-gloom claim had no basis in reality – especially after the actual proposals were received.

Next, the self-insurance doom-mongers portrayed the switch as a journey down a long, dark tunnel. The fact is that there’s nothing mysterious or scary about self-insurance; Wisconsin already partly self-insures its dental plan and its pharmacy plan.

At least 20 states completely self-fund their state employee health plans, including Minnesota, which moved to 100 percent self-funded insurance in 2002. Also, 46 states use self-insurance in some way.

In the upper Midwest, no states are fully-insured, meaning none completely rely on private insurance and all are self-funded at least in part.

More than 90 percent of all large employers, companies that employ 5,000 or more employees, also use self-funded insurance. To say adopting this system would be risky and experimental is diametrically untrue. In fact, it would be routine and economical.

Critics then moved on to prophesizing that the switch could pose a potentially catastrophic financial risk to the state. True, the state would be directly assuming the risk rather than putting insurance companies in the middle. But barring an unprecedented epidemic sweeping state office buildings, the risk factor has been greatly hyped.

The risk would actually be low because of the sheer size of the state’s workforce, which means total annual payouts would be predictable and fluctuations minimal, according to insurance expert Dean Hoffman, who recommended the switch to the Governor’s Commission on Government Reform last May.

Legislative Republicans are also uncertain about the future of Obamacare, which imposes a variety of taxes and fees on the insurance marketplace that would be absorbed by taxpayers in Wisconsin.

JFC co-chair Sen. Alberta Darling cited Wisconsin’s relatively low premium increases at a Tuesday press conference. “Why would we want to shift out of that and into uncertainty at this point?” she asked.

Caution isn’t unreasonable, but moving to self-insurance would actually protect Wisconsin taxpayers from uncertainty. Taxpayers should be the focus, not protecting the platinum health insurance of government employees.

Obamacare hits the insurance market, and thus taxpayers, in two big ways. The reviled Obamacare Cadillac Tax applies an exorbitant 40 percent tax on all employee benefits exceeding $10,200 annually for an individual, $27,500 for a family.

Sadly, the AHCA healthcare bill that passed the House last week retains the Cadillac Tax, although it pushes off the starting date of the Cadillac tax until 2026. Self-insurance would help mitigate that cost by eliminating the middle man in the current setup.

Then there’s the insurer tax, a special levy charged to private insurance companies that’s tied to the insurer’s premiums collected in the previous year. In 2016, the insurer tax ranged from 1.5 to 3.5 percent, with future rates yet to be decided. As the state’s deputy commissioner of Employee Trust Funds, Lisa Ellinger, pointed out last year, the state pays out about $1.4 billion annually in premiums.

Self-funded insurance systems are exempt from this tax. Quick cocktail-napkin math shows that switching to self-insurance would conservatively save tens of millions on top of the $60 million outlined in the contracts.

Despite ongoing uncertainty about Obamacare, keeping the status quo is precisely the wrong decision. Assuming Obamacare’s taxes are here to stay, seizing the $60 million moment would be responsible management of taxpayer dollars. Keeping the status quo and hoping Washington politicians do the right thing would not.

Instead, legislative leaders are considering “finding” $60 million in savings within the existing system. “We’re not saying no to savings. If we do that we’re going to find a similar amount of savings in some way, shape or form,” said JFC co-chair Rep. John Nygren on Tuesday.

If that’s actually possible, it begs the obvious question: how much taxpayer money has been wasted by not finding these supposed savings years ago?

With most of the arguments against self-insurance out of gas, opponents’ final stand may betray the truth: self-insurance is good policy, but protecting the status quo is even better politics. Or protecting the status quo is better politics for any politician worried more about the next election and less about taxpayers. Unfortunately for taxpayers, just about every politician in Wisconsin fits in that category.

The fact that self-insurance is good policy is evident from how many states and large employers use it successfully.

The likely end result is that Wisconsin taxpayers will get a watered-down half-measure that goes through the motions of saving taxpayer money while keeping the bloated and expensive existing system in place. That’s bad public policy.

March 27, 2017 | Chris Rochester

Yes, Obamacare is Still a Disaster

So, the House GOP’s attempt to repeal and replace Obamacare was unsuccessful. After months of political theater and seven years of opposition to the disastrous healthcare law, their American Health Care Act (AHCA) failed to garner enough votes from the far right and moderate wings of the Republican party to pass with the needed 216 votes.

Lost in all the drama and theatrics, however, is the big picture: Americans are suffering under Obamacare and will continue to suffer “for the foreseeable future,” as Speaker Paul Ryan lamented in a press conference after it became clear AHCA did not have enough votes to get through the House.

Congressional Republicans, President Trump, the House Freedom Caucus – all will come away with political wounds. But the tarnished image and lost political capital that the failure to pass AHCA will inflict on Washington politicians pales in comparison to the actual harm that Obamacare will continue to inflict on average Americans just trying to stay afloat.

One thing is certain: Obamacare is still an unmitigated disaster. Premiums are still spiraling out of control. Sky-high deductibles still make Obamacare insurance plans practically useless. And competition and choice are still on the decline.

In 2017, the average premium increase on the individual market in Wisconsin was 16 percent. In fact, one plan in western Wisconsin costs $51,000 per year in premiums for a couple unfortunate enough to be in their 50s with three children.

Sure, Obamacare subsidizes premiums for those at the lower end of the income scale. But if you happen to occupy the vast swath of America known as the middle class, you’re likely on the hook for the full bill – plus deductibles.

In a report last year that scoured the federal database of 2017 premiums in Wisconsin, the MacIver Institute found that an average family of four would fork over an average monthly premium of $1,609.11 for a platinum plan – $19,309.32 per year – while a mid-level silver plan would cost them $1,297.02 in average monthly premiums, or $15,564.24 per year.

While proponents of Obamacare like to point to premium subsidies for the poor, they leave out a key concern that Americans grapple with: sky-high deductibles. For a top-tier platinum plan in Wisconsin the average deductible is $900 for a family and $450 for an individual.

However, for a mid-level silver plan, the average deductible is $7,015.71 for a family and $3,491.92 for an individual. The average catastrophic plan deductible will be $14,300 for a family and $7,150 for an individual.

Obamacare’s downward death spiral is also forcing insurers out of the market. One-third of counties nationwide have just one insurance provider in the individual market. Last year, two major insurers left Wisconsin altogether.

Economics 101 teaches that robust competition drives down prices. Giving consumers a choice is also a matter of basic fairness.

However, proponents of Obamacare continue their efforts to prop up the law with scare tactics aimed at vulnerable populations.

One “report” put out by Citizen Action of Wisconsin claimed the GOP proposal would cost older premium payers thousands more per year, but it’s a two dimensional analysis in a three dimensional world. The liberal group’s so-called report hinges on cocktail napkin math, simply subtracting the AHCA’s refundable tax credits from Obamacare premium subsidies.

The group also claims out-of-pocket costs would increase, but fail to mention that the AHCA would’ve expanded health savings accounts (HSAs), tax-free accounts from which health expenses can be paid. Healthcare tax credits under the AHCA would’ve gone into HSAs – which an individual would then use to pay for out-of-pocket costs like deductibles. HSAs coupled with the AHCA’s tax credits would have made insurance portable from job to job and accessible to the self-employed and independent contractors.

Obamacare actually put a cap on how much pre-tax money individuals could contribute to an HSA, compounding the problem of the law’s astronomical deductibles. What good is having insurance – even if it’s provided for free at taxpayer expense – if you can’t afford to use it? Why have insurance when the deductible alone will bankrupt you? Perhaps that’s why some Wisconsin hospitals started waiving out-of-pocket fees for lower income patients last year to stem the tide of increasing ER visits by Obamacare recipients.

Let’s also not forget that Obamacare activists like CAW have constantly pushed Wisconsin to follow in the footsteps of Minnesota, which gave Obamacare a big hug, and is now paying the price. The Minnesota Mistake was brought into focus last year when the state was forced to shovel more than $300 million – in one year alone – into a rescue plan to help middle class Minnesotans absorb a 60 percent Obamacare premium increase. Minnesota practically begged insurers to stay in their market to stave off a complete collapse of the market.

The giant folly of the healthcare debate is that prognosticators like CAW and Obama himself constantly conflate health insurance coverage with actual health care. Conservative health reform, of which the AHCA was supposed to be just the first of several phases – introduces market forces into healthcare. When there’s price transparency, someone seeking care is actually able to shop around for better prices.

A healthcare system where providers actually compete over price conscious customers would have the same effect as any other competitive marketplace – rapid innovation, increased efficiency, and reduced costs. As Speaker Ryan points out, that very phenomenon is demonstrable in the cost of elective LASIK eye surgery, the price of which has actually dropped over the past 15 or so years – as has the price of flat screen TVs, smartphones, and anything else sold in an actual free market.

The GOP’s failure to pass AHCA is a setback. But, it is not a political setback like all the talking heads want you to believe. It is a setback because the death spiral that is Obamacare continues unabated and the American people continue to suffer because President Obama lied to them. If you like your health insurance, you will be able to keep it, and the ACA will bend the cost curve. Obama’s lies live on.

But it’s important for lawmakers to keep their eye on what’s important – Obamacare is a disastrous big government boondoggle that will cost taxpayers a trillion dollars in new taxes and threatens to collapse entire individual insurance markets.

As President Trump said on Friday after the AHCA was pulled, Obamacare will inevitably “explode.” But lawmakers can’t wait around for that to happen and then try to blame the Democrats. A solution that can pass the House and Senate and be signed by the president must be found.

March 14, 2017 | Chris Rochester

FULL REPEAL & REPLACE or OBAMACARE LITE?

Speaker Paul Ryan and House Republicans rolled out their plan to repeal and replace Obamacare last week, making the legislation available for all to see – a stark contrast with the Democrats’ approach to Obamacare (remember, we had to pass the bill before we could see what was in it).

The repeal of Obamacare was bound to be controversial, and now politicians and pundits are in a heated debate over the House bill, the American Health Care Act (AHCA).

On one side, Speaker Ryan and House leaders assert that the AHCA is a vital part of finally getting rid of Obamacare and replacing it with patient-centered healthcare. The bill is the first piece of a larger three-part plan to transform healthcare in America, Ryan explained in an interview with Vicki McKenna last week. The second part is a series of individual free-market reform bills to be passed separately as a result of limitations imposed by Senate rules.

The third part is an overhaul of Obamacare regulations by President Trump’s Department of Health and Human Services. As we reported earlier, much of Obamacare was created by President Obama’s HHS via the rule making process and can be undone using the same process, without legislation.

On the other side, opponents argue the law is not a full repeal of Obamacare because it leaves in place a number of Obamacare’s regulations and taxes, particularly the “Cadillac Tax” on high-value employer sponsored health plans. The bill’s failure to completely abolish Obamacare will make the “death spiral” of sicker enrollees and increasing premiums even worse, opponents say. They also argue that the AHCA’s healthcare tax credits amount to a new entitlement.

Senator Rand Paul, a leading opponent of the AHCA who coined the nickname “Obamacare Lite”, made his case on Fox News last week.

Regardless of where you stand on the debate over the AHCA bill, one thing is certain – Obamacare is a disaster that must be undone one way or another:

  • Premiums have spiraled out of control – in the most recent round of premium hikes, the average increase was 25 percent.
  • Deductibles for those on Obamacare plans are astronomical – $6,000 for an individual low-cost plan in 2017. What good is health insurance if you can’t afford to use it?
  • Taxpayer-funded CO-OPs created under Obamacare have fallen like dominoes – only four out of the original 24 remain in business.
  • Obamacare’s taxes drain a trillion dollars out of the economy over ten years.
  • Obamacare is a fiscal disaster, costing $1.76 trillion according to the CBO, more than triple the initial estimate.

To help cut through all the confusion, we decided to give both sides of the debate an opportunity to make their case side-by-side. On one side, Speaker Ryan offers an overview of the AHCA legislation in USA Today. On the other, Daniel Horowitz excoriates the bill as “RINO-Care” in Conservative Review.

MacIver News Service | January 31, 2017

Former Gov. Thompson: Most of Obamacare Can be Undone by New HHS Secretary

[Madison, Wis…] The vast majority of Obamacare could be swept away by the same bureaucratic rule-making process that the Obama administration used to create it, former governor Tommy Thompson told a crowd in Madison on Tuesday.

Thompson, who was Secretary of Health and Human Services under President George W. Bush, said that 70-80 percent of the law was actually written after it passed Congress because it relied on countless “the secretary shall” clauses as a replacement for actual legislative language.

Those fill-in-the-blank sections allowed much of Obamacare to be created via the HHS rule-making process after the bill became law, but they will also allow much of the law to be dismantled in the same way.

While a large portion of the law can be reversed by the HHS secretary, Thompson added that other significant pieces of the law will need to be tackled by Congressional Republicans, a caucus he said is deeply divided over how to proceed. Congress will have to decide on whether to immediately repeal Obamacare’s trillion dollars in taxes and the individual mandate, and decide on a replacement plan – all points of contention within the GOP ranks.

Given a choice between immediate, full repeal of Obamacare and all its taxes and a more gradual, piecemeal approach, Thompson was confident it will eventually be the latter because of political realities, including disagreement among Republicans on whether to immediately repeal all of the health law’s taxes.

“I think getting the Republicans together is going to be a bigger problem than finding the eight Democrat senators,” Thompson predicted. Outside of a process called reconciliation that will be used to repeal certain budget-related aspects of Obamacare, the GOP will need to find enough Democrats for a filibuster-proof 60-vote margin on other reforms like selling insurance across state lines, encouraging more consumer-oriented insurance plans, and reforming state insurance exchanges.

The Republicans currently hold 52 seats in the Senate and the tie-breaking vote of the vice president.

Attracting Democrat votes on smaller bills that chip away at Obamacare might be a political necessity, Thompson said, adding that reaching a 60-vote majority on smaller bills might be easier than it seems because of the number of Democrat senators up for re-election in 2018 in states that Trump won.

Thompson also heaped praise on President Trump’s nominee for Secretary of HHS, Tom Price. An orthopedic surgeon by trade and former chair of the House budget committee, Thompson said Price understands healthcare and would “do a very good job” in the role Thompson once held.

Thompson said Obama administration HHS Secretary Kathleen Sebelius was put in an untenable situation. “She really didn’t understand healthcare,” but was in charge of implementing the massive healthcare law. “You won’t have that with Tom Price because he understands it.”

Asked about Senate Democrats’ walk-out and boycott of Price’s confirmation hearing earlier in the day, Thompson said, “Sooner or later they’ve got to come back.” He joked that he was looking at Sen. Tim Cullen, who was one of the Senate Democrats who fled the state for Illinois in a failed effort to stop Act 10 six years ago.

Thompson added that, despite the stakes, House Speaker Paul Ryan and other congressional leaders fully understand the opportunity for conservative reforms that a Republican White House and Congress presents. “They are dedicated not to miss this opportunity to change the direction of the country.”

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