It is the best of times, it is the worst of times.
And for neighboring states Minnesota and Wisconsin, it depends which side of the state line an American resides.
Although the two share a state line, Wisconsin premium rates are up to 99 percent more expensive than Minnesota’s— a staggering difference that would seem like their citizens are from two different countries under different health care systems.
However, that is not the case at all.
Rather, both states have health care systems under the Affordable Care Act (ACA), yet the decision to expand Medicaid as a portion of the law was declined by state government officials in Wisconsin. Therefore, drastic prices differences exist for these Americans depending on their home state.
A report released by Citizen Action of Wisconsin stated on average, the premium rate for a Silver plan in Minnesota is $192, while its neighbor charges an average of about $344 for the same plan—that’s 79 percent higher. The average premium rate for the Bronze plan in Minnesota is about $144, while in Wisconsin the average for the same plan is $299— that’s 99 percent higher.
The report continues to state that “Wisconsin health insurance exchange premiums for single coverage will be on average 79 percent to 99 percent higher than premiums in Minnesota, before tax credits are applied. That is a difference of over $1,800 a year.”
It also found that “Wisconsin’s rates are not just higher than Minnesota’s, they’re 21 percent higher than the average across 34 states for which the federal government released detailed premium data.”
Such dramatic gaps in premium rates can be traced to the implementation strategies each state has adopted in the rollout of the ACA.
Minnesota welcomed the ACA with the tools provided by the federal government to offer more affordable insurance plans to its residents. The state also has its own online market place where consumers can browse and purchase insurance.
Robert Kraig, the executive director of Citizen Action of Wisconsin told Capitol Times, “Minnesota used rate review to challenge all insurance premiums that were excessive based on underlying medical costs.”
These reviews have lowered Minnesota’s rates by 37 percent.
This more aggressive approach has made a major difference in reduced costs in comparison to Wisconsin’s hands-off approach.
Wisconsin Governor Scott Walker (R) opted to reject the expansion of Medicaid and refused to implement review of health insurance rates.
Wisconsin’s Deputy Insurance Commissioner Dan Schwartzer told USA Today, “We let them best each other up versus us beating the insurer up. Let them beat each other up being competitive against each other.”
A Politico article describes Walker’s actions as, “his own plan on his rejection of Obamacare’s Medicaid expansion. Instead, he’s taking nearly 80,000 people off the state’s generous Medicaid program and encouraging them to join the Obamacare insurance exchange, where they can get federal subsidies. That would, in turn, make room to extend BadgerCare, as Medicaid is known there, to poorer people.”
A LaCrosseTribune post Walker describes his approach by saying, “I want to have fewer people in the state who are uninsured, but along with that I’d like to have fewer people in the state who are dependent on government.”
Wisconsin’s decision to reject the extra federal Medicaid dollars also plays a key role in the high health care premium rates.
Citizen Action of Wisconsin made the point that “Wisconsin has the opportunity to bring down rates by accepting enhanced federal Medicaid funds…[and the] rejection of state-based exchange strip policymakers of addition tools for moderation health insurance rates.”
The author of Minnesota’s implementation law, State Representative Joe Atkins (D), commented in an interview, “The first motivation is I didn’t want the federal government imposing one on us. Quite frankly, I expected we would have lower rates if we did it ourselves. And finally, when one has a problem, I prefer to dial a 651 area code rather than a 202 area code.”