Over 180,000 Wisconsinites at Risk of Losing their Marketplace Insurance Coverage
Two years ago, Governor Walker and GOP legislators decided to cut in half the income limit for parents’ eligibility for BadgerCare – reducing it from 200% of the federal poverty level (FPL) to 100% of FPL. They justified that choice on the basis that people over the poverty level could get affordable health insurance through the new health insurance marketplace established by the Affordable Care Act.
At the time, we raised many concerns about that choice, but an even larger problem we didn’t anticipate is now looming – the possibility that the U.S. Supreme court will end the premium tax credits that subsidize coverage in states relying on the federal marketplace, rather than using a state-run insurance market.
As a result of the contraction in eligibility, about 63,000 people lost their BadgerCare coverage in 2014, and Wisconsin has more at stake than most other states when the U.S. Supreme Court decides whether to restrict eligibility for marketplace subsidies. A new WCCF report examines what a ruling limiting the federal subsidies would mean in our state if lawmakers don’t take corrective action, and it analyzes the geographic distribution of the people who signed up for marketplace plans.
The case in question, King v. Burwell, which is expected to be decided in the next couple of weeks could be a serious blow to the Affordable Care Act (ACA) and to health care access in Wisconsin. It could eliminate insurance coverage for 183,000 Wisconsinites who have purchased private plans through the federal marketplace. In addition, because eliminating those plans would drive up costs for other individual plans, the Urban Institute estimates that a total of about 247,000 Wisconsinites would become uninsured in 2016.
Our analysis found that the health insurance marketplace is especially important in rural areas of the state, where the percentage of people with marketplace plans is typically about twice the participation rate in urban parts of Wisconsin.
“Losing the marketplace subsidies would push many people in northern Wisconsin back into uninsured status,” said Reba Rice, CEO of the NorthLakes Community Clinic, which serves 11 northern counties. “As a result, they would not only lose the services and peace of mind that insurance provides, but would also delay care and enter the health care system in ways that increase costs for taxpayers.”
The average premium tax credit in Wisconsin is $315 per month, which is the 8th highest nationally (among the 34 states relying on the federal marketplace) and almost 16% above the national average of $272. Without the federal subsidies, the cost of marketplace plans would grow by an average of 252% in Wisconsin.
We will follow up later with information about steps Wisconsin could take to avoid a large coverage gap and a huge increase in the number of uninsured state residents.
The new WCCF report can be found here.
Jon Peacock
