Continued Debate over a Slight OCI Technical Change Is Telling

Although officials in the Walker Administration have said on a number of occasions that they plan to implement the Health Insurance Exchanges required by the Affordable Care Act (ACA), we still haven’t seen the Exchange legislation that they said we could expect in the fall. Whether they still plan to carry through on their commitment to introduce such legislation is no longer clear.

One of the few visible signs of activity relating to ACA implementation has been Assembly Bill 210, which is the derailed bill that was developed by the Office of the Insurance Commissioner (OCI) and would fold into state law several health insurance industry reforms in the federal Affordable Care Act (ACA). The debate relating to that bill has taken a couple of surprising twists in recent weeks, as the Walker Administration approved and then rescinded an emergency rule to put a key part of AB 210 into place.Over the past few months on this blog, we’ve been keeping you updated on the dialogue around AB 210 and the related emergency rule issued by OCI (see our Oct. 10 post about the bill and our Nov. 16 post about the OCI rule). After a few amendments were adopted, AB 210 passed in the Assembly with strong Republican support. However, it has been blocked in ta Senate committee because of the opposition of committee chair Frank Lasee.

As a fallback plan, the Insurance Commissioner recently approved an emergency rule that adopted the provision in AB 210 that has enjoyed the strongest support from OCI and the insurance industry – making state and federal law consistent with respect to external review (independent reviews of consumer complaints). In a conflicting move this week, Governor Walker directed OCI to withdraw the emergency rule! The Governor justified the reversal on the basis of a concern that the rule might weaken the challenge to the ACA’s constitutionality, which will be heard in the Supreme Court this spring.

Until this week’s about-face, the Governor had described his position on state ACA implementation as, follows: “States are left with a very difficult decision: do nothing and cede regulatory authority for Wisconsin’s insurance industry to President Obama and the federal government; or make very slight technical changes to preexisting Wisconsin laws, or administrative rules, to prevent the federal government from taking over our state’s insurance industry” (emphasis added). The repeal of the OCI emergency rule signals that Governor Walker is choosing the former option.

The emergency rule was simply a slight technical change to preexisting Wisconsin law, but some see it as an implicit acceptance or endorsement of the ACA. Rigid opposition to that law seems to be trumping prior judgments of the Administration, even in the case of a rule that made relatively minor changes and had strong support among insurers. The shift in the Administration’s position on the emergency rule raises questions about whether the Governor now plans not to implement further and broader health care reform provisions in Wisconsin, at least until the Supreme Court weighs in.

Sara Eskrich and Jon Peacock