By Jack E. Lohman
Healthy Wisconsin is on everybody’s lips, primarily because healthcare is into everybody’s wallet. It’s getting worse, but doesn’t have to be that way.
HW changes the way medicine is paid for; not the way it is provided. Its only problem now is political.
Healthy Wisconsin strengths:
- * Its biggest change is in the structure. Rather than employers paying a middleman insurance company, they instead pay a flat 10.5% percentage of wages (which replaces the 15% many are now paying for employee health insurance). That’s a 4.5% savings, about $2 billion saved for employers.
- * Employees would pay 4% of wages, which would be offset by a 16% increase in benefits, such as adding limited vision, dental for children, mental parity, pharmaceuticals, and the extension to family coverage for all. Complete portability is provided when changing or losing jobs, and pre-existing diseases are a thing of the past.
- * Employers would no longer be involved in heath care, and Wisconsinites are no longer obligated to take an employer plan or even a family plan. Every family member can make their own choice between either a health care network (HCN) or the traditional fee-for-service (FFS). Every family is covered, though none are locked into a family plan.
- * Doctors and hospitals remain private and send their bills to a central payment administrator rather than to the 450 statewide insurance companies (or 1500, if we allow cross-border insurers). This drastically reduces their billing overhead and these savings are included in the total $1.8 billion projected.
- * The systemic changes eliminate the costs that add nothing to healthcare, like insurance broker commissions, actuarial costs, costs for cherry-picking and gatekeeping, high executive salaries and the ever-rising shareholder profits. Even the insurer’s high costs for lobbying and campaign contributions to politicians that were passed on to the patient are eliminated under Healthy Wisconsin. These are all gone, though it also explains the massive opposition from the insurance industry and their politician supporters.
- * HW provides major savings to most businesses and therefore fewer will outsource jobs to countries that have no employer contribution for healthcare. More businesses will open, remain open, and relocate to Wisconsin as a result. The Wal-marts and McDonalds of the world will now start paying their fair share, but few taxpayers will object to that.
- * While some small business owners objected to the earlier version of HW, the new version provides a three-year phase-in period, which should be quite palatable. As well, a cap of $102,000 in wages taxed has been placed on two-earner families.
In spite of the frivolous scare tactics used by the proponents of a status quo approach to health care, Wisconsin would not become a magnet for the unemployed or immigrants. Most already have free Medicaid coverage in their own state, thus relocating families is a foolish option.
No matter how important the HW proposal is to the people and businesses in Wisconsin, there remains an insurance industry that wants to continue drawing profits from the medical field, and politicians who receive their contributions. Hopefully they will all realize that as HW improves the state’s economy, other insurance markets will emerge and the state will grow accordingly.
Prior to retiring four years ago I owned a company with 70 employees in four states (40 in Wisconsin). Had Healthy Wisconsin been in effect at that time, I would have indeed closed my offices in three states and moved the jobs to Wisconsin.
Importantly, a year after selling my company the buyer did move offices. They closed Wisconsin and moved the jobs to the east coast. Had HW been in effect at that time, I seriously doubt that would have happened. Instead I think they would have moved their other offices here instead.
How many more jobs are we losing because of our high health care costs?
My guess is, a lot.