This study points out that Healthy Wisconsin is not so much a solution to the problem as it is the creator of even bigger problems that will dwarf the current crisis we have in health care.
Wisconsin is home to the broadest health care reform proposed anywhere in America. The initiative— dubbed Healthy Wisconsin— was introduced two times by Democratic leadership in the Wisconsin State Senate during the current legislative session. While unsuccessful to date, they have vowed to bring it back in 2009, when there is a real possibility that Democrats could control both houses of the Legislature. Wisconsin Democrats have explicitly made Healthy Wisconsin the key campaign issue in their attempt to gain full control of the Wisconsin Legislature.
We are told by the plan’s advocates that Healthy Wisconsin is simply insurance reform. “We didn’t want it where it was a government-run type of system,” said Senator Erpenbach, the chief sponsor. “We wanted to keep it in the private sector.”
However, as this report details, Healthy Wisconsin would turn every aspect of the health care system over to state government. Government involvement in health care would not only be likely, it would be required. As with every other aspect of the state budget, the Legislature will have to set the level of payroll tax that supports the plan and establish a global budget for the plan. Further, given that the tax will be by far the largest levied by state government, and that spending on Healthy Wisconsin will exceed the entirety of the state’s general fund budget, it is inevitable that health care finance and spending will be prominent political and campaign issues.
While proponents suggest that government’s involvement will cease the day the program is enacted, that simply cannot be the case. State government has shown no predisposition to keep its hands off of “independent” programs. It is likely that the Healthy Wisconsin program would have no more independence than the University of Wisconsin system. When legislation creating the UW system was passed in 1974 the responsibility to manage the system was assigned to the Board of Regents, including responsibility for setting tuition. Over time, state government has withdrawn much of the UW’s independence, now dictating tuition levels, the ground rules for the transfer of credits, and even the start date for the fall semester. Similarly, when the Healthy Wisconsin legislation is signed, state government will exercise its legislative oversight prerogative.
What would be the likely focus of the oversight? In a phrase, cost containment. Such is the case in England, France, Canada and every other country with a single-payer health care system. Government faces a constant struggle to contain health care spending; to contain taxes. These countries have controlled spending by limiting capital expansion, rationing the use of high-cost new technology and containing the salaries of health care workers. This is the reality of a government-sponsored health care system, which the Senate leadership wants to import into Wisconsin.
It is inevitable that the Legislature would, soon after passage of Healthy Wisconsin, be faced with an increase in the payroll tax that supports the initiative. It turns out that Healthy Wisconsin is founded on a fragile set of actuarial assumptions that suggest that the growth in health care costs can be brought closer to the rate of growth in wages. If that cannot be accomplished, the program will face a shortfall of between $4.79 billion and $10 billion by 2017. The promises of Healthy Wisconsin will be tested early and often in the halls of the State Capitol. Will they lower provider and hospital reimbursement rates, moderate capital projects and delay approval of expensive new drugs and medical technology, expand patient wait times or limit access to expensive specialists? These are the decisions that will rest in the hands of the Governor and the Legislature because, at its heart, Healthy Wisconsin will be created and funded by government and will be ultimately subject to oversight by government.
The report also outlines how the creation of a Healthy Wisconsin Trust Fund would impact the state budget. While no one is discussing it, it is likely that whenever the state budget is short of general fund revenues, the Legislature could shift individuals from Medicaid to Healthy Wisconsin, thus saving state general tax dollars. The Legislature has a history of moving people off of Medicaid and BadgerCare as a way to manage the state budget. This type of budget management would be more likely in the future since Healthy Wisconsin would provide a safety net.
Finally, the report highlights a disturbing recent trend in Wisconsin budgeting. The Governor and the Legislature have increasingly shown a willingness to transfer funds from segregated and trust funds in order to balance the general fund budget. In recent years, they have transferred $1.45 billion from the Transportation Fund and $200 million from the Injured Patients and Families Compensation Fund. The $15.2 billion Healthy Wisconsin Fund would have several hundred million dollar reserves that would certainly be available to accommodate future shortfalls in Wisconsin’s general fund.