With Republican lawmakers in Wisconsin set to take up a bill today that would prohibit health insurers from denying people coverage because of their pre-existing conditions, the most important question remains: Would the requirement work if the Affordable Care Act were struck down?
Insurance experts—among them university professors and the health insurance industry’s national trade group—contend it would not. They cite states that imposed and then abandoned similar requirements before the Affordable Care Act became law.
Without the Affordable Care Act, prohibiting health insurers from denying people with pre-existing health conditions would result in much higher premiums and fewer insurance companies selling insurance, said Scott Harrington, a professor of health care management and insurance and risk management at the Wharton School at the University of Pennsylvania.
“You will end up with an extremely unbalanced risk pool where the bulk of people who are willing to buy coverage in the individual market would be relatively less healthy than average—and that would push up premiums dramatically,” Harrington said.
“So it might sound well in principle and people probably will say it is great to do this,” he said, “but in reality, if the law is declared unconstitutional and nothing is done at the federal level, this would be a Band-Aid at best.”
Understanding why the Republican bill would not work requires a basic understanding of health insurance.
The Affordable Care Act provides subsidies to help offset the cost of insurance and, until this year, required people to buy health insurance or pay a penalty.
“What that helped achieve is getting a significant number of relatively healthy people to buy coverage, which helps offset the cost of the sicker people who are more likely to buy coverage,” said Harrington, an adjunct scholar at the American Enterprise Institute, a conservative think tank in Washington, D.C.
One of the reasons premiums have soared for health insurance sold directly to individuals and families under the Affordable Care Act is that not enough healthy people have bought insurance to offset the cost of people with health problems.
If the law were struck down, even fewer healthy people would be likely to buy health insurance.
“Without healthy people signing up, you are going to have premiums skyrocket way beyond what they are today,” said Cynthia Cox, director of the Program for the Study of Health Reform and Private Insurance at the Kaiser Family Foundation.
That’s because people with health conditions, who expect to have high medical bills, would continue to buy coverage. And health insurers would have to cover them.
That, in turn, would increase rates even further. And with each passing year, more healthy people would be priced out of the market, leaving even fewer people to help offset the cost of covering people with high medical bills.
“The only people who are willing to pay that higher premium are going to be people who are very sick,” Cox said.
The end result is most health insurers would leave the market.
That’s what happened in states such as Kentucky and Washington that required insurers to cover pre-existing conditions before the Affordable Care Act came to be.
“Generally, they ended up with high premiums and very small participation in those markets,” Harrington said.
New York required health insurers to cover pre-existing conditions before the Affordable Care Act, and Cox said premiums there were dramatically higher than they are now.
Leanne Gassaway, senior vice president of state affairs for America’s Health Insurance Plans, the largest trade group for health insurers, was more blunt:
“Their market was a complete disaster before the Affordable Care Act,” Gassaway said last month.
When asked how the bill would work without the Affordable Care Act’s subsidies, Rep. Kevin Petersen, R-Waupaca, the bill’s co-author, said the state Legislature has imposed insurance mandates for autism treatments, cochlear implants and oral chemotherapy without first allocating funding.
“If you really look at pre-existing conditions, it’s another mandate that these have to be covered,” Peterson said. “No different than autism has to be covered. No different than cochlear implants or any other mandate.”
Those mandates, though, applied to a small number of people—and, in the case of oral chemotherapy, only to people who already had insurance.
Health insurers face considerable differences in costs if they are required to cover someone who is diagnosed with cancer in November and then buys health insurance in December. That’s partially why health insurers would deny coverage to people with pre-existing conditions before the Affordable Care Act.
GOP Rep. Mike Rohrkaste, who works in human resources, said the costs of covering people with pre-existing conditions have already been built into the cost of health plans.
“So they know what those costs are,” he said. “There’s many reasons why the ACA had raised costs that had nothing to do with pre-existing conditions clauses, so I think to try to say that this is going to be not able to be paid for—I just don’t think that’s the reality of what will happen.”
That the cost of covering people with pre-existing conditions is built into rates is true—but so is the expectation that healthy people eligible for subsidies under the Affordable Care Act will buy health insurance and help offset those costs.
Those subsidies will no longer exist if the federal law is declared unconstitutional—as 20 states, including Wisconsin, are seeking in a lawsuit filed a year ago in Texas.
Republican lawmakers backing the bill to ensure access to coverage for people with pre-existing conditions also support the lawsuit and overturning the Affordable Care Act.
The Republican-controlled Legislature also passed a law barring Gov. Tony Evers and Attorney General Josh Kaul from withdrawing Wisconsin from the lawsuit.
Protections for those with pre-existing conditions—the most popular provision in the law—was a major issue in the last campaign and caused Republican candidates, including former Gov. Scott Walker, no small amount of grief.
Health insurers have kept a relatively low profile on the bill.
“You are going to be painted in a very dark way—especially if you are an insurance company—if you came out and say we don’t want to cover people with pre-existing conditions,” Harrington said.
UnitedHealthcare and Anthem Blue Cross and Blue Shield in Wisconsin declined to comment on the bill. The Alliance of Health Insurers, the state trade group that represents primarily national health insurers, did not respond to a request on its position.
The Wisconsin Association of Health Plans, the trade group that represents primarily health insurers based in Wisconsin, called the bill a “strong starting point toward a state-based solution.”
But Tim Lundquist, director of government and public affairs for the association, also said at the Jan. 15 hearing on the bill that more work would need to be done to keep premiums affordable if the federal law were struck down.
WPS Health Insurance registered to lobby against the bill, while Common Ground Healthcare Cooperative registered in favor.
Evers, who supports the Affordable Care Act, has signaled that he would sign a bill that provides the same provisions as the federal law.
Unlike the Affordable Care Act, the state Assembly bill would not require health insurers to cover specific benefits, such as prescription drugs, or limit annual or lifetime out-of-pocket expenses.
Without those provisions, health insurers could sidestep any requirement that they cover pre-existing health conditions by not covering costly drugs or refusing to cover people who have had high medical bills over their lifetimes.
If a health insurer didn’t want to attract people with high medical costs, for instance, it could exclude expensive specialty drugs from its benefits or not cover drugs at all, Cathy Mahaffey, chief executive officer of Common Ground Healthcare Cooperative, said in September.
To ensure that people with pre-existing health conditions have access to insurance, Mahaffey said, the state would have to mandate that health insurers cover certain benefits.
Putting more requirements on insurers could bring opposition to the Assembly bill in the state Senate, where previous attempts to impose mandates have been unpopular with Republicans.
That, though, is separate from whether the bill actually would work.
Some south-side Janesville residents have clamored for a full-size grocery store to fill the former Pick ‘n Save building on Center Avenue.
The plan commission put a damper on that hope Monday night when it voted 5-1 to rezone 12.9 acres of the 18.6-acre commercial site to light industrial. Jens Jorgensen voted against the move, and Carl Weber was absent.
The action still requires full city council approval, but even if it passes the council, not all is lost for those who want to see a new grocery store at the site. The remaining commercial space could eventually attract a smaller grocer to face Center Avenue.
Light industrial zoning could result in a wide range of manufacturing uses from assembly to warehousing, but it does not cover heavy manufacturing uses, senior planner Brian Schweigl said.
The building has been empty since Pick ‘n Save moved out in November 2017, leaving the south side without a major grocery store. Janesville’s economic development office contacted nine regional grocers, but none was interested in the site, according to a city memo.
Local developer Jim Grafft and his family bought the property in January 2018 through their development group, 1717 4GK. They requested the zoning change because they thought the 137,000-square-foot building was more viable as an industrial site, Grafft said Monday.
Planning director Duane Cherek said if the area abutting Center Avenue—now a parking lot—was redeveloped into a few commercial buildings, it would block the view of the old Pick ‘n Save and diminish its commercial appeal for customers.
Changing the area of the property set farther back from Center Avenue to industrial could lead to a revived manufacturing campus because the former JATCO site is adjacent and the former GM plant is nearby. A new Pick ‘n Save tenant would join the existing Fab Masters metal fabrication plant, also owned by the Graffts, just north of the old grocery.
Mike Venable, a broker with Commercial Property Group, which is marketing the property, said there is no plan to connect to the JATCO and GM sites, but the plan commission discussed the possibility of extending either Conde Street or Joliet Street east through the JATCO property to reach South Jackson Street.
The plan commission also discussed extending rail access to the former grocery, although neither that idea or the extended street idea have any firm timeline.
Grafft told the commission he hoped new construction along Center Avenue would include a grocery store but that the old Pick ‘n Save made the most sense as a light industrial property, possibly something in the technical field that requires air conditioning and a clean workspace. The building already has air conditioning. It’s possible it could eventually be divided to allow for multiple tenants, he said.
The commission approved the rezoning with a modification to move the property’s truck entrance and exit to Conde and Lafayette streets. That would make use of an existing stoplight at Conde Street and Center Avenue.
Only one resident, Judy Adler, spoke against the zoning change during the public hearing, saying an industrial tenant would do nothing to beautify a tired-looking corridor on the south side.
Residents will have one more opportunity to voice opinions at next week’s Jan. 28 council meeting, which will include another public hearing and possible final council approval.
The group of members who has sought information and transparency from the YMCA of Northern Rock County is asking the Y’s board to elect several additional board members “as soon as possible.”
In a letter obtained by The Gazette, Janesville attorney Larry Barton writes that a group of four YMCA members he’s representing wants the Y’s board to elect four more board members to “affirm the good intentions of the existing board members” and “reassure Y membership, employees and the public of a positive and new direction by the YMCA.”
Barton’s letter, dated Jan. 20, comes from the same group of Y members who earlier this month threatened to sue the Y for access to financial and governance documents.
“We want a board that’s going to be responsive, transparent, open and accountable,” Barton told The Gazette on Monday.
The group’s request comes as the Y’s board announced last week it had hired Milwaukee law firm Foley & Lardner to help conduct an “investigation” into “concerns” over transparency and governance.
Barton’s letter is addressed to an attorney at Foley & Lardner. He said the Y’s board in recent weeks has plummeted from 14 members to nine.
Barton said an election of additional Y board members would show that the board is serious about members’ concerns and calls for more accountability.
“We’re very concerned about various things that have taken place, frankly, over a long period of time. We just simply can’t keep doing that anymore,” Barton said.
Y board President Steve Yeko in a written statement on Monday acknowledged resignations last week by former board presidents Jeff Jensen and Jason Engledow. The Y on its website in recent months has shown a board membership of 14 people.
On Friday, the Y board elected Yeko as new president.
Three former board members claim that in 2017 and 2018, Engledow terminated them from the board unilaterally and without a board vote, something they said the Y’s bylaws don’t allow. The former board members say they were ousted after they had asked pointed questions about the Y’s finances and governance.
In a response to a Gazette inquiry, Mueller Communications, a Milwaukee firm the Y board hired last week to handle communications on the investigation, confirmed board members Shannon Huot, Emily Robinson and Paul Schieldt also resigned recently. Yeko indicated board resignations have left board officer positions open.
The Y’s bylaws require a board of at least 11 members, but Barton said he believes the Y under law can function with fewer members. He said his group believes the board should have new members added, particularly because it has just launched an internal investigation into member concerns.
Barton is a former Y board member and board president who oversaw an expansion to the Y in the 1980s. He is representing banned Y member Paul Murphy, along with three others, Eric Beck, Brian Donnelly and Rob Theisen.
Barton said the group is still pressing the Y to fulfill a request for financial statements, board meeting minutes and other documents.
He said they intend to provide the board with a list of several board candidates the group thinks have expertise and “integrity.” Some of the candidates, Barton said, are the four he’s representing, but he said there are others the group considers more viable.
Barton said it’s also legally possible the three former board members who claim to have been dismissed by Engledow might actually still have seats on the board.
He said the group’s goal is not to upend the board’s structure or usurp its authority.
“It is not our intention to load the board with any rabble rousers or people who are trying to raise Cane. Our interest is to get the Y back on its feet on solid ground and doing the right things,” Barton said.
In the Y board’s statement Monday, Yeko wrote that the board intends to add additional board members. Yeko wrote the board plans a meeting later this week and intends to discuss Barton’s letter and its call for a board member election.
Yeko in a written statement last week did not describe the scope or direction of the “investigation” it hired Foley & Lardner to assist with.
Mueller Communications in an email Monday acknowledged YMCA CEO Tom Den Boer has “engaged with an outside attorney.”
On Monday, Barton shared with The Gazette a Jan. 15 letter he obtained last week addressed to Den Boer from Colin B. Good, a Madison attorney who focuses on employment law.
In the letter, Good lays out an opinion on the Y board’s ability to make “personnel decisions involving the CEO” with fewer than the 11 board members its bylaws require.
Good wrote that while the board’s executive committee can “act upon all business requiring immediate attention during intervals between regular meetings of the board,” he wrote the Y’s bylaws determine that “it is the full board of directors which is responsible for oversight of the CEO position” and that “any measures affecting the CEO position should be properly considered by at least 11 board members.”
Good in the letter doesn’t make it clear what kind of “personnel decisions” or “measures affecting the YMCA CEO” he was referring to.
Barton said he doesn’t have access to Y board minutes or meeting packets. Barton said the letter from Good to Den Boer was “hand-delivered” to him by another person last week.
A Gazette reporter’s call on Monday to Hawks Quindel, the Madison law firm stamped on Good’s letter, immediately went to voicemail.
Beverly “Bev” K. Bird
Laura L. Brockner
Debra J. Hanson
Roland Glen Lettman
Earl Victor Martin
Karen R. McConnell
Orpha P. McKeown
Jeanne Annette Morrison
Linda C. Roberts
Robert B. Roehl
Orlin E. Schole
Mardella “Mardy” Simes
Norbert A. Stone