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Health Groups Urge Caution As State Considers Self-Insurance

250K Public Employees Would Be Affected By Switch

By
Morgan (CC-BY)

Several health care groups around Wisconsin are asking Gov. Scott Walker and key legislators to consider the possible negative impacts of changing how the state insures some 250,000 public employees.

Earlier this year, Walker asked the Group Insurance Board, which oversees health insurance for Wisconsin’s state and local government workers, to look at a potential switch to a so-called self-insurance model where the state would pay medical claims directly.

In a letter sent this week to the governor and members of the Wisconsin Medical Society, Wisconsin Hospital Association, and Wisconsin Counties Association. 14 health care organizations advised against such a change.

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Currently, employees are covered by 17 health maintenance organizations, more commonly known as HMOs. Some experts warn switching to a self-insurance model could reduce the number of insurers and would leave the state to assume the financial risk of insuring workers.

The Rural Wisconsin Health Cooperative was one of the groups that signed the letter. The cooperative’s advocacy director, Jeremy Levin, said less competition could mean higher costs and fewer choices, “because we’ve seen some of the larger players don’t always have the networks of providers in rural areas that are as strong.”

Any decision on self-funding would have to be approved by the Joint Finance Committee. Consultant reports differed on whether the change would save the state money or end up costing it more. One report estimated savings of $42 million annually. Another said the state could end up spending $100 million more a year.

Walker spokesman Tom Evenson said the governor, “appreciates this input and will take these concerns into consideration. In the end, we will move forward with a plan that is best for Wisconsin.”

Some of the other groups signing the letter to Walker included the Wisconsin Medical Society, Wisconsin Hospital Association, and Wisconsin Counties Association.