Walker opposes his political backers and refuses to create state health exchange

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Gov. Scott Walker announced on Nov. 16 that Wisconsin will not set up a virtual marketplace connecting consumers with private health insurance plans, joining other Republican governors in ceding control of their states’ health plans to the federal government.

Walker’s decision was not a surprise given his and the GOP’s long opposition to the Affordable Care Act. But a wide array of groups that have supported Walker, including the state’s influential chamber of commerce and manufacturers’ association, had urged him to have Wisconsin establish its own exchange rather than turning over control to Washington.

Walker said in his letter to the Obama administration that the risks to Wisconsin taxpayers once federal funding dries up were too great.

“In Wisconsin, we have been successful in providing health insurance coverage to over 90 percent of state residents without the creation of an exchange and absent federal regulation,” Walker wrote in the letter to U.S. Health and Human Services Secretary Kathleen Sebelius.

In a separate letter explaining his decision, Walker said no matter who sets up the exchange, the federal government will make all the decisions and the product will be the same. He also said the law does not allow for a “uniquely Wisconsin option.”

“As a result of our decision, Wisconsin taxpayers and consumers will have access to the same products without the risk of having an extra burden placed on them at a time when they can least afford it,” Walker said.

By not setting up its own exchange, however, Wisconsin will lose control over several key decisions on how consumers will be able to compare insurance plans, what plans can be sold through the exchange, what the plans must cover and their cost.

Additionally, the exchanges will offer coverage to people buying in the individual and small business markets, and those are areas that states have traditionally regulated. Without a state-run exchange, states would undercut the role of their own regulators in an important new market – an ironic path to choose for Republicans, who say they believe in states’ rights over federal jurisdiction.

Walker stopped implementation of the law last year on the hopes it would be overturned either by the U.S. Supreme Court or Republicans following the November election. But the court upheld the law in June and President Barack Obama’s victory earlier this month ensured the law’s survival.

Walker opposes his supporters

A broad coalition of groups that are rarely on the same side of an issue urged Walker to have Wisconsin set up the exchange so it had more control over how it would function. Those groups include Wisconsin Manufacturers and Commerce, Wisconsin Chamber of Commerce, the state chapter of the National Federation of Independent Businesses, health care advocacy groups that support universal health care and the insurance industry.

Among those who disagreed with Walker’s decision is Rick Abrams, CEO of the Wisconsin Medical Society. 

“We absolutely believe that the state exchange is the away to go, primarily because every state, particularly Wisconsin, is unique,” he said. “Having the exchange be uniquely Wisconsin puts us in the best position to try to further reduce the number of uninsured in the state while meeting the specific care needs of the people in the state.”

“If it is a federally run system, it is one-size-fits-all,” Abrams warned. “I’ve been in long-term health care representing physicians for over 30 years, and I’ve learned how localized, how special local health care delivery is. We know how to deliver efficient and effective care in Ashland, Wis. We would think that it’s highly doubtful that a federal exchange can be tailored to address such specific needs.”

Abrams said Wisconsin has about a dozen “domestically grown” health plans that could have been used to create a state-run exchange. He expressed concerns about the accessibility of health records among various local providers under a federally run plan.

But Abrams did not criticize Walker’s decision, saying “it’s clear to us that Gov. Walker’s people did their due diligence over the position.”

“The governor’s concern is that while he recognized in the initial years the federal government would be funding the creation of the exchange, he was concerned what would happen after that – if the federal government would walk away from its commitment,” Abrams said.

But Sen.-elect Tammy Baldwin condemned Walker for making what she characterized as a political decision rather than one in the best interests of Wisconsinites.

“The people of Wisconsin sent a clear message that they wanted to move Wisconsin and our country forward by having both parties put progress ahead of politics,” Baldwin said in a statement. “I joined others in reaching out to Gov. Walker and made it clear I was committed to working with him to advance health care reforms that work for Wisconsin. Instead of leading and working together to move a ‘made in Wisconsin’ health insurance marketplace forward, Gov. Walker chose to pass the buck and reject the opportunity to take ownership of this issue.

“I will not let politics stand in the way of progress; that is not what I was elected to do. I remain committed to bringing people together to make health care reform work for Wisconsin. I will work to ensure Wisconsin families and businesses get what they deserve: a health insurance marketplace that provides affordable and accessible choices, strengthens Wisconsin’s economic security, and moves our state forward.”

Tea party groups and conservative Republicans in the Legislature had pressured Walker not to move forward with the exchange. Nine Republican lawmakers went so far as to tell the tea party group Campaign for Liberty that they would back legislation to arrest federal officials who took steps to implement the Affordable Care Act in Wisconsin.

Walker announced the state’s intent even though the Obama administration had agreed to a request by Republican governors for a month’s extension to make a decision.

The Affordable Care Act is expected to provide coverage to more than 30 million people nationwide through the exchanges and expanded Medicaid programs. The Medicaid expansion is voluntary, and Walker has indicated reticence to moving forward with it in Wisconsin.

Abrams expressed hope that Walker’s decision is not cast in stone. “It’s my feeling that this issue and discussion has not ended,” he said.