1332s and the changing politics of healthcare

Now this is interesting on multiple levels as the Washington Examiner reports Wisconsin just passed a law outlining a re-insurance waiver request for the individual market.

Wisconsin Gov. Scott Walker, an avowed opponent of Obamacare, signed a bill into law Wednesday that will position the state to receive $150 million in federal dollars to help shore up its healthcare marketplace.

The bill allows the state to apply for a federal waiver under Obamacare, whereby it will ask to set up a $200 million reinsurance fund, 75 percent of which would be paid for by the federal government. These funds help pay for the costs of the sickest enrollees in a marketplace, thereby lowering costs across the board and reducing the amount of money that the federal government would pay to subsidize premiums.

Structurally, the proposal is a “me-too” waiver that looks a lot like other currently approved. It should be approved fairly quickly by CMS. It should result in signficantly lower premiums for non-subsidized buyers in Wisconsin. They won’t quite be held harmless from the combination of normal medical inflation, repeal of the individual mandate and the proliferation of underwritten short term plans, but the price increase could plausibly be a single digits increase instead of twenty percent or more.

Mechanically this is boring and useful work.

Politically I find it fascinating. Republicans have come to the realization that they hold trifectas federally and in many states. This means they hold responsibility (earned and unearned) for the individual health insurance market (among other things). As Republican incumbents look at polls and special elections that show a significant generic Democratic advantage going into November, policies that can avoid a headline of “Trumpcare premiums up another 22%” all of a sudden sound really good.

At the national level, there is ongoing talk about funding reinsurance in the next appropriations bill. Blame and reward goes to those in power especially when those in power have made very public pronouncements and votes that can be directly tied to an outcome.