By Rich Kirchen, Senior Reporter- The Business Journal
Posted by The Business Journal serving Greater Milwaukee. Friday, September 14, 2012, 5:00am CDT
While Gov. Scott Walker continues blocking implementation of President Barack Obama’s Affordable Care Act at the state level, observers believe Walker could alter his stance on establishing a Wisconsin health insurance exchange after the Nov. 6 election.
One reason Walker might reconsider: Wisconsin Manufacturers and Commerce — the politically conservative business group that has been one of his biggest supporters — prefers a Wisconsin exchange to one operated by the federal government.
The health insurance exchanges would provide employees with coverage options if their employers do not supply health care benefits. This aspect of the Affordable Care Act impacts employers with 50 or more full-time-equivalent employees.
In January, Walker announced he will not implement a health insurance exchange and turned down a $38 million grant from the federal government. The state also joined a federal lawsuit opposing the Affordable Care Act, sometimes referred to as Obamacare.
The law includes a provision that states must have insurance exchanges running by 2014.
The official word from Walker is that nothing has changed.
“Wisconsin will not take any action to implement Obamacare,” Walker spokesman Cullen Werwie said via email. “Gov. Walker is hopeful that political changes later this year ultimately end the implementation of this law at the federal level.”
Voters will choose on Nov. 6 either Obama or Republican Mitt Romney as president and whether the U.S. Senate remains in Democratic Party control. Republicans are hopeful that if Romney wins and they gain control of the Senate they can begin unraveling the Affordable Care Act or at least de-fund it.
The flip side is that if Obama is re-elected, the law will remain on the books, barring an overturn of the June U.S. Supreme Court decision that declared the Affordable Care Act constitutional.
While WMC and many of its members also oppose the Affordable Care Act, the fact is that Wisconsin businesses need to comply with the law for now.
If Walker persists in not implementing a Wisconsin health insurance exchange, the federal government will do it. That would be an unpalatable choice for many employers.
Some states that are preparing to launch exchanges are “not as market-driven as they could be,” said Charlie Stevens, an attorney with the Milwaukee office of Michael Best & Friedrich LLP. Wisconsin employers would prefer that an exchange here be market-driven, said Stevens, who believes Walker holds the same view.
“It’s conceivable his administration is working in the background to be prepared,” Stevens said.
The outcome of the Nov. 6 election will impact whether the Affordable Care Act is implemented as is, amended or repealed, said Kurt Bauer, president and chief executive officer of WMC.
“If after Nov. 6 it looks like (the Affordable Care Act) will be implemented as is, then WMC believes the pragmatic approach is to create a state exchange rather than rely on a federal alternative,” Bauer said via email.
The business group believes cost and compliance factors will potentially push businesses, especially smaller ones, into the exchanges, Bauer said. Therefore, it makes sense to have a Wisconsin-run option, he said.
WMC officials haven’t formally communicated their position to Walker “because we first have to see what happens on Nov. 6,” Bauer said.
If Walker gives the go-ahead, state Office of the Commissioner of Insurance officials are confident they can create and submit a blueprint for a Wisconsin-led state health care exchange as required by Nov. 16, said OCI spokesman J.P. Wieske. The document requires a general outline of a state’s plan and legislative action that would be taken to enable starting an exchange, said Wieske.
It is prudent for state insurance commissioner Ted Nickel and his staff to wait until after the election, Wieske said.
“My expectation is when we sit down and look at this issue post-election that the governor and commissioner Nickel will do what they think is best for the consumers of Wisconsin,” Wieske said.
Meanwhile, WMC is working to inform its members on what the law means to them. WMC held a seminar in downtown Milwaukee Sept. 6 that was attended by human resources executives seeking expert opinions.
WMC members must face the very real possibility that the law is here to stay, said Rebecca Hogan, WMC’s director of health and human resources policy.
“It is similar to a business in a hurricane zone preparing for a forecasted storm that may or may not hit,” Hogan said. “Pragmatism and prudence dictates that you prepare for the worst-case scenario, just in case.”
Companies and organizations with 50 or more employees will need to prepare for health insurance exchanges by March 2013, said Terry Frett, president of Frett Barrington Ltd., a Pewaukee employee benefits consulting firm.
Those employers must notify employees the exchanges exist and of the coverage available through the exchanges, which will launch in 2014, he said.
Employers and their insurance advisers are awaiting rules from the federal government, adding to uncertainty over compliance, Frett said.
“We’ve been advising clients the law is the law,” Frett said.
Frett said he anticipates some companies facing financial challenges may decide to drop their health insurance coverage and send employees to the health insurance exchanges. Those companies could face penalties, but the penalties may be less costly than continuing to provide insurance, Frett and others said.
On the other hand, many employers are likely to continue providing coverage, Frett said.
Rich Kirchen is The Business Journal’s senior reporter. He covers health care, insurance, politics, media and marketing/advertising.
Walker, WMC differ on health law
By Rich Kirchen, Senior Reporter- The Business Journal
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