Health Mandate Left Out of Wisconsin Budget

Published January 1, 2008

The Wisconsin legislature approved the state’s final budget on October 23–and did not include a controversial, near-universal health insurance mandate that would have forced every resident to purchase health insurance.

The state Senate passed the individual health insurance mandate as a standalone bill on June 26, less than 24 hours after its introduction. The measure would have levied taxes of 10.5 percent per employee on all business owners and 4 percent on all employees to subsidize insurance for low-income people. This would have resulted in a $15.2 billion payroll tax increase–the largest in Wisconsin’s history.

The final budget was accepted by Gov. Jim Doyle (D) October 26 as the second-latest in state history–114 days late. The $57.2 million budget will cover the next two years.

Mark Block, associate state director for the Americans for Prosperity Foundation–a Washington, DC group advocating fiscal conservatism–said the health plan was “ill-conceived” to begin with, and he’s pleased it was not included in the budget.

“It was introduced on Monday and passed Tuesday with no public hearing on it,” Block said. “Not only would it have been the largest tax hike in Wisconsin’s history, but it would also put us in third behind Sweden and France [concerning government involvement in health care]. Plus, the legislation itself had many shortcomings.”

Subsidizing Illegal Aliens

One of those shortcomings, Block noted, was the fact the state would subsidize insurance for illegal immigrants.

The final budget will expand BadgerCare–the state-subsidized health care plan for families below 185 percent of the federal poverty level–to BadgerCare Plus, which will cover all children under 18 regardless of their family’s income and pregnant women with household incomes below 300 percent of the federal poverty level.

The budget did not include Doyle’s proposal to provide health care to childless adults earning less than 200 percent of the poverty level.

“It was left out because, first, [Wisconsin] needed to pass a budget,” Block said, noting Republicans would not pass anything as long that provision was included. “Also, once people are educated on the facts of Healthy Wisconsin, they are appalled that the legislature would even consider putting such a burden on taxpayers.”

The Healthy Wisconsin Authority would have been a state agency with massive, legislative-like powers–able to establish insurance co-payments, accept and evaluate bids from insurance companies, decide medical standards for treatment, and set payroll taxes.

State Rep. Leah Vukmir (R-Wauwatosa) said advocates of the universal plan began having problems when taxpayers started hearing about it.

Consumers Want Competition

A survey of 500 Wisconsin residents–conducted August 5-6 by Call Research, a national research firm, and released August 21–revealed 47 percent of the 500 respondents statewide felt the health care system should be reformed. Of those, 64 percent felt “the best way to reform the current private health care system is to cut costs and provide more choices by increasing competition among private insurance companies and by requiring private health care providers to be more transparent with their actual costs.”

Fifty-four percent disapproved of including the universal insurance mandate in the budget.

“Government-run health care will take us down the wrong road,” Vukmir said. “The larger message is we have to bring in competition to lower health care costs.

“We need to bring it down to level one–the transaction level,” Vukmir noted. “Right now everything is occurring at upper levels, and individuals have very little say and input.”

Coming Back

Block predicted the mandate would reappear as a standalone bill by the end of 2007.

“I think it will be reintroduced soon,” Block said. “The next step for us is quite simple. Continue educating by hosting seminars and meeting with legislators and media on what we feel are the major downfalls of Healthy Wisconsin.”

Sen. John Erpenbach (D-Middleton), a primary architect of the Democrats’ health care plan, declined to comment for this article.

Liz Klimas ([email protected]) writes from Michigan.