State of WI Creates Office of Health Care Reform

Insuring Resources News Update:


State creates health care reform office

By Guy Boulton of the Journal Sentinel

Posted: April 7, 2010 10:14 p.m. |

Gov. Jim Doyle has created an Office of Health Care Reform to prepare for the sweeping changes from health care reform that take effect in 2014.

Those tasks will range from developing an exchange, where individuals and small businesses will be able to buy health insurance, to helping people understand the pending changes.

"Our direction now is pretty simple. It isn't to rehash the political debate," Doyle said at Froedtert Hospital on Wednesday. "It isn't just to fight this all out. It is to make sure we are really looking out for Wisconsin citizens."

The new office will be overseen by Karen Timberlake, the secretary of the Department of Health Services, and Sean Dilweg, the state insurance commissioner.

Some changes from the new law take effect immediately.

Small businesses that provide health benefits to their employees, for example, may be eligible for tax credits this year, Doyle said. The new Office of Health Care Reform will help make small businesses aware of the credit.

But implementing the most significant changes will take years. And designing easy-to-use exchanges - basically Web sites - will be one of the key tasks.

The health plans sold on the exchange will be required to offer a minimum standard of benefits, enabling consumers to make apples-to-apples comparisons when shopping for health insurance.

The exchanges are expected to offer a choice of benefit packages from a variety of insurance companies. People and families with incomes of up to 400% of the federal poverty level - $88,200 for a family of four this year - also will be eligible for subsidies to offset the cost of the coverage.

The sites also could provide consumer information on a health plan's performance.

The exchanges could be one of the most significant changes from the new law, with some economists contending they could increase competition among health insurers by allowing consumers to easily compare plans and their costs.

But the exchanges also could force insurance agents who sell individual policies out of the market. For one thing, health insurers will not have to pay sales commissions for the policies sold on the exchanges.

The exchanges also could affect agents and brokers who focus on small businesses.

Dan Schwartzer, executive vice president of the Wisconsin Association of Health Underwriters, which represents agents and brokers, said the effect is uncertain. But he said most small businesses probably would continue to work with agents because of their understanding of the market.

Doyle said he hoped to have an exchange up before 2014. But how that would work is unclear.

Before 2014, health insurers will not be required to cover people with pre-existing conditions. Health plans also would not be required to offer a minimum set of standard benefits, making apple-to-apple comparisons difficult. And small business rates would remain tied to the medical claims of their employees.

Schwartzer also noted that setting up the exchanges before 2014 could cause additional confusion when the new regulations kick in.