A revolution in health insurance is already well under way

The cost of individual Obamacare health-insurance policies could capture the Wisconsin political spotlight this month, but other - perhaps more important - changes are developing.

The rates charged by insurance companies for individual policies will attract much attention. Rates in California, already released, are lower than expected. Will competition have the same impact on Wisconsin?

Health insurance probably is the biggest economic issue in America. Insurance costs increased this year by 4 percent. Across the country the average for a family plan is $16,351 while the average for a single policy is $5,884. The 4 percent increase compares to a 1.8 percent increase in average American wages and an overall 1.1 percent inflation rate.

But a revolution in health insurance is already under way. Employers are increasing the annual comprehensive deductibles and co-pays, according to the Kaiser Family Foundation. Republicans are touting the approach.

Consider Gov. Scott Walker's remarks on a national television program in August:

"The way I prefer to go, which is you ultimately control healthcare costs by allowing people to have control, having more 'skin in the game,' over their health care and wellness, not just health care," Walker said.

Drew Altman, president of the Kaiser Family Foundation, cited figures from a survey of 2,000 employers. The responses showed 78 percent of the companies now have a general deductible as part of their employee plan, and 38 percent of those have at least a $1,000 annual deductible.

"It's part of what I see as a quiet resolution in health insurance, moving from more-comprehensive to less-comprehensive with higher deductibles." Altman told the New York Times. It especially appeals to conservatives.

Altman called it a "version of health insurance that they've always favored, with more 'skin in the game,' the one that's coming to dominate the market place."

With the demise of state employee collective bargaining in Wisconsin, Walker could - with the help of the Republican-controlled Legislature - adopt a "more skin in the game" approach to health care for the tens of thousands of state employees.

State government is the largest employer in Wisconsin providing health insurance to its workers. The state program covers more than 140,000 persons including state employees and their families.

Many citizens don't realize that whatever the state does has a major impact on health insurance. For example, the state played a key role in the early 1980s when it opened the door to health maintenance organization (HMO) coverage for state workers. As an alternative, the state also provided alternative to employees willing to pay higher premiums which allowed them to access any medical provider. A small percentage of state employees - often older workers - chose this option.

The HMOs provided cost competition and were less expensive. Workers overwhelmingly joined those programs. A key element for HMOs was the idea of primary physicians who oversaw coordinated health care.

The state employee experience led to an HMO boom in many parts of the state. In turn, many local governments opted to offer HMO coverage as an alternative to their workers. Participation in private-sector HMO programs soared.

On the CNBC television program Walker also said Wisconsin employers don't like the uncertainty that has come with Obamacare. He suggested they are reluctant to hire additional workers. The law requires companies to provide health insurance if they have 50 or more workers.

Jobs will be an issue in the 2014 election as Walker seeks another four years as governor. In the 2010 election Walker vowed Wisconsin would add an additional 250,000 jobs if he won a four-year term. Most experts are skeptical that Walker will be able to claim that those jobs have been created.

Right-wing talk radio will certainly blame Obamacare if Walker's job promise for Wisconsin falls short.


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