LRB-2885/3
PJK/RAC/MES/JK:jld:nwn
2007 - 2008 LEGISLATURE
March 5, 2008 - Introduced by Senator Erpenbach. Referred to Committee on
Health, Human Services, Insurance, and Job Creation.
SB562,2,8
1An Act to repeal 40.05 (4) (ar), 609.01 (7), 609.10, 609.20 (1m) (c), 609.20 (1m)
2(d), 628.36 (4) (b) 1., 628.36 (4) (b) 2. and 628.36 (4) (b) 3.;
to renumber and
3amend 40.51 (6) and 62.61;
to amend 13.172 (1), 13.48 (13) (a), 13.62 (2), 13.95
4(intro.), 16.002 (2), 16.004 (4), 16.004 (5), 16.004 (12) (a), 16.045 (1) (a), 16.41
5(4), 16.417 (1) (a), 16.52 (7), 16.528 (1) (a), 16.53 (2), 16.54 (9) (a) 1., 16.70 (2),
616.765 (1), 16.765 (2), 16.765 (4), 16.765 (5), 16.765 (6), 16.765 (7) (intro.),
716.765 (7) (d), 16.765 (8), 16.85 (2), 16.865 (8), 40.05 (4) (ag) (intro.), 40.05 (4)
8(b), 40.05 (4) (be), 40.51 (1), 40.51 (2), 40.51 (7), 40.51 (8), 40.51 (8m), 40.52 (1)
9(intro.), 40.52 (2), 40.98 (2) (a) 1., 49.473 (2) (c), 49.68 (3) (d) 1., 49.683 (3), 49.685
10(6) (b), 59.52 (11) (c), 60.23 (25), 66.0137 (4), 66.0137 (4m) (b), 66.0137 (5), 71.26
11(1) (be), 77.54 (9a) (a), 100.45 (1) (dm), 111.70 (1) (dm), 111.70 (4) (cm) 8s., 120.13
12(2) (b), 120.13 (2) (g), 230.03 (3), 285.59 (1) (b), 628.36 (4) (a) (intro.), 632.87 (5),
13632.895 (10) (a), 632.895 (11) (a) (intro.), 632.895 (11) (c) 1., 632.895 (11) (d),
14632.895 (12) (b) (intro.), 632.895 (12) (c), 632.895 (13) (a), 632.895 (13) (b),
1632.895 (14) (b) and 632.895 (14) (c); and
to create 13.94 (1) (dj), 13.94 (1s) (c)
25., 16.004 (7d), 16.004 (7h), 20.855 (4m), 25.17 (1) (gd), 25.775, 40.05 (4) (a) 4.,
340.05 (4g) (d), 40.51 (6) (b), 40.52 (1m), 49.45 (54), 49.687 (1m) (d), 62.61 (1) (b),
470.11 (41p), 109.075 (9), 111.91 (2) (pt), 149.12 (2) (em), chapter 260, 632.895 (8)
5(f) 4., 632.895 (9) (d) 4., 632.895 (10) (b) 6., 632.895 (11) (e) 3. and 632.895 (14)
6(d) 7. of the statutes;
relating to: the establishment of the Healthy Wisconsin
7Plan and the Healthy Wisconsin Authority, granting rule-making authority,
8and making an appropriation.
Analysis by the Legislative Reference Bureau
Healthy Wisconsin Authority and Plan
This bill creates the Healthy Wisconsin Authority (HWA), a public body
corporate and politic that is created by state law but that is not a state agency. HWA
is governed by a board of trustees (board) consisting of, as nonvoting members, the
secretary of employee trust funds and four members of a health care advisory
committee created in the bill, and all of the following voting members, nominated by
the governor and with the advice and consent of the senate appointed, for staggered
six-year terms: four members selected from a list of names submitted by statewide
labor or union coalitions; four members selected from a list of names submitted by
statewide business and employer organizations; one member selected from a list of
names submitted by statewide public school teacher labor organizations; one
member selected from a list of names submitted by statewide small business
organizations; two members who are farmers, selected from a list of names
submitted by statewide general farm organizations; one member who is a
self-employed person; and three members selected from a list of names submitted
by statewide health care consumer organizations.
Because HWA is not a state agency, numerous laws that apply to state agencies
do not apply to HWA. However, HWA is treated like a state agency in the following
respects, among others: 1) it is generally subject to the open records and open
meetings laws; 2) it is treated like a state agency for purposes of the law regulating
lobbying; 3) it is exempt from income tax, sales and use tax, and property taxes; 4)
the Code of Ethics for Public Officials and Employees covers HWA; and 5) it is subject
to auditing by the Legislative Audit Bureau.
HWA is unlike a state agency in many other ways, including: 1) it may approve
its own budget without going through the state budgetary process; 2) its employees
are not state employees, are not included in the state system of personnel
management, and are hired outside the state hiring system; and 3) it is not subject
to statutory rule-making procedures, including requirements for legislative review
of proposed rules. Unlike most other authorities, HWA may not issue bonds.
HWA must establish and administer a health care plan (plan), known as
Healthy Wisconsin, for all eligible persons in the state. HWA must establish an office
of outreach, enrollment, and advocacy to perform outreach services to enroll persons
in the plan, to assist persons in choosing their health care coverage options, to act
as an advocate for plan participants, and to provide information to the public,
agencies, and legislators regarding the plan. HWA also must establish a health care
advisory committee to advise HWA on various health matters, such as promoting
healthier lifestyles, disease management, increasing transparency in health care
cost and quality information, reducing health care costs, and confidentiality of
medical information. The committee is comprised of the following members: at least
one member each designated by the Wisconsin Medical Society, Inc., the Wisconsin
Academy of Family Physicians, and the Wisconsin Hospital Association, Inc.; one
member each designated by the president of the Board of Regents of the University
of Wisconsin System, the president of the Medical College of Wisconsin, the
Wisconsin Dental Association, and statewide organizations interested in mental
health issues; two members designated by the Wisconsin Nurses Association, the
Wisconsin Federation of Nurses and Health Professionals, and the Service
Employees International Union; one member representing health care
administrators; and one member representing health care professionals.
Plan eligibility
A person is eligible to participate in the plan if he or she has maintained his or
her place of permanent abode in this state for at least 12 months, maintains a
substantial presence in this state, is under 65 years of age, is not eligible for health
care coverage from the federal or a foreign government, is not an inmate of a penal
facility or confined in or committed to an institution for the mentally ill or
developmentally disabled, and, unless a federal waiver is granted and in effect, is not
eligible for a Medical Assistance (MA) program, including the BadgerCare Plus
program, unless the MA program or an eligibility category under an MA program is
not receiving federal matching funds for the benefits under the program or category.
Under the bill, the Department of Health and Family Services (DHFS) is required
to request a federal waiver allowing those eligible for MA to participate in the plan.
Persons who are gainfully employed in the state and pregnant women who reside in
this state are also eligible for the plan if they meet all of the eligibility criteria except
that they have not maintained a permanent abode in this state for at least 12 months.
Children under the age of 18 years who reside in this state with parents who have
not maintained a permanent abode in this state for at least 12 months are also
eligible regardless of how long they have lived in the state if they meet the other
eligibility criteria.
Benefits and cost sharing
The plan must provide the same benefits that were in effect as of January 1,
2008, under the state employee health benefit plan. The board may adjust the
benefits to provide additional cost-effective treatment options that would reduce
health care costs, avoid health risks, or result in better health outcomes. In addition,
the plan must cover preventive dental care for children up to 18 years of age and must
cover mental health services and alcohol and other drug abuse treatment to the same
extent as the plan covers treatment for physical conditions. Generally, except for
prescription drugs to which a deductible applies, and except for copayments for
drugs, the board assumes the risk for and pays directly for prescription drugs
provided to participants. The board is directed to replicate the prescription drug
buying system developed by the Group Insurance Board for prescription drug
coverage for state employees, and may join with other states to form a multistate
purchasing group to negotiate with prescription drug manufacturers for reduced
prices.
Certain specified preventive services, such as prenatal care, preventive dental
care for children, and medically appropriate colonoscopies and gynecological exams,
are covered without any cost sharing. Except for those specified preventive services,
copayments during a year are $20 for medical and hospital and related services for
persons who are at least 18 years of age on January 1 of that year. Certain other
services, such as inappropriate emergency room use, have higher copayments. All
persons, regardless of age, must pay copayments of $5 for generic prescription drugs,
$15 for brand-name prescription drugs on the formulary determined by the board,
and $40 for brand-name prescription drugs not on the formulary.
There is no deductible during a year for persons who are under age 18 on
January 1 of that year. Persons who are at least 18 years of age on January 1 of a
year must pay a deductible of $300 during that year, but the deductible amount is
limited to $600 per year for families with two or more persons who are at least 18
years of age on January 1 of that year. The maximum out-of-pocket amount for
copayments, coinsurance, and deductibles is $2,000 a year for a person who is at least
18 years of age on January 1 of that year, but not more than $3,000 a year for a family
consisting of two or more persons.
The bill contains certain requirements for providers with respect to charging
interest on deductible amounts not paid, providing services to persons who have not
paid a deductible amount, and charging for services to which a deductible applies.
Choice of health care network or fee-for-service option
Under the bill, the board may establish areas in the state for the purpose of
receiving bids from health care networks. In each area designated by the board, the
plan must offer participants two options for the delivery of their health care services:
a fee-for-service option and a health care network (network) option. Annually, the
board must solicit bids from networks, which are defined in the bill as a
provider-driven, coordinated group of health care providers and facilities. Only
qualifying networks may be selected to provide services in an area. The bill specifies
various criteria related to a network's organization and provision of services that a
network must satisfy to be qualifying. On the basis of the bids and other information
submitted by the networks, the board must certify which networks are qualifying,
and then classify the certified networks according to price and quality measures as
the lowest-cost network, low-cost networks, and higher-cost networks.
During annual open enrollment periods, plan participants may select a
fee-for-service option or a certified network for the delivery of their health care.
Participants who do not make a selection are assigned randomly to the lowest-cost
network or a low-cost network, or to a fee-for-service option that is the lowest-cost
option. In addition, a participant who selects a higher-cost network or a
fee-for-service option and who fails to pay any required additional premium amount
will be assigned randomly to the lowest-cost network or a low-cost network, or to a
fee-for-service option that is the lowest-cost option. Each participant must select
a primary care provider who is responsible for overseeing all of the participant's care.
On behalf of a participant who selects a network classified as the lowest-cost
network or a low-cost network, the board pays to the network on a monthly basis the
amount that the network bid, and the participant pays no additional amount as
premium. On behalf of a participant who chooses a network classified as a
higher-cost network, the board pays to the network on a monthly basis the amount
that was bid by the lowest-cost network, and the participant must pay the difference
between what the network bid and the amount that the board pays.
The board establishes provider payment rates for services provided under a
fee-for-service option. A provider that provides services to a participant who has
selected a fee-for-service option must accept the rate established by the board as the
full payment and may not charge the participant any amount by which the provider's
charge has been reduced. In addition to establishing provider payment rates, the
board, with the assistance of actuarial consultants, establishes the monthly
risk-adjusted cost of the fee-for-service option and classifies the fee-for-service
option in the same manner as networks are classified. A participant who selects a
fee-for-service option that is classified as a higher-cost choice must pay an
additional amount, which is capped in the bill, that is based on the classification of
the fee-for-service option chosen by the participant and the number of certified
low-cost networks available to the participant. There is no additional cost to a
participant who chooses a fee-for-service option if the board determines that there
are no low-cost networks available to the participant.
Assessments on individuals and employers
Under the bill, the Department of Revenue (DOR) must impose and collect
assessments that are calculated by the board, based on the board's anticipated
revenue needs. The assessments may be collected from individuals and employers
through the income tax system, or through another system devised by DOR.
Generally, the assessment for an individual who is the employee of another
person is between 2 percent and 4 percent of the individual's social security wages.
If the individual's social security wages are 150 percent or less of the federal poverty
line, however, the assessment is zero. If such wages are between 150 percent and 300
percent of the poverty line, the assessment is on a sliding scale between zero and 4
percent, depending on the amount of the individual's social security wages and on the
number his or her dependents.
The assessment on a self-employed individual is between 9 percent and 10
percent. The assessment on someone who is eligible to participate in the plan but
who is neither self-employed nor the employee of another person is 10 percent of the
individual's federal adjusted gross income, up to the maximum amount of the income
subject to social security tax.
The maximum amount of an assessment that DOR may impose on a household,
defined as an individual, his or her spouse, and his or her immediate family, as that
term is defined by the board, is 4 percent of the annual limit on the contribution and
benefit base of the Old-Age, Survivors, and Disability Insurance program, as
calculated annually by the U.S. Social Security Administration. For 2008, this base
is $102,000.
For an employer, the assessment calculated by the board must be between 9
percent and 12 percent of an employer's aggregate social security wages, except that
for taxable year 2010 the assessment imposed on a small employer (an employer who
has no more than ten employees) is 33 percent of the amount calculated that would
otherwise be collected. For taxable year 2011, the assessment on a small employer
is 67 percent of the amount calculated that would otherwise be collected.
The assessments that are collected by DOR must be deposited into the Healthy
Wisconsin trust fund. The board may annually increase or decrease the assessment
percentages for individuals and employers, but an annual increase may not exceed
the percentage increase in medical inflation, unless otherwise provided by law.
Miscellaneous matters
Under current law, DHFS provides financial assistance to eligible persons who
have chronic kidney disease, cystic fibrosis, or hemophilia for the cost of medical
treatment for those diseases. This assistance is collectively referred to as the
Chronic Disease Aids Program. Generally, a person with one of these chronic
diseases who has other health care coverage is not eligible for assistance under the
Chronic Disease Aids Program. Under the bill, a person with coverage under the
plan is still eligible for assistance under the Chronic Disease Aids Program.
Under current law, the state is required to, and counties, cities, villages, and
towns (political subdivisions) may, provide health care coverage through insurance
or on a self-insured basis for their employees. The bill provides that the state and
political subdivisions may provide for their employees health care benefits that are
not provided under the plan, since state and political subdivision employees, if they
satisfy the eligibility criteria, will have coverage under the plan.
Under the bill, if a entity that levies a property tax reduces the costs of
providing health care benefits to its employees as a result of providing benefits under
the plan, the entity must distribute at least 50 percent of the reduction amount as
reduction in property taxes levied for 2010. The reduction amount for each taxpayer
is based on the equalized value of the taxpayer's property.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB562,7,83
13.172
(1) In this section, "agency" means an office, department, agency,
4institution of higher education, association, society, or other body in state
5government created or authorized to be created by the constitution or any law, that
6is entitled to expend moneys appropriated by law, including the legislature and the
7courts, and any authority created in subch. II of ch. 114 or subch. III of ch. 149 or in
8ch. 231, 233, 234
, 260, or 279.
SB562, s. 2
9Section
2. 13.48 (13) (a) of the statutes is amended to read:
SB562,7,2110
13.48
(13) (a) Except as provided in par. (b) or (c), every building, structure or
11facility that is constructed for the benefit of or use of the state, any state agency,
12board, commission or department, the University of Wisconsin Hospitals and Clinics
13Authority, the Fox River Navigational System Authority,
the Healthy Wisconsin
14Authority, or any local professional baseball park district created under subch. III
15of ch. 229 if the construction is undertaken by the department of administration on
16behalf of the district, shall be in compliance with all applicable state laws, rules,
17codes and regulations but the construction is not subject to the ordinances or
18regulations of the municipality in which the construction takes place except zoning,
19including without limitation because of enumeration ordinances or regulations
20relating to materials used, permits, supervision of construction or installation,
21payment of permit fees, or other restrictions.
SB562,8,324
13.62
(2) "Agency" means any board, commission, department, office, society,
25institution of higher education, council, or committee in the state government, or any
1authority created in subch. II of ch. 114 or subch. III of ch. 149 or in ch. 231, 232, 233,
2234, 237,
260, or 279, except that the term does not include a council or committee
3of the legislature.
SB562, s. 4
4Section
4. 13.94 (1) (dj) of the statutes is created to read:
SB562,8,75
13.94
(1) (dj) Annually, conduct a financial audit of the Healthy Wisconsin Plan
6under ch. 260 and file copies of each audit report under this paragraph with the
7distributees specified in par. (b).
SB562, s. 5
8Section
5. 13.94 (1s) (c) 5. of the statutes is created to read:
SB562,8,109
13.94
(1s) (c) 5. The Healthy Wisconsin Authority for the cost of the audit under
10sub. (1) (dj).
