Milwaukee health insurance 27 percent more costly than Madison, and much lower quality
Citizen Action of Wisconsin released its 6th Annual Wisconsin Health Insurance Cost Ranking report earlier this week on a state-wide media call. On the media call to comment on the report were Congressman Ron Kind, State Senator Jon Erpenbach, State Representative Jon Richards, and State Representative Kelda Helen Roys.
The full report includes 7 charts ranking the cities and regions of Wisconsin on health insurance costs, rate of inflation, and quality.
This year’s report finds wide disparities between higher cost and lower cost cities and regions of Wisconsin, as well as large differences in the rate of health insurance inflation. There is a 32 percent variation between the lowest cost metro area (Madison) and the highest cost areas (La Crosse), which amounts to a difference of $2,177 per year for single health coverage. The magnitude of this gap could have significant economic consequences. The report also finds disparities in health insurance quality. Although some areas of Wisconsin have relatively higher costs than others, the report finds that every metro area of the state except Madison has suffered higher health insurance hyperinflation than the national average.
The report finds that Wisconsin health insurance premiums have increased 182 percent over the last decade compared to 164 percent nationally. The report also concludes that lower health insurance costs in the Madison area provide key lessons on how to implement the Affordable Care Act, the national health care reform law, in Wisconsin.
“Health insurance hyperinflation is threatening the health security of Wisconsin families, making critical programs like Medicare and BadgerCare more expensive, and is a major drag on Wisconsin’s economy,“said Robert Kraig, the report author and the Executive Director of Citizen Action of Wisconsin. “The striking numbers in this report bring down to the local level the economic cost we are paying for skyrocketing health insurance costs, and the need to effectively implement the Affordable Care Act, the new national health care reform law.”
“Skyrocketing health insurance costs are one of the great anchors on job creation in Wisconsin,”’ said Congressman Ron Kind (D-La Crosse). “This report shows that Wisconsin can do better.
It is further evidence that health insurance inflation is best addressed through reforming how we pay for health care and an integrated patient focused delivery system that provides better quality at a better price. To achieve this the Walker Administration needs to end its foot dragging and get to work on fully implementing the nation’s health care reform law, the Affordable Care Act.”
“It’s clear from this report that we have a health insurance cost inflation problem here in Wisconsin that could potentially be harming our ability to create jobs,” said Senator Jon Erpenbach (D-Middleton). “The Affordable Care Act is the perfect opportunity to implement a competitive health marketplace. Unfortunately we have an administration focused on maintaining the status quo, which benefits the insurance companies over the people of Wisconsin.”
“These findings further reinforce the point that strong competition among health insurance companies for a large group of consumers helps drive down price and increase quality,” said Rep. Jon Richards (D-Milwaukee). “This report should be a wake up call to Governor Walker that the state’s current health insurance market is not working for Wisconsin families and small businesses. I encourage the Walker administration to reject the health care status quo in Wisconsin and to embrace competition and the marketplace. Working together with the legislature to build a strong health insurance exchange would be the best way to do that.”
“This report demonstrates that higher health care costs do not necessarily correlate to higher quality or better outcomes for patients. In fact, the for-profit providers actually result in higher costs and lower quality,” said State Representative Kelda Helen Roys (D-Madison). “Elected leaders ought to use this information to ensure that everyone has access to health care, that we focus on patient outcomes and quality, and that in doing so we can see lower costs for patients and taxpayers.” Key Wisconsin Health Insurance Cost Ranking 2010 Findings
- There is a 32 percent variation between the highest cost major metro area and the lowest cost metro area, which amounts to a $2,177 difference for a single policy each year.
- The highest cost metro areas are La Crosse, Eau Claire, Superior, Wausau, the greater Twin Cities region on the Wisconsin side, Milwaukee, and Racine.
- Madison remains the lowest cost metro area and the gap is widening. This year we found the largest gap between Madison and the rest of the state yet measured in the 6 year history of the report.
- Green Bay, Appleton Oshkosh, and La Crosse suffered the highest rates of health insurance inflation over the last decade. The inflation rate for these cities was more than 40 percent above the national average, and over 20 percent over the state average.
- With the exception of Madison, all Wisconsin regions and metro areas have suffered health insurance inflation above the national average. While national employer-based single health insurance premiums have increased 164 percent this decade, they have increased 182 percent in Wisconsin.
The report also finds that the national for-profit insurance companies offer lower quality health plans, as measured by performance measures such as preventive screenings, coordination of care, disease management, and consumer satisfaction. Southeastern Wisconsin has among the highest health insurance costs, but the lowest quality health plans because of the predominance of the national for-profit companies in the region. The report finds no link between cost and quality, as Madison has the highest quality and the lowest cost plans. Many other regions of the state have high cost plans which are also high quality.
In 2012 the Wisconsin State Legislature will make the key decisions on how to structure Wisconsin’s new competitive health insurance market (health insurance exchange) under the terms of the Affordable Care Act, the new national health care reform law. Relatively lower health insurance costs and below average inflation in the Madison area lends empirical support to the value of a competitive bidding process that covers a large number of participants and includes both cost and quality as a mechanism to contain health insurance inflation.