The federal health care overhaul signed into law last year will drastically cut the number of uninsured Wisconsin residents by 2016 but will drive up premiums for some customers and could cause some companies to drop coverage for their employees, a report released Wednesday found.
Former Democratic Gov. Jim Doyle's administration hired Massachusetts-based Gorman Actuarial, LLC, and Massachusetts Institute of Technology economist Jonathan Gruber last year to study the effects of health care reform on Wisconsin markets. The state used federal planning grants to pay for the report.
According to the study, the changes will result in a 65 percent decrease in the number of uninsured people in the state, from 520,000 now to about 180,000 by 2016. The report attributed the drop to mandates that people purchase health insurance and tax credits to offset the cost of premiums and make insurance more affordable. The mandates are among key aspects of the overhaul being challenged in court. If the mandates are repealed, only about 62,000 people would gain coverage, the report projected.
About 90 percent of individuals without employer-sponsored or public insurance will see premium increases averaging 41 percent, the study predicted. The increases will come largely due to high-risk people moving into the individual market, reform provisions that guarantee coverage for them and new minimum coverage requirements.
Tax subsidies should mitigate those increases, however. Once they take effect, about 60 percent of the individual market will see their premiums go up 31 percent. About 41 percent of the individual market will see their premiums drop about 56 percent.
About 53 percent of people insured through small employers, defined as companies with fewer than 50 workers, will see premiums go up an average of 15 percent. The study attributed those increases to provisions that eliminate carriers' ability to use people's health status to rate them.
About 23,000 people will lose coverage, largely because employers faced with rising costs eliminate benefits, the report projected.
State Department of Health Services Secretary Dennis Smith -- appointed by Republican Gov. Scott Walker -- issued a statement saying the study reveals major shortcomings in the federal plan. In an interview he said the report shows costs will only climb as more public dollars flow through the private insurance industry.
"We have one of the lowest uninsured rates and one of the most robust insurance marketplaces in the nation, all achieved without federal mandates," Smith said in a statement.
State Rep. Jon Richards, D-Milwaukee, a member of the Assembly's health committee, said the report shows more people will be insured and receive better coverage under the changes, but Walker's administration doesn't want to move away from the status quo.
"They just want to stay with what we have," he said, "which is costing people an arm and a leg and providing people with worse insurance every year."