LRB-4142/3
PJK:cmh:kjf
1999 - 2000 LEGISLATURE
February 17, 2000 - Introduced by Representatives Underheim, Albers, Urban,
Owens, Olsen, Musser, Goetsch
and Gunderson, cosponsored by Senators
Rosenzweig, Breske and Roessler. Referred to Committee on Health.
AB759,1,7 1An Act to renumber and amend 149.165 (2) (intro.), 149.165 (2) (a), 149.165
2(2) (b), 149.165 (2) (c), 149.165 (2) (d) and 149.165 (2) (e); to amend 149.14 (5)
3(a), 149.143 (1) (b) 1. a., 149.143 (1) (b) 1. c., 149.143 (2) (a) 2., 149.143 (2m) (b)
41., 149.146 (2) (b) (intro.), 149.146 (2) (b) 1., 149.165 (1), 149.165 (3m) and
5149.17 (1); and to create 149.14 (5m) and 149.165 (2) (bc) of the statutes;
6relating to: premium rates for coverage under the health insurance
7risk-sharing plan for persons who are eligible for medicare.
Analysis by the Legislative Reference Bureau
The health insurance risk-sharing plan (HIRSP), which is administered by the
department of health and family services (DHFS) and the HIRSP board, provides
health insurance coverage for persons who are covered under medicare because they
are disabled, persons who have tested positive for human immunodeficiency virus
(HIV) and persons who have been refused coverage, or coverage at an affordable
price, in the private health insurance market because of their mental or physical
health condition. Also eligible for coverage are persons who do not currently have
health insurance coverage, but who were covered under certain types of health
insurance coverage for at least 18 months in the past. HIRSP offers its enrollees who
are not eligible for medicare an annual choice of coverage option. For persons who
are eligible for medicare, HIRSP provides an alternative policy that reduces the
benefits payable by the amounts paid under medicare.

Under current law, 60% of HIRSP costs must be paid by premiums and
premium and deductible subsidies. Premiums for the general major medical
coverage may not be less than 150%, nor more than 200%, of the rate that a standard
risk would be charged under an individual policy providing the same coverage and
deductibles as are provided under HIRSP. Premiums for the choice of coverage
option must differ from the general major medical coverage premiums by the same
percentage as the percentage difference between what a standard risk would be
charged for the two coverages. Current law, however, does not distinguish between
the premium rates for the coverage provided to persons who are eligible for medicare
and the coverage provided to persons who are not eligible for medicare.
This bill provides that the rates for the alternative, reduced-benefit coverage
provided to persons who are eligible for medicare must be determined on the basis
of: 1) a comparison between the average per capita amount of covered expenses paid
by HIRSP in the previous calendar year on behalf of persons who are eligible for
medicare and the average per capita amount of covered expenses paid by HIRSP in
the previous calendar year on behalf of persons not eligible for medicare; 2) HIRSP
enrollment levels of persons who are eligible for medicare; and 3) other economic
factors that DHFS and the HIRSP board consider relevant. Under the bill, only the
premiums for the general major medical coverage for persons not eligible for
medicare must be set between 150% and 200% of what a standard risk would pay for
the same coverage and deductibles. The bill provides that if, in order to cover HIRSP
expenses, premiums for persons who are not eligible for medicare are increased
above 150% of what a standard risk would pay, premiums for the coverage provided
to persons who are eligible for medicare must be increased by a comparable amount.
Under current law, a person with coverage under HIRSP who has a household
income in one of five income brackets below $25,000 receives a premium subsidy. For
each income bracket, the premium that a covered person pays is reduced to a
specified percentage, between 100% and 130%, of the rate that a standard risk in the
private health insurance market would be charged for substantially the same
coverage and deductibles as provided under HIRSP. The bill provides that the
premium reductions to the specified percentages of the rate that a standard risk
would be charged apply only to covered persons who are not eligible for medicare.
The premium for a covered person who is eligible for medicare and who has a
household income in one of the five income brackets below $25,000 must be reduced
by the same percentage as the premium is reduced for a person who is not eligible
for medicare and who has a household income in the same income bracket.
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:
AB759, s. 1 1Section 1. 149.14 (5) (a) of the statutes is amended to read:
AB759,3,14
1149.14 (5) (a) The plan shall offer a deductible in combination with appropriate
2premiums determined under this chapter for major medical expense coverage
3required under this section. For coverage offered to those persons eligible for
4medicare, the plan shall offer a deductible equal to the deductible charged by part
5A of title XVIII of the federal social security act, as amended. The deductible
6amounts for all other eligible persons shall be dependent upon household income as
7determined under s. 149.165. For eligible persons under s. 149.165 (2) (a) 1., the
8deductible shall be $500. For eligible persons under s. 149.165 (2) (b) (a) 2., the
9deductible shall be $600. For eligible persons under s. 149.165 (2) (c) (a) 3., the
10deductible shall be $700. For eligible persons under s. 149.165 (2) (d) (a) 4., the
11deductible shall be $800. For all other eligible persons who are not eligible for
12medicare, the deductible shall be $1,000. With respect to all eligible persons,
13expenses used to satisfy the deductible during the last 90 days of a calendar year
14shall also be applied to satisfy the deductible for the following calendar year.
AB759, s. 2 15Section 2. 149.14 (5m) of the statutes is created to read:
AB759,3,1816 149.14 (5m) Premium rates. For the coverage required under this section, the
17premium rates charged to eligible persons with coverage under sub. (2) (b) shall be
18determined on the basis of the following factors:
AB759,3,2319 (a) A comparison between the average per capita amount of covered expenses
20paid by the plan in the previous calendar year on behalf of eligible persons with
21coverage under sub. (2) (b) and the average per capita amount of covered expenses
22paid by the plan in the previous calendar year on behalf of eligible persons with
23coverage under sub. (2) (a).
AB759,3,2424 (b) The enrollment levels of eligible persons with coverage under sub. (2) (b).
AB759,4,2
1(c) Other economic factors that the department and the board consider
2relevant.
AB759, s. 3 3Section 3. 149.143 (1) (b) 1. a. of the statutes, as affected by 1999 Wisconsin
4Act 9
, is amended to read:
AB759,4,135 149.143 (1) (b) 1. a. First, from premiums from eligible persons with coverage
6under s. 149.14 (2) (a) set at 150% of the rate that a standard risk would be charged
7under an individual policy providing substantially the same coverage and
8deductibles as are provided under the plan and from eligible persons with coverage
9under s. 149.14 (2) (b) set in accordance with s. 149.14 (5m)
, including amounts
10received for premium and deductible subsidies under s. 149.144 and under the
11transfer to the fund from the appropriation account under s. 20.435 (4) (ah), and from
12premiums collected from eligible persons with coverage under s. 149.146 set in
13accordance with s. 149.146 (2) (b).
AB759, s. 4 14Section 4. 149.143 (1) (b) 1. c. of the statutes, as affected by 1999 Wisconsin
15Act 9
, is amended to read:
AB759,5,216 149.143 (1) (b) 1. c. Third, by increasing premiums from eligible persons with
17coverage under s. 149.14 (2) (a) to more than 150% but not more than 200% of the rate
18that a standard risk would be charged under an individual policy providing
19substantially the same coverage and deductibles as are provided under the plan and
20from eligible persons with coverage under s. 149.14 (2) (b) by a comparable amount
21in accordance with s. 149.14 (5m)
, including amounts received for premium and
22deductible subsidies under s. 149.144 and under the transfer to the fund from the
23appropriation account under s. 20.435 (4) (ah), and by increasing premiums from
24eligible persons with coverage under s. 149.146 in accordance with s. 149.146 (2) (b),

1to the extent that the amounts under subd. 1. a. and b. are insufficient to pay 60%
2of plan costs.
AB759, s. 5 3Section 5. 149.143 (2) (a) 2. of the statutes is amended to read:
AB759,5,94 149.143 (2) (a) 2. After making the determinations under subd. 1., by rule set
5premium rates for the new plan year, including the rates under s. 149.146 (2) (b), in
6the manner specified in sub. (1) (b) 1. a. and c. and such that a rate for coverage under
7s. 149.14 (2) (a) is not less than 150% nor more than 200% of the rate that a standard
8risk would be charged under an individual policy providing substantially the same
9coverage and deductibles as are provided under the plan.
AB759, s. 6 10Section 6. 149.143 (2m) (b) 1. of the statutes, as created by 1999 Wisconsin Act
119
, is amended to read:
AB759,5,1612 149.143 (2m) (b) 1. To reduce premiums in succeeding plan years as provided
13in sub. (1) (b) 1. b. For eligible persons with coverage under s. 149.14 (2) (a),
14premiums may not be reduced below 150% of the rate that a standard risk would be
15charged under an individual policy providing substantially the same coverage and
16deductibles as are provided under the plan.
AB759, s. 7 17Section 7. 149.146 (2) (b) (intro.) of the statutes is amended to read:
AB759,5,2218 149.146 (2) (b) (intro.) The schedule of premiums for coverage under this
19section shall be promulgated by rule by the department, as provided in s. 149.143.
20The rates for coverage under this section shall be set such that they differ from the
21rates for coverage under s. 149.14 (2) (a) by the same percentage as the percentage
22difference between the following:
AB759, s. 8 23Section 8. 149.146 (2) (b) 1. of the statutes is amended to read:
AB759,6,3
1149.146 (2) (b) 1. The rate that a standard risk would be charged under an
2individual policy providing substantially the same coverage and deductibles as
3provided under s. 149.14 (2) (a) and (5) (a).
AB759, s. 9 4Section 9. 149.165 (1) of the statutes is amended to read:
AB759,6,85 149.165 (1) Except as provided in s. 149.146 (2) (a), the department shall
6reduce the premiums established under s. 149.11 in conformity with ss. 149.14 (5m),
7149.143 and 149.17, for the eligible persons and in the manner set forth in subs. (2)
8and (3).
AB759, s. 10 9Section 10. 149.165 (2) (intro.) of the statutes, as affected by 1999 Wisconsin
10Act 9
, is renumbered 149.165 (2) (a) (intro.) and amended to read:
AB759,6,1511 149.165 (2) (a) (intro.) Subject to sub. (3m), if the household income, as defined
12in s. 71.52 (5) and as determined under sub. (3), of an eligible person with coverage
13under s. 149.14 (2) (a)
is equal to or greater than the first amount and less than the
142nd amount listed in any of the following, the department shall reduce the premium
15for the eligible person to the rate shown after the amounts:
AB759, s. 11 16Section 11. 149.165 (2) (a) of the statutes is renumbered 149.165 (2) (a) 1. and
17amended to read:
AB759,6,2118 149.165 (2) (a) 1. If equal to or greater than $0 and less than $10,000, to 100%
19of the rate that a standard risk would be charged under an individual policy
20providing substantially the same coverage and deductibles as provided under the
21plan
s. 149.14 (2) (a) and (5) (a).
AB759, s. 12 22Section 12. 149.165 (2) (b) of the statutes is renumbered 149.165 (2) (a) 2. and
23amended to read:
AB759,7,224 149.165 (2) (a) 2. If equal to or greater than $10,000 and less than $14,000, to
25106.5% of the rate that a standard risk would be charged under an individual policy

1providing substantially the same coverage and deductibles as provided under the
2plan
s. 149.14 (2) (a) and (5) (a).
AB759, s. 13 3Section 13. 149.165 (2) (bc) of the statutes is created to read:
AB759,7,124 149.165 (2) (bc) Subject to sub. (3m), if the household income, as defined in s.
571.52 (5) and as determined under sub. (3), of an eligible person with coverage under
6s. 149.14 (2) (b) is equal to or greater than the first amount and less than the 2nd
7amount listed in par. (a) 1., 2., 3., 4. or 5., the department shall reduce the premium
8established for the eligible person by the same percentage as the department
9reduces, under par. (a), the premium established for an eligible person with coverage
10under s. 149.14 (2) (a) who has a household income specified in the same subdivision
11under par. (a) as the household income of the eligible person with coverage under s.
12149.14 (2) (b).
AB759, s. 14 13Section 14. 149.165 (2) (c) of the statutes is renumbered 149.165 (2) (a) 3. and
14amended to read:
AB759,7,1815 149.165 (2) (a) 3. If equal to or greater than $14,000 and less than $17,000, to
16115.5% of the rate that a standard risk would be charged under an individual policy
17providing substantially the same coverage and deductibles as provided under the
18plan
s. 149.14 (2) (a) and (5) (a).
AB759, s. 15 19Section 15. 149.165 (2) (d) of the statutes is renumbered 149.165 (2) (a) 4. and
20amended to read:
AB759,7,2421 149.165 (2) (a) 4. If equal to or greater than $17,000 and less than $20,000, to
22124.5% of the rate that a standard risk would be charged under an individual policy
23providing substantially the same coverage and deductibles as provided under the
24plan
s. 149.14 (2) (a) and (5) (a).
AB759, s. 16
1Section 16. 149.165 (2) (e) of the statutes, as created by 1999 Wisconsin Act
29
, is renumbered 149.165 (2) (a) 5. and amended to read:
AB759,8,63 149.165 (2) (a) 5. If equal to or greater than $20,000 and less than $25,000, to
4130% of the rate that a standard risk would be charged under an individual policy
5providing substantially the same coverage and deductibles as provided under the
6plan
s. 149.14 (2) (a) and (5) (a).
AB759, s. 17 7Section 17. 149.165 (3m) of the statutes, as created by 1999 Wisconsin Act 9,
8is amended to read:
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