SB698: Bill Text

LRB-4864/1

PJK&RAC:wlj:rs

2005 - 2006 LEGISLATURE

2005 Senate BILL 698

April 25, 2006 - Introduced by Senator Decker, cosponsored by Representative Musser. Referred to Committee on Agriculture and Insurance.

SB698,2,3 An Act to repeal 40.05 (4) (ag), 40.05 (4) (ar), 609.10, 609.20 (1m) (c), 609.20 (1m) (d), 628.36 (4) (b) 1., 628.36 (4) (b) 2. and 628.36 (4) (b) 3.; to renumber and amend 40.51 (6) and 62.61; to amend 40.51 (2), 40.51 (7), 40.51 (8), 40.51 (8m), 40.52 (1) (intro.), 40.52 (2), 49.473 (2) (c), 49.68 (3) (d) 1., 49.683 (3), 49.685 (6) (b), 59.52 (11) (c), 60.23 (25), 66.0137 (4), 66.0137 (4m) (b), 66.0137 (5), 111.70 (1) (dm), 120.12 (24), 120.13 (2) (b), 120.13 (2) (g), 254.11 (13), 628.36 (4) (a) (intro.), 632.87 (5), 632.895 (10) (a), 632.895 (11) (a) (intro.), 632.895 (11) (c) 1., 632.895 (11) (d) and 632.895 (14) (b); to repeal and recreate 149.12 (2) (e); and to create 15.07 (2) (i), 15.735, 20.145 (6), 40.51 (6) (b), 40.52 (1m), 49.474, 49.665 (4) (e), 62.61 (1) (b), 109.075 (9), 111.91 (2) (pm), 227.01 (13) (nm), 632.895 (8) (f) 4., 632.895 (9) (d) 4., 632.895 (10) (b) 6., 632.895 (11) (e) 3., 632.895 (14) (d) 7. and chapter 634 of the statutes; relating to: creating a health care plan to cover all individuals employed in the state, requiring every employer in the state to pay an assessment for the costs of the health care plan, creating a Wisconsin Health Care Plan Board, requesting waivers of federal law, requiring the exercise of rule-making authority, and making appropriations.

Analysis by the Legislative Reference Bureau

This bill creates a health care coverage plan called the Wisconsin Health Care Plan (WHCP) and creates the Wisconsin health care plan board (board), which must develop and administer WHCP. The board, which is attached to the Office of the Commissioner of Insurance (OCI), is composed of the commissioner of insurance, who is the nonvoting chairperson of the board, five persons who represent employers and who are nominated by Wisconsin Manufacturers and Commerce, and five persons who represent employees and who are nominated by the Wisconsin State AFL-CIO. In addition, the governor may appoint nonvoting members who represent hospitals, physicians, or state agencies or organizations with a connection to health care.

WHCP provides mandatory health care coverage for all persons not eligible for Medicare, regardless of where they reside, who are employed by private or public employers in this state, or who are unemployed but were employed in this state within the preceding two months, and for all dependents of those two categories of persons. Any resident of this state who is under 65 years of age and who is not automatically covered, including self-employed persons, may purchase coverage under WHCP, for himself or herself and his or her dependents, at a cost determined by the board that reflects the actual cost of their coverage. The bill defines a dependent as a spouse, an unmarried child or stepchild under the age of 19 years or, if the unmarried child or stepchild is a full-time student and financially dependent on the parent, under the age of 21 years, or an unmarried child or stepchild of any age who is disabled and dependent on the parent.

WHCP covers all reasonable medical services and prescription drugs necessary to maintain health, enable diagnosis, or provide treatment or rehabilitation for an injury, condition, disability, or disease. Specifically excluded from coverage, however, unless determined to be medically necessary under criteria specified by the board by rule, are dental and vision care, long-term care, and reconstructive or cosmetic surgery. An employer may provide employee health care benefits that are not covered under WHCP.

WHCP costs are partly paid through enrollee cost sharing and premiums paid by persons who are not automatically covered and who purchase their coverage. During the first year of WHCP's operation: 1) the total cost-sharing amount may not exceed $300 for a single individual or $600 for a family, excluding prescription drug copayments, health care services copayments, and premiums paid by persons purchasing coverage; 2) copayments for prescription drugs may not exceed $15 per prescription for a generic drug or $20 per prescription for a brand name drug; and 3) each time a covered person receives services, he or she must pay a health care services copayment in the amount of $15 if the services are provided by the primary care physician that he or she selects to coordinate his or her health care or by another health care provider to which he or she has been referred or in the amount of 25 percent of the cost of the services if the services are provided by a specialist provider to whom he or she has not been referred. After the first year of WHCP's operation, the board may annually increase the specified cost-sharing amounts by not more than a percentage equal to medical inflation. An employer may pay any or all of the cost sharing on behalf of the employer's employees.

All employers in the state pay part of the costs of WHCP through a monthly assessment based on a flat rate for each employee that an employer has. The board must determine the basis for calculating the assessments and must set the flat rate for each employee at a level that is sufficient to cover WHCP's costs not covered by enrollee payments. If an employer has fewer than ten employees and the average annual gross income of all of the employer's employees is not more than $20,000, however, the employer's monthly assessment is reduced by 50 percent.

In addition to the responsibilities of the board that have been mentioned, the board must negotiate, or contract with a third party to negotiate, with drug manufacturers and distributors for discounts on prescription drug prices for WHCP enrollees; may seek to extend to other health care programs covering state residents, such as Medical Assistance (MA), the Badger Care health care program (Badger Care), and Worker's Compensation, any agreements negotiated for prescription drug discounts for WHCP enrollees; must establish provider payment rates for services and articles covered under WHCP; must seek federal funds for payment of WHCP costs related to covered persons who would otherwise be eligible for coverage under MA, Badger Care, or any other health care program other than Medicare that is financed at least in part with federal funds; and must select one or more administrators of WHCP using a competitive bidding process.

The bill provides that WHCP is to be considered a group health insurance policy and is subject to all requirements in current law that apply to group health insurance policies, such as the requirements known as the health insurance mandates that require health insurance policies to cover certain persons, certain conditions, or the services of certain types of providers.

Finally, under the bill, OCI is required to request waivers from federal law to allow persons who are eligible for MA, Badger Care, or any other health care program other than Medicare funded at least in part with federal funds to be covered under WHCP; to allow the use of federal financial participation to fund benefits provided under WHCP to persons who are eligible for MA, Badger Care, or any other health care program other than Medicare funded at least in part with federal funds; and to allow persons with coverage under MA or Badger Care to purchase prescription drugs under a purchasing program negotiated for WHCP participants.

For further information see the state and local 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:

SB698, s. 1 Section 1. 15.07 (2) (i) of the statutes is created to read:

SB698,4,3 15.07 (2) (i) The commissioner of insurance shall serve as nonvoting chairperson of the Wisconsin health care plan board.

SB698, s. 2 Section 2. 15.735 of the statutes is created to read:

SB698,4,7 15.735 Same; attached boards. (1) Wisconsin health care plan board. (a) There is created a Wisconsin health care plan board, attached to the office of the commissioner of insurance under s. 15.03, consisting of the following members:

SB698,4,10 1. Five persons who represent employers, including at least one person who represents small employers, and who are nominated by Wisconsin Manufacturers and Commerce.

SB698,4,12 2. Five persons who represent employees and who are nominated by the Wisconsin State AFL-CIO.

SB698,4,13 3. The commissioner of insurance, who shall serve as nonvoting chairperson.

SB698,4,16 (b) Notwithstanding par. (a), the governor may appoint to the board nonvoting members who represent hospitals, physicians, and other state agencies or organizations with a connection to health care.

SB698,4,18 (c) The members of the board under par. (a) 1. and 2. shall be appointed for 3-year terms and may be reappointed.

SB698,4,20 (d) Notwithstanding s. 15.07 (4), 8 votes are required for approval of any matter within the jurisdiction of the board.

SB698, s. 3 Section 3. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert the following amounts for the purposes indicated: - See PDF for table

SB698, s. 4 Section 4. 20.145 (6) of the statutes is created to read:

SB698,5,6 20.145 (6) Wisconsin Health Care Plan. (a) Development and administration. The amounts in the schedule for the expenses of the Wisconsin health care plan board in the development and administration of the Wisconsin Health Care Plan.

SB698,5,10 (d) Employer assessments received from the state; general purpose revenue. A sum sufficient to pay employer assessments for state employees whose salaries are paid from general purpose revenue for the operating costs of the Wisconsin Health Care Plan.

SB698,5,13 (g) Operating costs. All moneys received from employer assessments and from premiums paid by individuals covered under the Wisconsin Health Care Plan for the operating costs of the Wisconsin Health Care Plan.

SB698,5,18 (gm) Employer assessments received from the state; program revenue. From the appropriate program revenue and program revenue-service accounts, a sum sufficient to pay employer assessments for state employees whose salaries are paid from program revenue or program revenue-service accounts for the operating costs of the Wisconsin Health Care Plan.

SB698,5,20 (h) Gifts and grants. All moneys received from gifts, grants, and bequests to carry out the purposes for which made.

SB698,6,3 (m) Federal funds; state operations. All moneys received from the federal government, as authorized by the governor under s. 16.54, for the purposes for which made and received.

SB698,6,7 (s) Employer assessments received from the state; segregated revenue. From the appropriate segregated funds, a sum sufficient to pay employer assessments for state employees whose salaries are paid from segregated funds for the operating costs of the Wisconsin Health Care Plan.

SB698, s. 5 Section 5. 40.05 (4) (ag) of the statutes is repealed.

SB698, s. 6 Section 6. 40.05 (4) (ar) of the statutes is repealed.

SB698, s. 7 Section 7. 40.51 (2) of the statutes is amended to read:

SB698,7,2 40.51 (2) Except as provided in subs. (10), (10m), (11) and (16), any eligible employee may become covered by group health insurance benefits under this subchapter by electing coverage within 30 days of being hired, to be effective as of the first day of the month which begins on or after the date the application is received by the employer, or by electing coverage prior to becoming eligible for any employer contribution towards the premium cost as provided in s. 40.05 (4) (a) to be effective upon becoming eligible for employer contributions. An eligible employee who is not insured, but who is eligible for an employer contribution under s. 40.05 (4) (ag) 1., may elect coverage prior to becoming eligible for an employer contribution under s. 40.05 (4) (ag) 2., with the coverage to be effective upon becoming eligible for the increase in the employer contribution. Any employee who does not so elect at one of these times, or who subsequently cancels the insurance, shall not thereafter become insured unless the employee furnishes evidence of insurability satisfactory to the insurer, at the employee's own expense or obtains coverage subject to contractual waiting periods. The method to be used shall be specified in the health insurance contract.

SB698, s. 8 Section 8. 40.51 (6) of the statutes is renumbered 40.51 (6) (a) and amended to read:

SB698,7,13 40.51 (6) (a) This state shall offer to all of its eligible employees described in subs. (10), (10m), and (16) at least 2 insured or uninsured health care coverage plans providing substantially equivalent hospital and medical benefits, including a health maintenance organization or a preferred provider plan, if those health care plans are determined by the group insurance board to be available in the area of the place of employment and are approved by the group insurance board. The group insurance board shall place each of the plans into one of 3 tiers established in accordance with standards adopted by the group insurance board. The tiers shall be separated according to the employee's share of premium costs.

SB698, s. 9 Section 9. 40.51 (6) (b) of the statutes is created to read:

SB698,7,17 40.51 (6) (b) The state may offer to its employees coverage for health care benefits not provided to the employees under the Wisconsin Health Care Plan under ch. 634.

SB698, s. 10 Section 10. 40.51 (7) of the statutes is amended to read:

SB698,8,2 40.51 (7) Any employer, other than the state, may offer to all of its employees a health care coverage plan coverage for health care benefits not provided to the employees under the Wisconsin Health Care Plan under ch. 634 through a program offered by the group insurance board. Notwithstanding sub. (2) and ss. 40.05 (4) and 40.52 (1), the department may by rule establish different eligibility standards or contribution requirements for such employees and employers and may by rule limit the categories of employers, other than the state, which may be included as participating employers under this subchapter.

SB698, s. 11 Section 11. 40.51 (8) of the statutes, as affected by 2005 Wisconsin Act 194, is amended to read:

SB698,8,8 40.51 (8) Every health care coverage plan offered by the state under sub. (6) (a) shall comply with ss. 631.89, 631.90, 631.93 (2), 631.95, 632.72 (2), 632.746 (1) to (8) and (10), 632.747, 632.748, 632.83, 632.835, 632.85, 632.853, 632.855, 632.87 (3) to (6), 632.895 (5m) and (8) to (14), and 632.896.