LRB-5510/1
TJD:amn
2021 - 2022 LEGISLATURE
March 10, 2022 - Introduced by Representatives Shelton, Moore Omokunde,
Anderson, Andraca, Baldeh, Billings, Brostoff, Cabrera, Conley, Drake,
Emerson, Goyke, Haywood, Hebl, Hesselbein, Hong, B. Meyers, Ohnstad,
Pope, Riemer, Sinicki, Snodgrass, Spreitzer, Stubbs, Subeck, Vining and
Vruwink, cosponsored by Senators Johnson, Larson, Agard, Bewley,
Carpenter, Roys, Smith and L. Taylor. Referred to Committee on Health.
AB1118,1,3 1An Act to create 49.45 (59m), 49.471 (4m) and 601.59 of the statutes; relating
2to:
BadgerCare purchase option, basic plan, state-based insurance exchange,
3and granting rule-making authority.
Analysis by the Legislative Reference Bureau
This bill requires the Department of Health Services to request federal
approval to permit certain individuals whose income is greater than the income
eligibility limit for the BadgerCare program, but who otherwise meet the eligibility
requirements, to purchase coverage through BadgerCare through a separate
purchase option that meets criteria specified in the bill, including having a premium
rate similar to the average rate paid by the state to managed care plan contractors
and a minimum actuarial value of 87 percent. The bill also requires DHS to include
an option for small groups of 50 employees or fewer to purchase coverage for group
members under the purchase program under the bill. The bill requires DHS to
submit a report providing information on the status of receiving a federal waiver and
the results from actuarial and economic analyses that are necessary for a waiver
proposal. If any necessary waiver or state plan amendments are approved, DHS
must implement the program. The bill also requires DHS to seek any federal waiver
and state Medical Assistance plan amendments necessary to allow qualified
individuals who choose to purchase the BadgerCare option to use advanced tax
credits and cost-sharing credits, if eligible, to purchase one of these options.
Currently, DHS administers the Medical Assistance program, which is a joint
federal and state program that provides health services to individuals who have

limited financial resources. Some services are provided through programs that
operate under a waiver of federal Medicaid laws, including services provided through
the BadgerCare program. Under current law, certain parents and caretaker
relatives with incomes of not more than 100 percent of the federal poverty line, before
a 5 percent income disregard is applied, are eligible for BadgerCare benefits. Under
current law, childless adults who 1) are under age 65; 2) have family incomes that
do not exceed 100 percent of the FPL, before a 5 percent income disregard is applied;
and 3) are not otherwise eligible for Medical Assistance, are eligible, under a
demonstration project, for BadgerCare benefits.
The bill requires DHS to develop a plan and request federal approval to create
a basic health plan that complies with the federal Patient Protection and Affordable
Care Act. The basic health plan must cover individuals whose household income
does not exceed 200 percent of the federal poverty line. The ACA allows states to
create such a basic health program.
This bill directs the Office of the Commissioner of Insurance to establish and
operate a state-based health insurance exchange, which must also include access to
the ability to enroll in the purchase option for BadgerCare. Under current law, the
ACA requires that an exchange be established in each state to facilitate the purchase
of qualified health insurance coverage by individuals and small employers. Under
the ACA, a state must operate its own state-based exchange, use the federally
facilitated exchange operated by the U.S. Department of Health and Human
Services, or adopt a hybrid approach under which the state operates a state-based
exchange but uses the federal platform, known as HealthCare.gov, to handle
eligibility and enrollment functions. Wisconsin currently uses the federally
facilitated exchange. The bill authorizes OCI to enter into any agreement with the
federal government necessary to implement the state-based exchange provisions.
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:
AB1118,1 1Section 1. 49.45 (59m) of the statutes is created to read:
AB1118,2,72 49.45 (59m) Basic health plan. The department shall develop a plan and
3request a waiver, state plan amendment, or other federal approval to create a basic
4health plan that complies with section 1331 of the federal Patient Protection and
5Affordable Care Act, P.L. 111-148. A basic health plan under this subsection shall
6provide coverage for individuals whose household income does not exceed 200
7percent of the poverty line.
AB1118,2
1Section 2. 49.471 (4m) of the statutes is created to read:
AB1118,3,102 49.471 (4m) Purchase options for BadgerCare. (a) 1. The department shall
3request from the secretary of the federal department of health and human services
4any necessary waiver or amendment to the state Medical Assistance plan to
5establish a program that allows individuals with income above the maximum income
6eligibility limit applicable under this section or under s. 49.45 (23), and who
7otherwise meet the eligibility requirements under this section or under s. 49.45 (23),
8the option of purchasing coverage through this section or through the demonstration
9project under s. 49.45 (23) instead of purchasing an individual health plan through
10private insurance.
AB1118,3,1411 2. The department shall also seek any federal waiver and state Medical
12Assistance plan amendments necessary to allow individuals who qualify under subd.
131. to use advanced tax credits and cost-sharing credits, if eligible, to purchase one
14of the options described under subd. 1.
AB1118,3,2315 (b) 1. The department shall coordinate the administration of the purchase
16options under this subsection with the programs under this section and s. 49.45 (23)
17to maximize efficiency and improve the continuity of care, consistent with the
18requirements of this section and s. 49.45 (23). The department shall seek to
19implement mechanisms to ensure the long-term financial sustainability of the
20programs under this section and s. 49.45 (23). These mechanisms must address
21issues related to minimizing adverse selection, the state financial risk and
22contribution, and negative impacts to premiums in the individual and group
23insurance markets.
AB1118,3,2524 2. The purchase option program shall include, at a minimum, all of the
25following attributes:
AB1118,4,2
1a. Establishment of an annual per enrollee premium rate similar to the average
2rate paid by the state to managed care plan contractors.
AB1118,4,43 b. Establishment of a benefit set equal to the benefits covered under this section
4and s. 49.45 (23).
AB1118,4,65 c. Annual enrollment that is limited to the same annual open enrollment
6periods established for the programs under this section and s. 49.45 (23).
AB1118,4,87 d. The ability for the department to adjust the purchase option's actuarial value
8to a value no lower than 87 percent.
AB1118,4,109 e. Reimbursement mechanisms for addressing potential increased costs to the
10programs under this section and s. 49.45 (23).
AB1118,4,1511 (c) By March 1, 2023, the department of health services shall submit to the
12appropriate standing committee in each house of the legislature under s. 13.172 (3)
13a report that provides information on the status of the request for a federal waiver
14and the results from actuarial and economic analyses that are necessary for a waiver
15proposal.
AB1118,4,1816 (d) The department shall include, in collaboration with the commissioner of
17insurance if necessary, an option for small groups of 50 employees or fewer to
18purchase coverage for group members under the program under this subsection.
AB1118,4,2419 (e) If any necessary waiver or amendments to the state plan described under
20par. (a) 1. are approved, the department shall implement the program. If the
21department is authorized to implement the program, and if any waiver or state plan
22amendment described under par. (a) 2. is necessary and is approved, or if the
23department determines neither a waiver nor state plan amendment is necessary, the
24department shall allow the purchase options described under par. (a) 2.
AB1118,3 25Section 3 . 601.59 of the statutes is created to read:
AB1118,5,1
1601.59 State-based exchange. (1) Definitions. In this section:
AB1118,5,22 (a) “Exchange” has the meaning given in 45 CFR 155.20.
AB1118,5,53 (b) “State-based exchange” means an exchange that is described in and meets
4the requirements of 45 CFR 155.200 (f) and is approved by the federal secretary of
5health and human services under 45 CFR 155.106.
AB1118,5,10 6(2) Establishment and operation of state-based exchange. The commissioner
7shall develop a plan to establish and operate a state-based exchange. The
8commissioner, in collaboration, as necessary, with the department of health services,
9shall ensure that individuals may access the ability to enroll in the purchase option
10program under s. 49.471 (4m) through the state-based exchange.
AB1118,5,13 11(3) Agreement with federal government. The commissioner may enter into
12any agreement with the federal government necessary to facilitate the
13implementation of this section.
AB1118,5,15 14(4) Rules. The commissioner may promulgate rules necessary to implement
15this section.
AB1118,5,1616 (End)
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