I joined Jim Schneider on VCY America TV’s inFocus for an hour-long live interview on Monday, and took calls from around the state. It was the last installment of the season.
The following column (by me) originally appeared at the MacIver Institute.
The mainstream media seems fixated on the insider politics surrounding repealing and replacing Obamacare, but the average person couldn’t care less about parliamentary procedures and intra-party squabbling. They’re faced with an inescapable reality: healthcare is unaffordable and inaccessible thanks to Obamacare. The question they want answered is: What is the point of having insurance if you can’t afford to use it?
The out-of-touch media coverage reminds me of the apocryphal tale about elite passengers on the Titanic arguing over the bar tab as the ship takes on water. Meanwhile, the people in steerage are stuck behind those gates trying to escape before the water reaches their heads.
The water is rising fast. In 2017, the average premium increase on the individual market in Wisconsin was 16 percent. One of the most egregiously expensive plans was in western Wisconsin, costing $51,000 per year in premiums for a couple unfortunate enough to be in their 50s with three children.
The cost of Obamacare plans is staggering. In a report last year that scoured the federal database of 2017 premiums in Wisconsin, the MacIver Institute found that a family of four would fork over an average monthly premium of $1,609.11 for a platinum plan – $19,309.32 per year – while a mid-level silver plan would cost them $1,297.02 in average monthly premiums, or $15,564.24 per year
Deductibles – the out of pocket cost of using your health insurance – also keep spiraling upward. For a top-tier platinum plan in Wisconsin, we found the average deductible is $900 for a family and $450 for an individual.
However, for a mid-level silver plan, the average deductible is $7,015.71 for a family and $3,491.92 for an individual. The average catastrophic plan deductible will be $14,300 for a family and $7,150 for an individual. That’s not cut-back-on-Starbucks money, that’s bankruptcy court, even for those earning a decent salary.
Obamacare proponents constantly point to the number of people they claim are insured because of Obamacare. But conflating health insurance with access to actual health care is looking through rose-colored glasses. In the real world, Obamacare decimates household budgets, especially middle class families who don’t receive federal subsidies and are whipsawed by the full cost of both premiums and deductibles.
Despite the double digit price spikes and astronomical deductibles in Wisconsin, we drew the long stick compared with our neighbor across the Mississippi River. Minnesotans on the individual exchanges got stuck with premium hikes as high as 67 percent in 2017.
In response, Minnesota Governor Mark Dayton and the Legislature were forced to bail out 123,000 middle class families to the tune of an additional $313 million in taxpayer money.
“If you like your plan, you can keep your plan,” President Obama said in PolitiFact’s 2013 Lie of the Year. In Minnesota, that lie came with the added asterisk that taxpayers have to come to your rescue after finding out your state’s politicians fell for a federal “free money” scam.
Fortunately, Gov. Walker and Wisconsin’s fiscally conservative legislature were more skeptical of Obama’s P.T. Barnum routine, saving us from a similar fiscal calamity.
The Minnesota example highlights an important and all-too-often overlooked point. If you’re unfortunate enough to make too much money to receive a federal subsidy – like most middle class families in America – you’re on the hook for the entire inflated premiums plus exploding deductibles for your Obamacare plan.
Middle class families stuck with Obamacare are drowning in the exorbitant costs, while poorer families who do receive subsidies can’t even afford to see their doctor because their deductibles are so high that the coverage is little more than a piece of paper. Worse, if you’re so cash-strapped that you choose to go without coverage, the IRS slaps you with a fine.
I recently heard the story of one low-income Wisconsin family of five – a husband, a wife, and three kids under the age of 10. Their punishment for going without insurance for three months last year was more than $800.
Only a nanny-state bureaucrat in a Washington, D.C. corner office would be so divorced from reality that they’d think such punitive policies are somehow fair, right, or just. They should get out of their plush enclaves and see how their policies really affect people. Or better yet, if Congress can get its act together, Obamacare bureaucrats should be standing in an unemployment line.
Obamacare cheerleaders can go on cable news and pen all the columns they want touting the expansion of health insurance coverage, but what good is having health insurance if the deductible alone will send your family into bankruptcy?
Obamacare’s continuing price spiral is caused in part by declining competition across the nation. One-third of counties in the United States have only one insurer this year, according to the Kaiser Family Foundation. Residents in these counties will have only one choice – in other words, no choice at all.
Wisconsin’s Obamacare market lost an average of 1.39 insurers per county from 2016-2017 according to our analysis. Fourteen counties have just one or two insurance companies offering Obamacare plans in 2017.
Competition – which inevitably “bends the cost curve down,” to parody another failed Obama promise – is drying up by the week. Just this month, Aetna announced it would stop selling Obamacare policies entirely next year, citing $381 million in losses in the first quarter of 2017 and $700 million in total losses.
Aetna joins insurance giants Humana and UnitedHealth in completely withdrawing from Obamacare in the wake of massive, unsustainable losses. A network of other non-profit health insurance co-ops established by Obamacare have also folded, taking billions of taxpayer dollars down with them. Out of 23 co-ops, only 4 remain, including Wisconsin’s imperiled Common Ground Co-op, which survived only after a secret infusion of cash.
Insurers’ inability to simply break even on Obamacare plans is the result of far more older, sicker enrollees and far too few younger, healthier enrollees to balance the actuarial tables. Obama should’ve been honest with the American people and said the law depends on younger and healthier people paying exorbitant rates for coverage they don’t need in order to prop up the rickety system he and Democrats rammed through Congress.
Obamacare is in a death spiral. Though the House’s version of repeal and replace narrowly passed – certainly a cause for celebration – Congress remains mired in inaction and Americans remain stuck in quicksand. Reporters wringing their hands over CBO scores and telenovela theatrics should remember that few outside the beltway ultimately care about any of that.
There is no bailing out or patching up Obamacare. It will eventually sink to the bottom of the abyss. When it does, nobody in real America will thank the media for keeping them up to date with irrelevant process stories as they go down with the ship.
The following column originally appeared at the MacIver Institute.
At long last, the Legislature’s Joint Finance Committee will have to make a decision on whether to adopt a self-funded insurance system for state employees’ health insurance. The bad news is that Governor Walker’s proposal to make the switch and save $60 million is all but dead in the state Legislature.
On Monday, the Group Insurance Board submitted contracts with third-party administrators for a self-insurance system. Those contracts spell out in black and white at least $60 million in savings over the biennium – that’s on top of $22 million in possible savings if Obamacare and its obscene tax burden is not repealed. With the contracts in hand, JFC now has about three weeks to convene a meeting and make a decision.
“Since taking office, we have sought to reform government to make it more accountable and cost effective to the hard-working taxpayers,” Walker said in a statement on Monday. “Moving to self-insurance is one of these reforms and we urge the Joint Committee on Finance to approve these contracts and invest these savings into the classroom.”
Unfortunately, it appears that JFC is prepared to leave this windfall for taxpayers on the table. Why? We’ve heard a carousel of arguments against self-insurance that have all stalled, but the final stand for self-insurance naysayers might boil down to pure politics.
Early arguments by opponents of self-insurance breathlessly claimed that the move would gut state workers’ health insurance plans. Ignoring how out of step these lavish plans are compared with their private sector counterparts, it quickly became clear this doom-and-gloom claim had no basis in reality – especially after the actual proposals were received.
Next, the self-insurance doom-mongers portrayed the switch as a journey down a long, dark tunnel. The fact is that there’s nothing mysterious or scary about self-insurance; Wisconsin already partly self-insures its dental plan and its pharmacy plan.
At least 20 states completely self-fund their state employee health plans, including Minnesota, which moved to 100 percent self-funded insurance in 2002. Also, 46 states use self-insurance in some way.
In the upper Midwest, no states are fully-insured, meaning none completely rely on private insurance and all are self-funded at least in part.
More than 90 percent of all large employers, companies that employ 5,000 or more employees, also use self-funded insurance. To say adopting this system would be risky and experimental is diametrically untrue. In fact, it would be routine and economical.
Critics then moved on to prophesizing that the switch could pose a potentially catastrophic financial risk to the state. True, the state would be directly assuming the risk rather than putting insurance companies in the middle. But barring an unprecedented epidemic sweeping state office buildings, the risk factor has been greatly hyped.
The risk would actually be low because of the sheer size of the state’s workforce, which means total annual payouts would be predictable and fluctuations minimal, according to insurance expert Dean Hoffman, who recommended the switch to the Governor’s Commission on Government Reform last May.
Legislative Republicans are also uncertain about the future of Obamacare, which imposes a variety of taxes and fees on the insurance marketplace that would be absorbed by taxpayers in Wisconsin.
JFC co-chair Sen. Alberta Darling cited Wisconsin’s relatively low premium increases at a Tuesday press conference. “Why would we want to shift out of that and into uncertainty at this point?” she asked.
Caution isn’t unreasonable, but moving to self-insurance would actually protect Wisconsin taxpayers from uncertainty. Taxpayers should be the focus, not protecting the platinum health insurance of government employees.
Obamacare hits the insurance market, and thus taxpayers, in two big ways. The reviled Obamacare Cadillac Tax applies an exorbitant 40 percent tax on all employee benefits exceeding $10,200 annually for an individual, $27,500 for a family.
Sadly, the AHCA healthcare bill that passed the House last week retains the Cadillac Tax, although it pushes off the starting date of the Cadillac tax until 2026. Self-insurance would help mitigate that cost by eliminating the middle man in the current setup.
Then there’s the insurer tax, a special levy charged to private insurance companies that’s tied to the insurer’s premiums collected in the previous year. In 2016, the insurer tax ranged from 1.5 to 3.5 percent, with future rates yet to be decided. As the state’s deputy commissioner of Employee Trust Funds, Lisa Ellinger, pointed out last year, the state pays out about $1.4 billion annually in premiums.
Self-funded insurance systems are exempt from this tax. Quick cocktail-napkin math shows that switching to self-insurance would conservatively save tens of millions on top of the $60 million outlined in the contracts.
Despite ongoing uncertainty about Obamacare, keeping the status quo is precisely the wrong decision. Assuming Obamacare’s taxes are here to stay, seizing the $60 million moment would be responsible management of taxpayer dollars. Keeping the status quo and hoping Washington politicians do the right thing would not.
Instead, legislative leaders are considering “finding” $60 million in savings within the existing system. “We’re not saying no to savings. If we do that we’re going to find a similar amount of savings in some way, shape or form,” said JFC co-chair Rep. John Nygren on Tuesday.
If that’s actually possible, it begs the obvious question: how much taxpayer money has been wasted by not finding these supposed savings years ago?
With most of the arguments against self-insurance out of gas, opponents’ final stand may betray the truth: self-insurance is good policy, but protecting the status quo is even better politics. Or protecting the status quo is better politics for any politician worried more about the next election and less about taxpayers. Unfortunately for taxpayers, just about every politician in Wisconsin fits in that category.
The fact that self-insurance is good policy is evident from how many states and large employers use it successfully.
The likely end result is that Wisconsin taxpayers will get a watered-down half-measure that goes through the motions of saving taxpayer money while keeping the bloated and expensive existing system in place. That’s bad public policy.
Here’s my column from the Sunday, March 12 edition of the La Crosse Tribune.
The nightly news and the morning paper are great ways to keep informed. Unfortunately, they’re also great avenues for politicians to peddle their schemes for foisting new taxes on unsuspecting taxpayers.
When I heard La Crosse County wants to become a “premiere resort area,” and that this designation would generate millions to fix roads, at first I felt like I was in Oprah’s audience that day she gave everyone a new car.
In reality, the proposal for a new “Premiere Resort Area Tax,” or PRAT, is more like when you overbid on the showcase showdown on The Price Is Right and the infamous fail horn blares just before you’re escorted from the stage.
The PRAT tax, the latest tax scheme cooked up by La Crosse County officials, is really just another half-percent sales tax that could be imposed on nearly all retail businesses in the county. As with any other sales tax, this $6.6 million new tax will inevitably be paid for by consumers like you.
“But without more money we can’t fill the potholes!” the tax-and-spend crowd keeps shouting in your ear every time you turn on the TV. What they conveniently omit are their own failures to properly prioritize county spending.
La Crosse County budgeted for $136,764,518 in revenue for 2016. It planned nearly $33 million in property tax collections and $11.6 million from the county’s 0.5 percent sales tax. Yes, the county already has a sales tax onto which the proposed PRAT tax would be stacked.
According to the state Department of Revenue, 44 categories of business are subject to this tax in any jurisdiction that enacts it — bars, restaurants, gas stations, clothing retailers, hotels — even a category called “miscellaneous retail stores,” lest any devious boutique business falls through the cracks. In short, pretty much every business that a tourist could theoretically walk into would be subject to the PRAT tax.
The PRAT was conceived for the most innocent of reasons. When the summer residents of certain areas, like the Wisconsin Dells, fled for the winter, the Dells and similar tourist reliant areas needed a consistent revenue source.
Thus the Legislature invented the PRAT, but it required at least 40 percent of assessed property values in the taxed region to be composed of tourism-related businesses in order to be enacted. Thus, only six municipalities in Wisconsin currently have a PRAT tax, according to the Department of Revenue. At 5.3 percent, La Crosse County doesn’t come close to qualifying.
While our home is a beautiful region with plenty of tourist attractions, it’s hardly a “premiere resort area” according to state law. Nobody’s going to be winning a trip to La Crosse on the Wheel of Fortune.
Fortunately for the pro-PRAT crowd, there’s an exemption. After an advisory referendum, the Legislature can pass a special measure allowing the county to proceed with the final steps required to enact the tax.
Taxpayers should keep an eye on the big picture, and I don’t mean the size of their property tax bills.
The county should make better decisions with what it does with taxpayer money, and roads should clearly be a priority. However, when the county board voted to nearly double its debt in 2015 from $59 million to $110 million in one fell swoop, filling potholes or fixing cracks was hardly a priority. Instead, the county embarked on a series of expansions of its office complex downtown.
Thankfully, we have a vast network of paved, pristine bike trails around here–nary a pothole in sight. Or I suppose these days we’re supposed to call them multi-use trails.
The county is clearly taking in significant revenue, it’s just not choosing to spend it on roads. Now, county officials want to hit up hard-working taxpayers for even more. If your neighbor said they desperately needed to borrow money from you, all the while installing an in-ground pool and building a breakfast nook off their foyer, any rational person would raise an eyebrow.
A tax by any other name is still a tax. Taxpayers beware.
Read the original column here.
I spoke with Vicki McKenna on Madison’s WIBA this afternoon about my Wednesday morning at the state’s Group Insurance Board meeting.
Boring, you say? Usually – but this time, a protester interrupted the meeting with a profanity-laced diatribe. She was angry that the board, in charge of taxpayer-subsidized insurance for state employees, no longer would cover gender reassignment surgery (once called a sex change operation) and attendant hormone therapy and other costs that transgender people incur.
Because the video was too explicit for radio, it’s included below. Profanity warning.
I had the pleasure of joining Joy Cardin on Wisconsin Public Radio this morning to discuss Gov. Walker’s transportation budget.
I gave up on making predictions about anything involving politics about halfway through the GOP primary. That was a good choice, because I would’ve continued to be wrong about, well, everything.
That said, Right Wisconsin asked contributors from around the state to weigh in with predictions for 2017, and I couldn’t resist. After all, the election is over. Things will fall into a predictable lull now, right?
I’m hopeful for a year of great progress in 2017 – real progress for the cause of smaller government and respect for the Constitution. Here are my predictions, mostly serious with a dash of tongue-in-cheek:
1. Republicans quickly move to repeal Obamacare. The plan will keep certain components of the law and it will phase out other components on a timeline of several years.
2. Trump administration cabinet secretaries begin shredding reams of Obama-era regulations. Environmentalists freak when they find out the tens of thousands of pages of paper weren’t recycled.
3. Trump’s Supreme Court appointee, Wisconsin’s very own Diane Sykes, is quickly confirmed and union agency fees are ruled unconstitutional in 2017.
4. Wisconsin Republicans are perplexed as they debate only among themselves on various issues, especially in the Senate where minority leader Jennifer Shilling has already declared that the GOP “owns this legislature.”
5. In a pre-2018 appeal to the rural Wisconsin vote, Baldwin tries to pose for a picture with a Winchester Super X, but the photo shoot is interrupted when she panics after discovering the gun is a semiautomatic autoloader.
6. The Assembly and Senate federalism committees find themselves very busy by year’s end after various federal reforms devolve considerable decision-making power back to state legislatures.
7. After realizing they are the party of free markets, Wisconsin Republicans finally repeal the Minimum Markup law.
8. Democrats decide on their candidates for Governor and AG for 2018. After hearing the news, Republicans hit Maduro’s and share cigars over their opponents’ painfully thin benches.
9. Rex Tillerson, coming off a bruising confirmation process and discovering the depth of Obama’s foreign policy mess, is found trying to escape in a dingy to a remote offshore oil rig but is caught by the coast guard and forced back to his Washington office.
10. In their quest for new transportation revenue, Assembly leaders start seriously considering tolls for the state’s interstate system.
Whole thing here.
I talked with Vicki McKenna on her WIBA show about the Electoral College vote, which took place at the state Capitol yesterday.
I was there to cover the event and document the anticipated antics of the inevitable protesters. Possibly the two most noteworthy protester moments were when one lady screamed “We’re all going to go to war and die because of you!!!” at the electors and another who audibly thanked all the people who came from out of state to help with the protests. RPW and Electoral College chairman Brad Courtney also gives his perspective.
Listen to the podcast here.
In today’s La Crosse Tribune I argue that proposals to raise the gas tax are the easiest solution, not the best solution. An excerpt:
Politicians and special interests have lined up to raise Wisconsin’s gas tax, a contentious issue that the recent election did not resolve. But the simplistic solution of a gas tax hike overlooks the complexity of the transportation funding issue and the buffet of alternative options available to legislators who are willing to be creative.
While Wisconsin’s “other season,” construction season, is quickly coming to an end, you still can’t drive more than a few miles in the state without finding a sea of orange construction barrels. There’s also the endless struggle over the contentious north-south corridor, which could put a four-lane highway through the La Crosse River Marsh.
Let’s acknowledge that there’s plenty of work to do as our region grows and demands on our infrastructure increase. Let’s also acknowledge that a gas tax won’t solve the problem. A breathtaking 28-cent-per-gallon hike — a 91 percent increase — would be needed to fully fund all of Wisconsin’s transportation priorities, according to a recent memo by the nonpartisan Legislative Fiscal Bureau.
By contrast, the state Department of Transportation’s 2017-2019 budget proposal does not raise the gas tax or registration fees at all. Instead, it redirects more funding to local governments, who will get the largest funding boost from the state that they’ve seen in 15 years. This proposal will help local governments carry out needed maintenance.
The DOT proposal would increase general transportation aid by $65 million, an increase of 8 percent for counties and 4.7 percent for municipalities over the last budget. That’s $14 million more for local roads and $5 million more for local bridges — the largest increase since 1998. It also boosts the highway maintenance fund to $1.7 billion, the largest that fund has ever been.
Whole thing here.
Photo credit: La Crosse Tribune
Periodically, RightWisconsin asks the chattering class from around the state (myself included) to weigh in on important topics. This week, they asked what the focus of the next legislative session should be.
After a sweeping victory at the ballot box last week, the opportunity to crank the reform furnace to the max has never been better. Legislators should work overtime to enact free-market, limited-government reforms – and they should be willing to listen to the rural legislators who pulled off some of the most impressive victories last Tuesday and will be important to expanding the GOP’s appeal beyond the WOW counties and the Fox Valley to cement a long-term majority.
Here’s what I wrote:
The legislature should focus on, in a word, opportunity. It should expand economic opportunity by tackling suffocating occupational licensing requirements. It should extend healthcare opportunity by enacting common-sense reforms that will embrace innovative new practices (and continuing to reject Obamacare’s Medicaid expansion). It should make opportunity equally available to all citizens via dramatic tax code reform. It should ensure tomorrow’s workforce has the opportunity to learn valuable, marketable skills by continuing to pursue education reform and connecting workers with good jobs. The list could go on.
The pendulum swings predictably between conservative and liberal control, and it will swing again some day. Right now, reform conservatives have a golden opportunity to do what’s best for Wisconsin’s future.
Whole thing here.