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On Friday, November 9th, leaders in the health care, medical and business community voiced their support for a state-based health insurance exchange for Wisconsin.  And it couldn’t be more timely with Governor Walker having to inform the federal government by tomorrow (Friday, November 16th) whether he will opt to have a state-based exchange, a federal exchange or a state-federal partnership exchange. 

We at WISPIRG concur with their announcement and would like to echo the points made by the Wisconsin Medical Society, the Wisconsin Hospital Association, and the Wisconsin Association of Health Plans in their letter submitted last Friday, November 9th.  We agree that the “correct choice for Wisconsin is to steer its own course to the greatest extent possible by beginning the process of operating a Wisconsin-run health insurance exchange.”

We applaud these organizations and their leaders for taking this stand which is in the best interest of Wisconsin consumers and small businesses.

We understand that the Affordable Care Act and its core components, including the health insurance exchanges, have become highly polarized and partisan, despite being solutions that have been embraced by both Republicans and Democrats for many years.

But, it is a time for cool heads to prevail and for Governor Walker and state leaders to do what is right for Wisconsin. 

Here is my take on why a state-based exchange would be best.

Wisconsin consumers and small businesses know that the existing health insurance marketplace is broken.  Insurers don’t compete for their business, instead offering take-it-or-leave-it deals.  Important information about coverage is buried in the fine print, making it hard to know what’s really covered.  Instead of working to lower costs and improve quality, too many insurers focus on covering healthy enrollees and dumping the sick.  And costs are continuing their unsustainable rise. 

The creation of a new state-based, pro-consumer health insurance exchange can address these problems and offers Wisconsin the chance to build a better marketplace for health care.  With a long history of bi-partisan support, the exchange can help individuals and small businesses by increasing competition and improving choices in the state’s insurance market.  Done well, the exchange could negotiate for a better deal on coverage much like large businesses currently do, and allow consumers and small businesses to compare plans apples-to-apples.
While many Americans struggle with the rising costs and eroding quality of health care, the plight of small businesses stands out, as they lack the advantages possessed by larger businesses and face unique challenges.  Without the bargaining power to negotiate with insurers for better rates, small businesses often get a worse value for their health care dollars.  Because smaller businesses often lack a human resources department, they are often left alone to navigate an often-confusing insurance market. And in today’s system, small businesses can only offer one health insurance plan to employees, as opposed to offering a choice.

Wisconsin can design our exchange to address these problems, giving small businesses and their employees access to a meaningful choice of higher-value, more affordable coverage options.  For these reasons, over 100 small business owners in Wisconsin have endorsed the creation of a state-based health insurance exchange and join with WISPIRG in urging you to move forward on this important free market improvement for small business.  

Success is not assured, however, because creating a state exchange presents both a challenge and an opportunity.  The Affordable Care Act leaves states substantial leeway to define critical aspects of the exchange, including who is eligible to buy coverage through it, how aggressively it will set standards and negotiate with insurers, and who will run it.  Some of these choices will allow the state to improve on the law, but others could undermine the exchange’s ability to deliver better choices and lower costs.  If Wisconsin decides to move forward with a state exchange, it will be incumbent on Wisconsin leaders to implement an exchange that best serves consumers and small businesses by addressing these challenges and implementing an exchange that actually, increases competition, improves choices and lowers costs. 

If Wisconsin wants to provide better coverage options to individuals and small businesses and begin lowering the cost of care, it must take quick action to create a pro-consumer exchange that lives up to the promise of a better marketplace for Wisconsin consumers and small business owners.

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