Premiums increase 18% despite $6 million surplus
Sunday, November 26, 2000
A state program that provides health coverage to almost 9,000 of Wisconsin's most desperate high-risk people has a surplus of more than $6 million, and some are concerned about how the governor and Legislature might want to use the excess funds.
Participants in the Health Insurance Risk-Sharing Plan are facing an 18 percent increase in premiums despite the surplus, said state Sen. Judy Robson, D-Beloit.
"The policyholders are some of the poorest, neediest and the most difficult to serve that we have in this state," said Robson, a registered nurse who heads the Senate Human Services and Aging Committee. "These are folks who have had a heart attack, who have diabetes or multiple sclerosis or some other debilitating condition. They cannot buy insurance in the open market (because the private sector won't insure them). So they turn to this high-risk-sharing program as their only salvation."
Robson said when she first learned of the surplus, she hoped the Health and Family Services Department would return the money to policyholders. "It just doesn't seem right that we have policyholders held captive, paying more than they need to," she said.
What troubles her most, she said, is that Gov. Tommy Thompson might claim the money to help balance the 2001-03 budget bill he is to submit to the Legislature early next year.
Joe Leean, secretary of the Health and Family Services Department, said the administration has no such plans. But he expressed concern that the Legislature might tap the money for other purposes.
Leean also said he doesn't consider the additional money a surplus. While a plan to return some of it to policyholders is under consideration, he said returning all of it would jeopardize the insurance program.
Three years ago, the Legislature moved the financially troubled program from the insurance commissioner's office to the Health and Family Services Department.
The program costs $60.1 million a year, of which the state pays almost $12 million. Premiums are supposed to pay 60 percent of the remaining $48.2 million, with the rest covered by assessments paid by health insurance companies and discounts from health care providers.
By law, policyholders are supposed to pay no more than 60 percent of the cost of the program. At the same time, the law requires that their premiums equal 150 percent of what other people pay insurance companies for standard plans, because of the risk involved.
Robson said a recent state audit showed policyholders were paying 70
percent of the cost. She said the audit also showed the plan had a $5.9
million surplus as of Dec. 31, 1999. By now, it must be more than $6 million,