By Tom Still
MADISON – For reasons that would require an actuary and a congressional historian to explain, Wisconsin gets the short end of the stick when it comes to Medicare. It always has, since the dawn of Medicare in the 1960s, and perhaps always will.
Wisconsin’s “donor state” status in Medicare has traditionally been two parts annoyance and one part point of pride. Wisconsin health-care providers grit their teeth over the state’s low Medicare reimbursement rates, which pay them less than providers performing the same service in New York, Texas or Florida, but they draw some solace from federal studies that rank Wisconsin and Minnesota as the top “quality of care” states.
Now that some version of ObamaCare is edging closer to a vote, any satisfaction that came from doing more with less is giving way to a realization that Wisconsin’s health-care “stick” is about to get even shorter.
Health-care reform without Medicare reform is likely to cost Wisconsin taxpayers billions of dollars over time. That’s because the “public option” plan preferred by President Obama and many members of Congress would force Wisconsin to subsidize the health-care sins of other states. Here’s why:
Under Medicare, the federal health-care system for the elderly, Wisconsin providers receive about 15 percent less than providers doing the same things in other states. If some form of Medicare becomes the “public option” alternative to private insurance plans, as favored by some in Washington, Wisconsin providers would again be underpaid – and not just for the elderly.
Why do the rest of us care if hospitals, nursing homes and doctors in Wisconsin aren’t fully reimbursed for Medicare services? Those costs don’t go away, and are mostly passed on to individual consumers and companies that provide health coverage for their employees.
Wisconsin could be penalized in another way by the wrong “public option” plan. Wisconsin has one of the highest health care insured rates in the nation, or, put another way; it has one of the smallest percentages of uninsured citizens. If everyone nationally is taxed equally to pay for the uninsured, Wisconsin residents and businesses will be taxed to pay for the uninsured in California, Texas and elsewhere.
However, if the tax applies mainly to businesses that do not provide insurance, each state’s economy will bear the cost roughly equivalent to what they will get back in federal dollars from the new program. In other words, Wisconsin businesses and health-care institutions wouldn’t be penalized – again – for trying to do the right things.
Obama appears attuned to the regional disparities in Medicare reform, and many members of Congress have pushed to end the inequity. U.S. Rep. David Obey, D-Wis., the chair of the House Appropriations Committee, has called the regional disparities “outrageous.”
So have leaders from major health-care organizations such as the Mayo Clinic, based in Rochester, Minn., and Wisconsin’s Marshfield Clinic. They say Medicare’s current funding formula (which reimburses providers nationally according to 89 local rates) pays the most to health-care providers and geographic areas that provide the lowest quality care at the highest costs.
Congress can accomplish health-care reform in a way which covers everyone and pays everyone more equally. The feds know how to do it. The Federal Employee Health Benefits plan, already in place, pays roughly equal amounts for care across the United States. Adopting that approach would avoid cost-shifting to private businesses in Wisconsin. By taxing only those businesses that don’t provide health care, the cost of reform levels the playing field among states in competing for businesses.
Wisconsin’s congressional delegation should demand that any “public option” plan under health-care reform doesn’t perpetuate Medicare inequities or penalize the state for its historically higher quality of care and coverage rates. Health-care reform that taxes Wisconsin more to pay for care and coverage gaps elsewhere isn’t reform at all.
Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.