Walker says his health plan puts families 'back in charge'

Nathan Gunderson talked to Scott Walker.
Nathan Gunderson, 31, showed his work to Wisconsin Gov. Scott Walker at Cass Screw Machine Products in Brooklyn Center, Minn., on August 18, 2015. Walker toured the company before presenting his health care plan.
Mark Zdechlik | MPR News

When Wisconsin Gov. Scott Walker came to Minnesota to unveil his alternative to the Affordable Care Act, he did not mention that health premiums are a lot lower in Minnesota than they are in Wisconsin.

The candidate for the Republican presidential nomination spoke at a Brooklyn Center manufacturing company, touting his plan to eliminate the Affordable Care Act as a way to reduce the cost of health care.

"We're going to replace it in a way that puts patients and families, your families, back in charge of your health care decisions," Walker said. "Pretty simple idea. We call it the 'Day One Patient Freedom Plan.'"

Walker's solutions are familiar Republican ideas: reducing regulation, clamping down on frivolous lawsuits and giving states more authority to set health care policy. Walker would preserve a cornerstone of the Affordable Care Act, providing tax subsidies to help consumers buy health insurance. But under his plan, subsidies would be linked to age rather than income. He offered only generalities on how he'd pay for the plan.

Create a More Connected Minnesota

MPR News is your trusted resource for the news you need. With your support, MPR News brings accessible, courageous journalism and authentic conversation to everyone - free of paywalls and barriers. Your gift makes a difference.

Campaign Manager Rick Wiley said there's a reason Walker chose Minnesota for the announcement.

"The exchange that Gov. Dayton put together is one of the worst in the country, so we wanted to come here to point out the fact that we have a great repeal-and-replace plan," he said. "And Minnesota seemed like a perfect place to do it."

Minnesota's exchange is still running, though far from perfectly, while other states — including Maryland and Oregon — have abandoned theirs.

Cass Screw Machine Products president Steve Wise
Cass Screw Machine Products president Steve Wise showed Wisc. governor and presidential candidate Scott Walker around the company on Tuesday, Aug. 18, 2015, before Walker presented his health care plan.
Mark Zdechlik | MPR News

Steve Wise, president of Cass Screw Machine Products, where Walker debuted his plan, said he disagrees with Walker on repealing the ACA. But he does blame the law for raising his health insurance costs — this year, by 35 percent.

"Let's put it this way," he said. "It's the law of the land now." He said that to repeal the ACA now would be "like a hijacking." Wise said he supports some Obamacare provisions, such as requiring insurers to cover people regardless of pre-existing conditions.

Walker was touting his approach in a state where more of the population has health insurance and premiums lower than in Wisconsin.

According to research from the Commonwealth Fund, Wisconsin premiums are 40 to 60 percent higher than Minnesota's this year.

Walker argues that regulation is driving up health care costs. But new research strongly suggests regulation is holding premium prices down.

Pinar Karaca Mandic, an associate professor in the University of Minnesota's School of Public Health, led a study comparing premiums in states like Minnesota, where regulators can reject rate increases, and those like Wisconsin, that don't review prices.

From 2010 to 2013, Mandic said, premium increases in states with strong prior approval processes were 10 percent lower than in states where premium increases are not scrutinized.

"To us that was big," Mandic said. "We were not necessarily surprised that states with prior approval authority had lower growth in premiums, but we were surprised by the magnitude."

Others point out that lower-income people are likely to pay more for coverage in Wisconsin than in Minnesota because the Badger State's Medicaid threshold is more restrictive. Cynthia Cox with the Kaiser Family Foundation says, for example, that a family of four with income between $24,000 and $33,000 makes too much to qualify for Medicaid coverage.

"They're going to be on private coverage," she said. "They may have more out-of-pocket exposure and they'll have to pay a premium, but they'll still receive subsidies for that, whereas in Minnesota those people would be covered for free under Medicaid and would have very limited out-of-pocket exposure."

Walker said his plan would be "budget neutral" and that it would amount to the largest tax relief plan in four decades. But it's impossible to verify those claims, because Walker leaves out estimates of cost or of the number of people who would be covered if the mandate to carry insurance were repealed.

Bloomberg Research Analyst Brian Rye said it's virtually certain that repealing the ACA would lead to fewer Americans having health insurance, which could hurt health insurance companies, saddle providers with more bad debt and, some say, drive up insurance rates for those who do buy coverage. Rye said that the removal of the mandate to buy insurance "obviously" would reduce the number of people who do so.

The head of Walker's presidential campaign signaled that the Wisconsin governor will likely be back in Minnesota talking health care and other issues.