David Newby                                                                                                                                  March 10, 2008

414-581-0942      
   

Testimony in Support of "Healthy Wisconsin" 

   
            Thank you for the opportunity to speak to you today in support of “Healthy Wisconsin”.  As you know, the Wisconsin State AFL-CIO has been working intensely on the issue of guaranteeing quality, comprehensive, affordable health care to everyone in Wisconsin for well over seven years (to say nothing of other efforts that go back almost twenty years).  So we are proud to have been part of the process that got us to this proposal today.

            There has been a great deal of discussion—pro and con—about Healthy Wisconsin since the Senate added it to their version of the Budget last summer.  This discussion has been good.  First, it has served to make the issue of quality and affordable health care for all the top domestic issue in Wisconsin.  Second, it has demonstrated that it is indeed possible—and financially advantageous—to provide quality, affordable health care to everyone in Wisconsin.  And third, it has raised questions not initially anticipated by the authors of Healthy Wisconsin.

            I would like to commend Chairman Erpenbach for his tireless scheduling of hearings and forums on Healthy Wisconsin since its introduction.  I would also like to commend him for responding to what he and others heard at those hearings and forums by making changes to the proposal. 

            The phase-in for small businesses of the employer share of the payroll assessment that finances Healthy Wisconsin is especially important.  According to the Legislative Fiscal Bureau, only 38.7% of firms with fewer than 10 employees provide insurance for their employees.  But 70.1% of firms with 10 to 24 employees provide insurance.  So targeting the phase-in to small businesses with 10 or fewer employees makes eminent good sense, since these firms are most likely not to provide insurance currently and would therefore have a significant increase in costs if required to remit 10.5% of payroll from the first day Healthy Wisconsin is implemented.

            It is encouraging, too, that this phase-in is affordable by tapping in to some of the savings in the public sector.

            We were also pleased to see a family cap of 4% of Social Security wages so that a family with multiple earners is not paying an inordinately high amount as their fair share of the costs of Healthy Wisconsin.

            Detractors of Healthy Wisconsin keep insisting—indeed hammering—that Healthy Wisconsin requires a $15B tax increase.  This argument is simply untrue.  It is deceptive and disingenuous, designed to frighten Wisconsinites into thinking that the cost of quality health care for everyone in Wisconsin is far beyond our means. 

            Healthy Wisconsin funds health care in a different fashion—payroll assessments as opposed to premiums paid to insurance companies and HMO’s—but since those assessments replace currently paid premiums, we have to compare the two, not deceive people into thinking that Healthy Wisconsin will cost $15 B more than we are paying now.

            Indeed the estimate is that if Healthy Wisconsin were in effect in 2007, our total health care expenditures for those covered by the Plan would have been  $751 M less than what we spent last year if no changes had been made.  Furthermore, businesses that  provide at least some health insurance to their employees would have saved $686 M—and yet everyone in Wisconsin—including the currently uninsured and underinsured— would have the comprehensive, quality health care they need: guaranteed!

            So those who charge that “Healthy Wisconsin” is a massive $15 B tax increase are simply deceiving the people of Wisconsin.

            When everyone—individual and employer alike—pays their fair share, it is possible to provide the best health care for everyone in Wisconsin:  at a total cost less than we are paying today!

            But we also need to control costs in coming years:  not by taking it out of the hides of those who provide health care or pretending that we can cut costs by insisting that we all become better “shoppers” for health care, but by being more efficient and effective in the way we deliver care.  Healthy Wisconsin incorporates mechanisms to ensure that increases in health care costs are no greater than the National Rate of Medical Inflation (which they have been in most recent years).

            We also know that by dramatically reducing unnecessary bureaucratic, administrative, underwriting, and price negotiation costs and building quality and best-practice standards into the very structure of the health care system in Wisconsin that we can cut costs and keep them to an even lesser rate of inflation.

            In addition, by requiring that everyone chose a primary care provider, giving them a medical “home”, and providing incentives for preventive care and chronic disease management, we know from all recent medical research that these measures will both improve the health of our population and reduce costs below what we are paying now.

            Much more could—and should—be said in support of Healthy Wisconsin, but let me simply stress that in addition to improving health and saving money, Healthy Wisconsin would give us all greater freedom. 

• It would eliminate personal bankruptcies due to unpaid medical costs (which are responsible for almost 50% of all individual or family bankruptcies today).
• It would allow people to change jobs, while now they may well have to stay in a job they hate just so they have health insurance for themselves and their family.
• It would allow people to start new businesses, without having to take the risk of going without health insurance and knowing that they could recruit top-notch employees who would also be guaranteed excellent health care.
• It would allow people to retire early and still get the health care they need, while continuing to pay their fair share toward the cost of their care.  It would also allow someone to retire when they become eligible for Medicare, rather than having to work more years if they have a younger spouse who would have no access to health care once they were no longer covered by an employer’s policy.