Less government, but more pain?

The direction of health reform under Wisconsin’s Republican-controlled executive and legislative branches has grown more evident in recent days, as the 2011 legislative committee chairmanships were appointed and Governor-elect Scott Walker talked up health savings accounts and Utah’s health insurance model.

Walker long ago made it clear that, as governor, he’ll fight the federal health reform law as best he can. But he also recognizes the law will continue to roll out, including the requirement that states set up health insurance exchanges through which people can shop for health plans. If states don’t get their own ball rolling on the exchanges by 2014, the federal government will do it for them.

In a recent speech in Madison, Walker said he likes Utah’s insurance exchange model for Wisconsin. Utah offers an online portal through which employers can make defined contributions, or set dollar amounts, toward the cost of employees’ health insurance. Individuals then choose the health plan that best matches their own needs and pocketbooks.

The Utah model is consistent with Walker’s view that less government is better for health care. Also consistent was Walker’s recently-announced plan to eliminate state taxes on health savings accounts. Republicans have tried for years to end state taxes on HSAs; Wisconsin is one of only four states that still taxes contributions toward accounts set up to cover health care expenses. Democrats have fought attempts to eliminate the deductions because of the impact on state tax revenue. But, with a Republican-controlled Legislature starting in January, Walker will have the muscle to push through those tax cuts.

The appointments of legislative committee chairs for next year also reflected Wisconsin’s shift toward a health reform model that rests on less government and more tax breaks. On the Senate side, Sen. Leah Vukmir (R-Wauwatosa) will chair the Health Committee and Sen. Frank Lasee (R-DePere) will head the Insurance Committee.

A pediatric nurse, Vukmir’s track record in the Assembly, where she had chaired the Health Committee, was to side with big business and industry when it came to bills calling for new mandates on insurance coverage.

Vukmir also has spoken in favor of HSAs. So has Lasee, who chaired the Insurance Committee when he served in the Assembly. Lasee also has a track record of opposing mandated benefits.

In the Assembly, Rep. Jeff Stone (R-Greendale), rumored to be a possible candidate to replace Walker as Milwaukee County Executive, has been tapped as Health Committee chair, while Rep. Kevin Petersen (R-Waupaca) will chair the Insurance Committee. In an interview this week with Waupaca Now, Petersen said his committee will “look at every regulation and mandate in Wisconsin” when it comes to insurance.

As of this writing, Walker hasn’t yet signaled who his cabinet and leadership preferences will be. But, names churning through the health care industry’s rumor mill as possible contenders for the Department of Health Services secretary include Susan Dreyfus, Kitty Rhoades and Dennis Smith.

Dreyfus, a Republican from Waukesha County who served in Gov. Tommy Thompson’s administration, is the current secretary of the Washington State Department of Social and Health Services. In the private sector, Dreyfus was executive vice president of strategy at Rogers Behavioral Health System in Oconomowoc and senior vice president and chief operating officer for the National Alliance for Children and Families and Families International Inc.

Rhoades is the Republican state representative from Hudson who chose not to run for re-election this year. During her six terms in the state Assembly, she served as co-chair of the budget-writing Joint Finance Committee, where she developed an expertise in Medicaid funding issues.

Smith, now senior fellow in health care reform at The Heritage Foundation, was the director of Medicaid and state operations at the federal Centers for Medicare and Medicaid (CMS) during the George W. Bush administration. Smith was appointed to the post by Thompson, then secretary of the U.S. Department of Health and Human Services.

Whoever gets the nod for Walker’s cabinet picks, will, along with lawmakers from both parties face the unenviable task of fixing the state’s $3.3 billion budget deficit. Since Walker and the GOP-run Legislature are committed to not raising taxes, that can only mean big cuts in government programs and services.

To make a dent in the deficit, everything will have to be on the table, including Medicaid and BadgerCare, the state’s health care safety nets for the poor. The programs account for a major portion of the state budget, and Walker already said during the campaign that he favors cutting or putting time limits on BadgerCare, which is part of the Medicaid program.

That won’t be easy, as Wisconsin’s enrollment growth in Medicaid during the recession has far outpaced the national average. Today, about 20 percent of the state population is covered by Medicaid.

The future leadership’s treatment plan for the state’s fiscal health has yet to be written, but from here the prognosis looks grim.

(Note to TCD readers:  This week’s column will be my last for a while, as I have accepted a new job with a business magazine publishing company. Thanks for reading my “Views” over the past year; I do hope to contribute an occasional column to TCD in the future.)