Targeted at companies with between two and 50 employees, BardgerChoice would set up an online state portal offering access to a range of competing plans. But there's a catch: it's mandatory. Small businesses wouldn't be required to insure their staffers, but any that do would be forced to buy their insurance through the portal. BadgerChoice would use what's known as a "community rating" in its pricing, which averages out the cost to all participants.
"One reason why small businesses pay a lot for insurance is that if you have five young healthy employees and two with high blood pressure, those two explode your cost. A community rating levels the playing field," says Seth Boffeli, a spokesman for the Wisconsin Department of Health Services. That means some employers would end up paying more for insurance than they otherwise would. The state will provide a subsidy to those employers, Boffeli says.
In a November interview with the Business Journal of Milwaukee, Department of Health Services secretary Karen Timberlake said the state's previous attempts at small business health coverage didn't work because they were voluntary for business owners. But Bill Smith, director of the Wisconsin Chapter of the National Federation of Independent Business, said his organization objects to mandatory plans.
"We've got 12,000 members, and it's not likely we'll support a plan that mandates insurance or eliminates the role of insurance agents," Smith told the Business Journal. "I don't know if BadgerChoice would fail, but I think a lot businesses would probably fail under it."
Right now, a year after its announcement, BadgerChoice remains in the preliminary stages.
"We're in the planning phases and we don't know yet if this will be in the governor's budget proposal in February," Boffeli says. Even if it is - and if the legislature approves it - the plan wouldn't take effect until 2011.