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'Healthy Wisconsin' may be bad medicine for border areas

There's concern that the universal health care plan included in the Wisconsin Senate version of the biennial budget may cause problems for border areas.

There's concern that the universal health care plan included in the Wisconsin Senate version of the biennial budget may cause problems for border areas.

Under the "Healthy Wisconsin" plan, Wisconsinites who work in Minnesota and keep their employer's health insurance would still face a 4 percent assessment or tax on their total Social Security wages.

"It would be a new tax for nothing for thousands of commuters in western Wisconsin," said Sen. Sheila Harsdorf, R-River Falls.

The plan being pushed by state Democrats is funded by a 4 percent individual tax and a 10 percent employer payroll tax.

While commuters could drop their Minnesota employer's health care insurance and take up the Healthy Wisconsin plan, Harsdorf said they would face a cost increase.

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"It's still going to be a cost increase for them because I doubt the employer would give them a pay raise if they dropped that coverage. That just doesn't happen," she said.

One Healthy Wisconsin author says commuters may just want to drop their employer's plan.

"There wouldn't be any reason for the employee to keep the plan," said Sen. Kathleen Vinehout, D-Alma, whose 31st District covers half of Pierce County and a large border region.

However, Harsdorf believes that commuters would want to keep their employer's plan if they use health care providers in Minnesota.

"Border communities have different provider networks that might not participate under Wisconsin's plan," Harsdorf said.

That may be a problem, Vinehout agreed.

"That's very much a concern of mine," she said.

Vinehout said Minnesota providers would be encouraged to submit bids to Healthy Wisconsin to become providers under the system. If not, commuters could still use Minnesota health care providers under the fee-for-service provision of the plan. But it is unknown what additional costs the individual would have to pay.

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"We don't know if it is going to be more expensive," Vinehout said.

Harsdorf is also concerned about the impact the bill would have on bringing businesses into the state.

"Border communities know well that job providers are mobile, and this effort could have devastating consequences," Harsdorf said.

Vinehout disagrees and says that Healthy Wisconsin would only make the state more attractive to businesses.

"The talk that higher taxes would drive away businesses is fallacious," Vinehout said.

She added that over time, companies would see their health care costs fall.

However, Bill Rubin, who heads up the St. Croix Economic Development Corp., says the plan would be detrimental to bringing businesses into the state.

"One Minnesota company we are working with now has raised it as an issue and after they looked at Healthy Wisconsin they see it as a negative to relocating to Wisconsin," Rubin said.

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Harsdorf is also concerned that under the plan anyone who lives in Minnesota, but is self-employed in Wisconsin, would be eligible for the plan and this might open the door to anyone who wanted lower-cost healthcare.

"How many non-residents would qualify based on this provision?" Harsdorf said.

The current bill does not give a definition of "self-employed" but creates a governor-appointed Healthy Wisconsin Board to oversee the program and create a definition.

"How much business would have to be done in order to be considered self-employed?" she asked.

Vinehout said that when Healthy Wisconsin was drafted, this issue received considerable discussion.

"That's why we put in a 12-month waiting period for nonresidents," Vinehout said.

In a memo to Harsdorf, the non-partisan Legislative Fiscal Bureau noted that out of state residents who are self-employed in Wisconsin would be taxed at a rate of 9 to 10 percent of their Social Security wages. But even though they would be taxed, Harsdorf believes these nonresidents would still be benefiting at the expense of Wisconsin taxpayers.

"I don't believe that the 9 or 10 percent would cover the cost," Harsdorf said.

Healthy Wisconsin is estimated to cost $15.2 billion a year and if approved would begin in 2009.

Brady Bautch can be contacted at internet@rivertowns.net .

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