Bring Us Your Sick:
Why "Healthy Wisconsin" Would Make The Dairy State a Health Care Magnet

By Rick Esenberg

The proposed Healthy Wisconsin plan seeks to create an entitlement that exists nowhere else in the United States. If you believe the Senate Democrats’ numbers (a commitment that requires more faith than reason), everyone will have not only have health insurance, they’ll have great health insurance – the equivalent of the “Cadillac” plan currently enjoyed by state employees. When it comes to health insurance, Wisconsin will become the American land of milk and honey. We will have someone that no one in the country enjoys.

The problem, of course, is that we cannot deny this wonderful benefit to anyone else. As written, Healthy Wisconsin would cover only those adults who are gainfully employed (or pregnant) or who have resided in the state for at least one year. This residency requirement is very unlikely to, as we law professors like to say, pass “constitutional muster.” 

There is this thread of constitutional analysis, most notoriously expressed by the U.S. Supreme Court in a case called Shapiro v. Thompson and more recently in Saenz v. Roe, holding, essentially, that a state may not deny benefits to newcomers. In Shapiro, for example, the Court held that the state of Wisconsin could not deny welfare benefits to newcomers. In Saenz, it ruled that California could restrict newcomers to whatever level of welfare assistance that they would have received in their old state.

Although different Justices explain the source of this constitutional requirement in different ways, it is clear that there is a constitutional “right to travel” which, among other things, requires that people who seek to become permanent residents of a state have the right to be treated exactly like other citizens of the state. From Day One.

It is possible that Healthy Wisconsin benefits could be denied to someone who comes to the state for an operation or course of treatment with no intent to stay. We may not be inundated with medical tourism.

But it seems inescapable that we would see medical migration, i.e., people choosing to move to Wisconsin and stay here because they can get something here that they cannot get elsewhere.

Who is likely to do this? Well, not to put too fine a point on it, sick people. People with preexisting conditions that cannot obtain coverage elsewhere are likely to see Wisconsin as the answer. Older people who may have the resources to retire but who cannot, given their age and medical histories, obtain coverage where they live or, even if they can, are drawn by the promise of free or inexpensive coverage here.

Insurers have a name for something that attracts people who are more likely to make claims or whose claims are likely to be larger. It is called “adverse selection” and any underwriter will tell you that it doesn’t take much of it to turn a profitable or break-even book of business into a financial disaster.

Wisconsin was once a welfare magnet, drawing people from states where benefits were, perhaps, several hundreds dollars per month lower than they were here. The stakes here are much larger here as we run the risk of becoming a magnet for those who are likely to incur tens or hundreds of thousands of dollars in health care costs.

We can, of course, debate whether universal or government provided health insurance is a good thing. But for this, and other reasons, providing such coverage in a single state where borders must be open and the Supreme Court will require newcomers to be treated like everyone else is a fool’s errand.

Thus even the few roadblocks that the current version of the plan puts in the way of Wisconsin becoming America's ER may not stand and fixing the bill to keep folks from coming here for the health care will be tough.

-October 8, 2007

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