Democrats in the Wisconsin Legislature are circulating a bill that would create a BadgerCare Public Option, echoing the very policy that spiked health insurance costs nationally.
Wisconsin Democrats have introduced legislation to establish a BadgerCare Public Option, aiming to address rising health insurance costs by allowing residents to purchase coverage through the state’s BadgerCare program regardless of income.
The bill, LRB-6040, directs the Department of Health Services (DHS) to seek federal approval for a purchase option under BadgerCare. This would enable individuals above current eligibility limits to buy into the program with premiums set similar to rates paid to managed care contractors and a minimum actuarial value of 87%. It also includes provisions for small groups of 50 or fewer employees to purchase coverage.
Additionally, the proposal requires DHS to develop and request federal approval for a Basic Health Plan under the Affordable Care Act, covering individuals with household incomes up to 200% of the federal poverty level. The bill further directs the Office of the Commissioner of Insurance to establish and operate a state-based health insurance exchange, incorporating enrollment access to the BadgerCare purchase option. Wisconsin currently relies on the federally facilitated exchange, HealthCare.gov.
Democrats, including Rep. Tara Johnson (D-Town of Shelby), argue the measure would provide affordable, comprehensive coverage for those who earn too much for traditional BadgerCare but struggle with private market costs. They highlight benefits for small business owners and farmers, enabling competitive employee benefits.
The push comes amid significant increases in ACA marketplace premiums for 2026, following the expiration of enhanced federal premium tax credits at the end of 2025. Reports indicate average benchmark premium increases of around 17.4% in Wisconsin, with some areas and scenarios showing hikes from 30% to over 800% depending on location, age, and income.
Enrollment in the ACA marketplace for 2026 coverage fell to just under 290,000 in Wisconsin, down from nearly 307,000 the prior year—a drop of more than 17,000 individuals—according to Centers for Medicare and Medicaid Services data.
Critics of public option approaches note that government-sponsored plans have not consistently delivered lower premiums when competing on a level field with private insurers. Experience in other contexts shows limited or no savings relative to private options, and broader implementations could face challenges in controlling costs without impacting provider participation or shifting expenses elsewhere in the system.
The bill requires DHS to submit reports on waiver status and actuarial analyses, with implementation contingent on federal approvals. A state fiscal estimate is to be appended to the legislation.
