Tuesday, March 22, 2011

Republican Party Obfuscates


H.202, the House health care bill will be debated in the House on Wednesday, March 23rd and Thursday, March 24th. In addition Senate Health and Welfare Committee will be holding public hearings on S.57 – the Senate version of the health care bill. These hearings will be held on Thursday, March 24, 2011 in Room 11 at the state house for Vermont business community, employers and employees; Thursday, March 31, 2011 in the House chamber for the Vermont consumer community; and Thursday, April 7, 2011 in Room 11 for the Vermont provider community.

Do not let these opportunities go by. Now is the time to voice your concerns and to ask those questions which seem to have no answers. Email or call your Representative(s) now as H.202 is being debated in the House. You can also testify in person at the Senate hearings noted above or submit written testimony to the Senate Committee by emailing Agatha Kessler at akessler@leg.state.vt.us. The Senate bill can be found here.

Most Vermonters will agree that the current system has serious problems primarily because of its escalating costs and lack of built-in cost containment. In addition Vermont has 47,000 uninsured, half of whom are eligible for Medicaid, leaving approximately 24,000 Vermonters without insurance. In response the Administration and majority legislature are pursuing a completely new approach to health care. However, the question needs to be asked: Aren’t there better ways to deal with rising costs and the uninsured without completely changing the current system, driving insurers out of the state, and imposing government control over our health care? Aren’t there other approaches to be considered? For example, why not open the market up to the insurance industry across state lines to lower the cost of premiums, get serious about tort reform, continue to tweak Catamount to help the uninsured and continue to follow the Blueprint for Health to improve outcomes for everyone rather than turn the whole system upside down when we don’t even know where we are going?

As you may know, the House and Senate health care bill does primarily three things:

It lays the groundwork for development of an Exchange. The Exchange is intended to serve as a marketplace where Vermonters can compare and purchase health insurance. The federal health care reform law gives states broad authority regarding the operation of exchanges, including how many there are within each state, the breadth of the population included in the exchange, and the requirements placed on insurers who provide coverage to exchange enrollees. This definitely sounds good and as conceived by the federal health care reform law does have potential – except that the Administration believes they can use the Exchange as a platform to get to single payer/universal health care and are trying to only let one insurer into the Exchange – even though federal law requires more than one insurer in the Exchange. The Exchange would become operational in 2014 and the Administration is proposing that the Green Mountain Health Reform Board would develop a plan for the legislature by 2012 to supply the details of the Exchange design.

The Administration is proposing Vermont include in the Exchange employer groups with fewer than 100 employees (expanding the current small group market from up to 50 to up to 100 employees). They also propose that state and municipal employees (including teacher unions) become part of the Exchange, and that Vermont integrate Medicaid, Medicare and workers’ compensation medical payment coverage into the Exchange. A number of waivers will be needed to accomplish this.

It establishes the Green Mountain Health Reform Board. This 5-person Board would be analogous to the Public Service Board and would be appointed by the Governor. The Board will control the entire $5 billion health care system. Members would be responsible for all aspects of development of the Exchange and the design of the single payer system. They will develop cost containment strategies, including payment reform, design the benefit package under the single payer/universal health care system and set the budget and the global payments to providers. This Board would also be given the authority to review and approve health insurer premium rate increases. The cost of this Board is estimated to be approximately $1.3M/year.

As proposed, the Legislature is completely cut out of any governance process and has no means of overriding the Board’s decisions. Immediate concern has been expressed by legislators of both political parties and by Vermont’s health care providers because all decisions would flow through this group. The power of this group is beyond anything Vermont has seen because it is essentially in command of 20 percent of the state’s economy. The tough decisions will be made by the Board, not our elected leaders, and in so doing, the public is largely removed from the debate as well.

It puts in place the superstructure for the single payer/universal health care system but with no details. The Administration will ask for permission from the federal government to transform the Exchange into a publicly financed Exchange, which would be the single payer system. At that point, current premium payments by individuals and employers would be eliminated unless an employer chooses to continue providing health insurance coverage. All Vermonters would receive coverage by virtue of their residency for a package of health care benefits, coverage would not be linked to employment and most Vermonters would pay into a system for financing this coverage. This would be the single payer/universal health care system. The Administration has yet to propose the financing mechanism for the single payer/universal health care system, and will not do so until 2013 through the Green Mountain Health Reform Board.

All employers will be “asked” to join in the single payer/universal health care system as the state is not permitted to mandate participation; however, all Vermont employers will be subject to the payroll tax, assuming that is the financing mechanism chosen. If an employer chooses to keep its own insurance covered, that employer would be paying twice (once through the payroll tax for single payer/universal health care and then for its own insurance plan). Finally, the Administration has stated that employers would be free to provide supplemental coverage to their employees, financed completely by the employer/employee, on top of the payroll tax.

Using the payroll tax as the way of financing the system raises significant equity issues. Those who do not have a taxable wage would pay nothing as well as those at the lower end of the income scale. Those Vermonters remaining would shoulder the burden, in return for what most people would consider to be drastically reduced benefits.

As you can see there are many unanswered questions. For instance, how will this reform be financed and why is the financing proposal being delayed 2 years? The net effect will be to destroy the current system and begin to replace it before we know what the new system will cost. This will result in a de facto single payer/universal health care system. By its very nature, the proposal eliminates the “safety net” of a private insurance market; will there be a Plan B in case things do not turn out as expected? Will it be sustainable over time?

What will happen if Vermonters get care outside Vermont – will it be covered and what will Vermonters have to pay for it? How will border issues be addressed, i.e., if a New Hampshire employers have employees who live in Vermont, and vice versa? What will this plan do to the business environment in Vermont? Will it encourage or discourage new businesses?

Finally, what about state employees? Will they be required to be covered under the single payer/universal health care plan? Their right to bargain for health care benefits is in statute (3 VSA 904 and 3 VSA 631). If the state requires that they be covered under the single payer, the state would have to repeal these statutes, taking away their bargaining rights. The loss of bargaining rights would also apply to educators and municipalities. Being able to bargain for “wrap-around” or supplemental insurance will do nothing to contain costs and will raise questions of single-payer/universal health care equity. See the AP story on this here. According to the current version of H.202, the state will select an insurer to offer one plan with two levels of out-of-pocket expense. On January 1, 2014 those will be the only choices available to individuals and small businesses to obtain health insurance coverage in Vermont.

The fundamental problem is: there are currently no answers to basic and important questions. Vermonters are being asked to go along with a plan without any answers and are being asked to just trust that “they” will release the details later. Can we do this with our health care system that is $5 billion and 20% of the state gross product? Why is the plan being pushed through so quickly? Why at the last minute does H.202 now refer to single payer as “universal health care”?

Reach out to your State Representative(s) and Senator(s) now and require them to slow down the process. All that needs to be done right now is to allow the Exchange to go forward in accordance with Federal law. The Administration and the Legislature can then pursue alternatives that will begin to address cost containment, establish performance measures and assist the uninsured without expending $1.3M/year in support of the 5 member Green Mountain Health Reform Board. It will take time to develop the right system for Vermont and we should move ahead deliberatively and thoughtfully, engaging the public and having answers to questions at the ready to ensure public understanding and commitment rather than pushing through a bill that does not provide answers to basic and important questions. Your concerns are being heard. H.202 as passed out of the House Health and Welfare Committee now requires a fiscal analysis from the Legislature’s Joint fiscal Office by April 21st. So keep asking those questions and sharing your concerns.

{ 1 comment… read it below or add one }

Stephen Marshall March 22, 2011 at 3:00 pm

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You’re not up-to-date on the bill. The house committee has issued a working draft to create a nominations board, with two year terms for 11 members, essentially just to identify qualified persons for the Green Mountain Care board.

I can understand doubt about the benefits package, since it hasn’t been created so far, but you have no right to assert they will be “drastically reduced”. You just don’t know. And two things: The people planning this thing will be covered by it, too, so its not going to be shabby, and those who want additional coverage will have the entire insurance market to get it from.

The arguments you have used to slow things down are edge issues. A complete and detailed plan would be terrific, but as yet we have not found any crystal ball to figure out the best plan. The fact is that these details will be resolved by thoughtful people from all political parties and there is no reason to worry about the pace. The fact is that the costs of health care are accelerating so fast we cannot afford to wait a year before implementing a plan to change the system. And besides the fact that the current system is a market failure, and there are thousands of people who need health care and are not now getting it, once the destructive properties of the profit motive are removed from the health care and health care financing systems, the terrific efficiencies gained will make Vermont a great place to do business.

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