Health Care Exchange Bill Clears Committee

February 16, 2012

VTDigger

The complicated and controversial health care bill cleared a House committee Thursday after weeks of tinkering and some close votes.

Eight members of the committee voted to approve the bill with the two Republicans on the committee, Jim Eckhardt and Patti Komline voting against.

For nearly a month, members of the House Committee on Health Care wrestled with legislation that lays the ground work for a health benefits exchange.

The confusion surrounding the exchange and the intersection between federal and state law created confusion both in and outside the Statehouse.

“It’s frustrating to know there’s a lot of it we don’t understand,” said Paul Poirier, a Barre independent who voted for the bill.

The exchange will serve as the marketplace for individuals and small businesses starting in 2014. Under the federal health care reform law, states have to create exchanges or the feds will do it for them.

The health insurance exchange has been compared with a travel website. The idea is that patients will have a better idea of the total cost of the out-of-pocket costs associated with insurance.

The details of just who buys insurance on the exchange and what benefit plans will look like stirred controversy throughout the beginning of the legislative session.

The original proposal included an all-in approach where businesses with up to 100 employees and individuals would have to purchase insurance in the “exchange.” The original bill also prohibited high-deductible “bronze” plans that many businesses offer their employees.

Amid an outcry from a large segment of the business community, the Shumlin administration and health care committee chairs shifted direction, making the bill more palatable to some of those interests.

The bill that passed out of committee Thursday limited the mandate to purchase insurance inside the exchange to employers with 50 or fewer workers and included the possibility of “bronze” plans. Gov. Peter Shumlin quickly issued a statement thanking the committee for its work.

The result is a mixed bag for business interests and advocates for a single-payer system.

Komline, a Dorset Republican who voted against the bill, said requiring small businesses to buy insurance on the exchange creates “angst” in that community.

She said not requiring people to buy insurance on the exchange would have changed her mind to vote yes.

“Businesses want to know and they want to plan,” she said. “Give them the information. With a year sunset on it, that can happen. I believe people should see what it is they’re going to be getting. If you’re so sure of it, let people transition into it.”

Komline, fellow Republican Eckhardt, Democrat George Till and Progressive Chris Pearson at one point Wednesday were all on board with the idea of letting people buy insurance outside the exchange.

On Thursday, Pearson changed his mind.

“I would always rather entice people than force them, but there’s a timeline issue around getting to where we really want to go with Green Mountain Care,” he said.

Pearson said he wants to see universal health care, and to get there the state needs to draw down as many federal subsidies as it can. Getting more people in the exchange faster will do that, he said.

Business groups like the Vermont Chamber of Commerce lauded the decision this month to keep larger businesses outside the exchange. Including businesses with 51 to 100 employees in the exchange would have added 15,000 people into the market. Advocates for the idea claim it will make the exchange more stable. Larger businesses expressed concerns they would end up cross-subsidizing smaller companies.

The decision to require people to buy insurance in the exchange caught fire from large and small business groups along with some single-payer advocates.

The administration held its ground on the issue, and the House committee voted to keep the mandate, which is not a requirement of the federal health care reform law.

The reasoning, according to the administration, is that the more people buy insurance through the exchange, the more federal tax subsidies the state can draw down. Under the federal law, people making up to 400 percent of the federal poverty level are eligible for these subsidies to buy health insurance.

Earlier this week, Steve Kimbell, commissioner of the Vermont Department of Banking, Insurance, Securities and Health Care Administration outlined a strategy where small employers can drop insurance for their workers without a penalty and send them to the exchange.

Getting more individuals in the exchange would allow the state to take advantage of these federal subsidies and “get health insurance off the backs of small employers,” Kimbell said.

The decisions whether to include bronze plans and mandate buying insurance inside the exchange both survived close votes in the committee this week.

Poirier voted against including the bronze plans Thursday, saying it goes against Vermont’s goals in reforming its health care system.

“It gets away from what I believe we should be moving toward,” he said. “It comes at a cost of getting people to utilize medical care sooner.”

While some businesses say bronze plans would allow them to offer more affordable plans, some advocates say it perpetuates an existing problem in the system.

Cassandra Gekas, a lobbyist for the Vermont Public Interest Research Group, said the high-deductible plans that would exist in the “bronze” category can leave people in a tight spot.

For low-income people, Gekas said, “It means they forgo care. It means bill collectors. It means bankruptcy.”

Even with protections embodied in the federal law that limit the amount people pay out-of-pocket, a bronze plan could still leave a family with a $12,000 bill, she said.

Till, the only physician on the committee, said it was fascinating to see members voting in different blocks on different issues.

“Not two single votes came down the same way,” he said.

He said two of the three issues he wanted, keeping the businesses to under 50 and not doing a basic health plan, which would take about 18,000 people out of the exchange, made it through. Till said he would prefer people have the option of buying insurance outside the exchange.

Gov. Peter Shumlin praised the committee in a statement issued by his press office.

“I want to thank the House Health Care Committee for its hard work and for taking these important steps forward on health care reform,” Shumlin said. “I sincerely appreciate the tenacity of the general assembly in continuing to work on this important issue. Real health care reform is a multi-year process that will require cooperation and hard work from all Vermonters.

“I also thank the House Health Committee Chair Representative Michael Fisher and Speaker Shap Smith along with his leadership team for their careful attention to and prompt action on this bill,” the governor said.


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