Catamount Health Costs

By: Marge Power, VT for Single Payer Supporter, Montpelier

Catamount Health is a State health care insurance program that helps eligible Vermonters buy health insurance from private insurance companies, Blue Cross/Blue Shield and MVP. Why would the State pay private insurance companies when it has the capacity to administer the program directly? Ask Governor Jim Douglas. He demanded this structure to prevent his veto of this extension of health insurance coverage to more Vermonters. In return the legislature demanded a study of the administrative costs of this arrangement.

On February 20, 2010, The Center for Health Policy, Planning and Research at the University of New England in Maine released the study, entitled “Administrative Cost Effectiveness of the Vermont Catamount Health Program”. The findings will not surprise any reader of this website:

    • Total estimated FY 2010 administrative costs for the Catamount program are nearly $6.8 million.
    • Administrative expenses as a percent of total Catamount enrollee expense was 8.7% for BCBSVT covered enrollees and 13.6% for MVP covered enrollees
    • Accounting for added OVHA administrative functions, administration percentages increase to 13.3% for BCBSVT covered enrollees and 18% for MVP covered enrollees.

The report states that if the private insurers were taken out of the program the savings would be in the order of $2.7 million or 39.6% of current administrative costs; the State would see savings of approximately $1.1 million. (We can probably assume that the program as presently constituted has already annually wasted similar sums in the previous years of the program.)

For single payer advocates, these findings merely serve to reinforce the conclusions of experts going back years and years, in states all over this nation and countries abroad, that private insurance is an unduly expensive and wasteful way of paying for health care.

This week the House Health Committee will be learning more about this report with testimony on Wednesday at 10AM and Thursday at 9:15. They will also be hearing from the president of Blue Cross on Tuesday morning. For schedule details visit our calendar. If you have the time to sit in on any of these committee meetings please post your thoughts.

Leave a Reply