Health Care Advocates Duel Over Funding For Expansion Studies

April 12, 2016

Vermont Digger 

There’s a showdown in the Statehouse between two universal health care advocates who are seeking funding to move closer to single-payer health care in Vermont.

Peter Sterling, the architect of Dr. Dynasaur 2.0, has persuaded the House to give his coalition $310,000 in state and federal money to study how to expand one of the state’s most successful Medicaid programs to everyone under age 27. The program currently covers low-income and lower-middle-income kids up to age 18.

The House’s budget approved $140,000 in state funding and $170,000 in federal money as an investment through the state’s Medicaid program to help reduce the number of uninsured or underinsured Vermonters. The legislation has now moved over to the Senate for final approval, and Sterling is seeking to secure $90,000 more for a robust study.

In the Senate, Dr. Deb Richter, a family doctor, is asking lawmakers to expand the Dr. Dynasaur study further to include how Vermont could provide state-funded primary care to people of all ages. Richter has a piggy-back amendment in the Senate Health and Welfare Committee, but no funding is attached.

Sterling and Richter testified about Richter’s proposal to study both policies Friday at the committee’s hearing. Members of Sterling’s coalition of nonprofit organizations filled the room, and Richter’s lobbyist poked his head in. The tension was palpable.

“The fact is that Dr. Dynasaur people and the lobbyist have been working for about a year,” Sen. Claire Ayer, D-Addison, said in an interview. “They have money in the House budget to go forward with a study.


“And the flip side of that is that universal primary care doesn’t have any money in the budget. Any way you look at it, it’s one group with money and one group without.”

Ayer said her goal Friday was to figure out if the two studies could be funded together with the $310,000 that the House already allocated for Dr. Dynasaur 2.0. The two parties didn’t reach consensus.

The amendment in question would be tacked onto this year’s health care reform bill, H.812. The draft says the Legislature intends to move forward with one or both proposals and have a study done by Dec. 15.

Under the amendment, both studies would need to include a determination of the “incremental and administrative costs” of funding the program; an analysis of previous studies that show the effects of expanding health care coverage; and “a menu of tax options” that lawmakers could use to determine how to fund each program.

Sterling told Ayer that he needs the full $310,000 or more to facilitate a robust study that answers as many questions about the plan as possible, instead of just estimating tax increases. He said it would be a “public relations nightmare” to trim funding from his study in order to fund a study of universal primary care.

Richter told Sterling she would be happy to work with him. Ayer told Richter that was an easy statement for her to make because Sterling is the one who already had the $310,000 in funding approved by the House.

DETAILS OF DR. DYNASAUR 2.0

Dr. Dynasaur 2.0 would triple enrollment in the Medicaid program that currently serves about 60,000 lower-income children and pregnant women. The annual cost of treating each of those patients is around $4,000. Sterling also wants the expansion to increase how much doctors are paid to see those patients in order to make Medicaid more solvent.

The biggest winners under the Dr. Dynasaur 2.0 plan would be children and young adults, who would get free or low-cost health insurance through the government. They or their parents would not be responsible for paying commercial insurance premiums — and Vermont has some of the highest in the country.

Parents would not need to buy family plans from private insurance companies because their kids would be covered under Dr. Dynasaur 2.0 through age 26. And Sterling has designed his proposal with the hope that families wouldn’t have to pay the so-called Cadillac tax on family plans when the law goes into effect in 2020.

On the flip side, there’s a general consensus that the Dr. Dynasaur plan would push up insurance premiums for everyone else because the youngest, healthiest people would be taken out of the private insurance risk pool and put on a government program. But exact numbers are hard to come by.

Sterling said any premium increases as a result of Dr. Dynasaur would largely apply to childless people over 27 who make more than $47,000 a year, childless couples making more than $64,000 a year, and employers that offer insurance coverage to people over age 27.

Wages are low in Vermont, according to Sterling, and between 75 percent and 80 percent of Vermonters make below those thresholds. He estimates that any health insurance premium increases would apply only to the top 20 percent to 25 percent of families.

“I think we can make the case to the top 20 percent of Vermont income tax payers that paying a little bit more in their premiums to make sure more than 100,000 young people have access to affordable health care,” Sterling said.

“We’re not asking for new money (from parents and young adults),” he said. “We’re going to reduce the amount you’re sending to a private insurance company and raise your taxes to pay for health care in a more efficient way.”

UNIVERSAL PRIMARY CARE

Under the federal Affordable Care Act, preventive services are free with any type of insurance. However, certain patients must pay out-of-pocket costs for follow-up visits for hypertension or foot checks every three months for diabetics.

“This is really the stuff we should be giving away for free,” Richter said. “I use the analogy of free condoms. The condoms obviously cost something, but you’re preventing something that’s much more expensive.”

Richter’s universal primary care plan would pull the cost of seeing family doctors, mental health professionals and substance abuse counselors out of Vermonters’ health insurance premiums and into the taxes they or their employers pay.

A study released in January that weighed a variety of cost-sharing and reimbursement options said the cost would be between $200 million and $300 million in 2017. The preliminary study recommended another study to figure out administrative costs and legal maneuvering under the Affordable Care Act.

Richter estimates that the amount of taxes to be raised to fund a universal primary care system would be lower because Vermonters are already paying for so much of the system through their insurance premiums. She estimates a 1.5 percent payroll tax would raise $175 million for the program.

She said the plan would still work if Vermont moves forward with the all-payer model, in which Vermont wants to set up a single organization to absorb health care payments and serve as an intermediary between insurance companies and doctors.

Richter said the tax money would go to Vermont’s accountable care organization, which would pass the money on to the doctors. She said family doctors would be paid flat fees per month to see a certain number of patients, and they would enjoy a lower administrative burden because they wouldn’t have to bill different insurance companies for different procedures.

Richter said that without a plan to stabilize primary care in Vermont, people would have more trouble than they are right now finding a primary care doctor. They would therefore end up going straight to specialists for each problem that could otherwise be handled at a normal office visit.

“Unfortunately you’ll end up with … every single time you have a problem, you’ll end up with four different doctors,” she said. “And that is where costs are going to go through the roof.”

CAN THE LEGISLATURE FUND BOTH STUDIES?

Sterling formally launched the campaign to study Dr. Dynasaur 2.0 in December, flanked by House Speaker Shap Smith, D-Morristown, and members of a coalition of more than a dozen statewide organizations.

Members of that coalition are reluctant to discuss the tension between the two competing paths. Sterling said there are simply two different proposals, and they likely won’t move forward together in the future.

Vermont Businesses for Social Responsibility, a liberal business group, was part of the original coalition. The group has now broadened its stance and is asking the Legislature to fund studies of both universal primary care and Dr. Dynasaur 2.0.

Dan Barlow, a lobbyist for the organization, said his members want a universal health care system in which insurance is decoupled from employment, because the health care system is broken and “unfair to employers right now.”

“Our long-standing health care policy more closely aligns with universal primary care, so that’s the one that a lot of my members are really excited about, but we do think that both studies should be funded, and the Legislature needs more information going forward,” Barlow said.

Lindsay DesLauriers, the state director of Main Street Alliance, another left-of-center business group, said the group would want to fund both studies “in a perfect world,” but is prioritizing Dr. Dynasaur 2.0 in the current legislative session.

“The bottom line is that it addresses the affordability piece for families,” DesLauriers said. She said the proposal fits right into the Affordable Care Act and would “basically protect Vermont from the implications of the excise tax.”

Senate Health and Welfare will take more testimony on H.812 this week.