Legislative preview: Health care committee to look at insurance subsidies, financing for single payer, role of Green Mountain Care Board

January 13, 2013

VTDigger

Representatives in the House Health Care Committee laid out their priorities last Thursday in the absence of Chair Mike Fisher, D-Lincoln, who was out of town.

The concern most frequently raised by lawmakers was how to handle the elevated out-of-pocket health insurance costs slated to hit Vermont’s lower income populations in 2014. [1] At that time, the state subsidized health insurance programs VHAP and Catamount will end, and all Vermonters above 133 percent of the federal poverty line, who don’t work for companies with more than 50 employees, will enter the state’s new health benefit exchange.

Vermonters between 250 percent and 300 percent of the federal poverty line, or individuals earning $28,000 to $33,500 annually, are facing a doubling of out-of-pocket costs comprised of premiums and annual spending maximums. These cost hikes would hit one of Vermont’s most vulnerable economic populations just three years before Gov. Peter Shumlin and many legislators hope to transition Vermont to a publicly financed, universal health care system.

The problem with providing those populations with current levels of subsidized coverage, the governor previously said, is that it could cost Vermont upwards of $18 million annually. Shumlin said the state doesn’t have that money simply lying around, especially since Vermonters earning 100 percent to 133 percent of the federal poverty line are moving into Medicaid in 2014, which will require more state investment.

On Thursday, Rep. Chris Pearson, P-Burlington, questioned whether the state could afford not to subsidize low-income populations, if the Shumlin administration still wishes to implement a single-payer system in the near future.

“I don’t think we can have … an erosion of confidence in the existing public programs and expect that we can then grow to have a uniquely ambitious public health program for the country,” he said.

Rep. Mark Woodward, D-Johnson, called for a “deep dive” on this issue. He challenged his committee members to come up with funding mechanisms this legislative session and present them to the House Committee on Ways and Means to figure out where the money would come from.

“I find it unacceptable that we’d take a Vermont program that is working well and that people really use and put them in the exchange that they can’t afford,” he said. “What are we succeeding in doing? The whole purpose of the exchange and federal health care laws was to increase people’s participation.”

Rep. George Till, D-Jericho, who is the sole physician on the committee, said that an “obvious answer” for funding a new subsidized health insurance program is to enact an excise tax on sugar-sweetened beverages. He acknowledged resistance to such a proposal from the Shumlin administration.

“We’ve got to find the money for people coming off the state programs,” he said. “We’re looking at about $18 million shortfall for costs those folks are going to incur.”

Other priorities and potential bills
How to finance a single payer health care system was another hot topic on the Health Care Committee’s table.

Doug Gage, R-Rutland, said this issue was his top priority.

“If my own party or my best friend came to me and said I have a bill for you to sign, but I can’t tell you what it’s going to cost and I can’t tell you who is going to pay for it, I’d tell them to go do their homework and come back and see me,” he said, referencing past legislation that has set the state on a track to implement a publicly financed system. Act 48, which was passed in 2011, called for the administration to submit a financing plan this year.

“We should be upright and forthright about who (a single payer system) is going to impact, how it’s going to impact, who’s going to benefit and who’s not,” said Gage.

In 2011, Harvard economist William Hsiao proposed financing a single payer system by using, in part, an 11 percent payroll tax on employers. [2]

The state contracted out to the University of Massachusetts Medical School to draw up a financing plan, which is due to legislators by Jan. 15, according to Act 48. The unveiling of that plan, however, was delayed until Jan. 24, the same day as the governor’s budget address. [3]

Meanwhile, at Thursday’s meeting, Rep. Paul Poirier, I-Barre, told the committee he plans to introduce a bill that would create a consumer protection agency for health care-related issues. The new agency, Poirier said, would be structurally similar to the relationship of the Vermont Department of Public Service to the Public Service Board, a quasi-judicial body like the Green Mountain Care Board.

“The Green Mountain Care Board is now kind of the judge and the jury,” he said. “We’re going to create a health care consumer office that would have the authority to intervene on any matter over health care issues coming before the Green Mountain Care Board.”

Poirier also aims to create legislation that does away with an assessment on small employers for funding the Catamount health program. He said that assessment raises about $8 million to $9 million annually.

Other potential legislation coming down the pipeline includes a bill pertaining to medical malpractice and a bill that would aim to raise awareness of the exchange.