Last week, the House Health Care Committee passed H.559, a bill which, if passed by the House and Senate, will significantly change the way anyone employed in a business with fewer than 50 employees obtains his or her health care coverage. This will affect approximately 120,000 Vermonters as of Jan 1, 2014. I encourage you to read the report and the Rutland Herald article below. Here is a summary:
- Group health plans will no longer exist for businesses with fewer than 50 employees. Instead, your employees (and you) will purchase their insurance individually via a State-run insurance exchange. The State will determine the rates, the plan designs, who can be covered and how much they will pay (it will be determined by personal income). You will have three plans (gold, silver & bronze) to choose from. It’s important to note that none of the essential ingredients (rates, coverage, etc) have yet been determined.
- Initial estimates show that in comparison to current rates (ie via BCBS-VT or MVP), the rates through the exchange will increase by a minimum of 18%, and probably far more than that. You may be able to qualify for federal tax credits depending on your income level and whether we actually receive those federal funds.
I encourage you to read about this legislation and get informed. I was at the town hall meeting in Wells on Saturday and it is no exaggeration to say that its effect will be far-reaching to all of us. Please call me to discuss any of this.
Weekly Legislative Report
For the Week Ending February 17, 2012
The House Health Care Committee voted 8-2-1 late Thursday afternoon in favor of an amended version of H.559 after weeks of testimony and deliberation on the session’s most significant health care reform initiative. The amended bill contains legislative directives governing state-specific construction of the health insurance exchange required by federal law, including a requirement that all benefit plans for individuals and small groups employing less than 50 employees be purchased through the exchange, that the exchange benefit options include lower-cost bronze plans in addition to the more generous silver, gold and platinum, a merger of the individual and small group markets (including the safety-net pool) into one pool, and a decision that the state won’t pursue an off-exchange basic health plan option to cover Vermonters with incomes between 133 and 200 percent of the federal poverty level.
The final committee vote came after consideration of several members proposed attaching other bills to H.559. Controversial proposals or issues requiring testimony were passed over, but the committee agreed to add provisions expanding the duties of the Joint Legislative Health Access Oversight Committee, addressing protocols for school sports injuries, an amendment to an existing prescribed products law, and an extension for a work group on claims edit standards.
Passed over were proposals deemed too controversial for H.559 but worthy of further consideration, including a prohibition on health plan mental health carve-outs, a VPIRG-sponsored bill to require enhanced insurer reporting on public websites, a bill requiring parity for primary mental health services, and a bill requiring payment for telemedicine. A proposal to amend last year’s midwives mandate was also delayed.
Prior to the final afternoon mark-up, brokers were invited to react to a proposal by committee chairman Rep. Michael Fisher to require broker fees be a direct transaction between the employer and the broker rather than including those costs in health insurer premium bills. The committee determined the issue was too involved to include as part of H.559, but they agreed that it should be considered later.
H.559 was referred Friday to the House Appropriations Committee for its consideration of the fiscal impact on the state budget of a provision in the bill to limit prescription drug out-of-pocket costs in health benefit plans. The full House is scheduled to consider H.559 on Thursday and Friday of this week.
Doubts resound at health care forum
By Brent Curtis
STAFF WRITER – Published: February 19, 2012
WELLS — There was universal opposition from residents who spoke Saturday at a forum to consider the pros and cons of a single-payer health care system in Vermont.
Close to 100 people packed the cafeteria at Wells Village School on Saturday morning, where a panel of speakers including two doctors, Rutland City’s treasurer and the commissioner of the Vermont Department of Banking, Insurance, Securities and Health Care Administration weighed in on the state’s ongoing efforts to create a universal health care system — including proposed legislation to set up a new health insurance marketplace, known under the federal law that authorizes it as an “exchange.”
While BISCHA Commissioner Stephen Kimbell, whose agency is tasked with helping to create the exchange and implementing a single-payer system once it’s designed, talked about the potential benefits of the health care reform initiatives, the other speakers and the roughly dozen members of the public who spoke all opposed the plan.
Kimbell spoke first by laying out the potential financial benefits of the state’s plan, starting with the creation of the exchange, which he said could bring upward of $400 million in federal funds that would be used to provide refundable tax credits to consumers in the exchange.
The exchange, which must be created no later than Jan. 1, 2014, in accordance with federal law, would encompass individuals and businesses with 50 or fewer employees, according to legislation recently introduced in Montpelier.
By 2017, Kimbell said, the state hopes to receive Medicaid waivers that will allow it to create and govern its own health care system with the goal of slowing down escalating health care expenses.
“We don’t think we can lower that $5 billion cost, we just want to slow the rate of growth,” he said. “Just increasing at a more modest rate would be good.”
But the other speakers said that not only did they doubt that the single-payer plan would lower health care costs, but they said it could damage the quality of health care provided in the state while ruining the economy as well.
From the projections Rutland Treasurer Wendy Wilton assembled using expense and revenue estimates from a number of sources, the state would find itself deep in debt if it pursued a single-payer plan.
“What I found scared me so badly about the future of the fiscal state of Vermont that I decided I had to tell people,” Wilton, a former state legislator, said.
According to her estimates, Vermont would find itself $2 billion in the hole five years into a single-payer plan.
That dire prediction is based largely on a pair of assumptions — that the $400 million in federal dollars coming to Vermont to support the system would dry up and that the state’s economic growth wouldn’t be as robust as predicted.
But she said given the economic realities both in the state and nationwide, she believed both scenarios could come to pass.
“The revenue sources are a house of cards,” she said. “What happens if we’re not out of the global recession when we implement the system? … We need to think of ourselves as investors. Do you feel good about this process? I know I don’t.”
And even if the economy improves and the federal money continues, Wilton said her calculations show the state only “breaking even” with what it’s spending on health care now.
The doctors who spoke also offered poor prognoses.
Jerry Stein, a retired doctor of obstetrics and gynecology living in Wells, said a large portion of Vermonters and small businesses would lose out under the single-payer system and the exchange.
While a single-payer system could be years away, Stein said the detriments he foresees from it could have an effect far sooner if the legislation for creating the exchange is approved
While the exchange would be a benefit for some individuals due to an income sensitivity system built into it, Stein predicted that small businesses, particularly those that are now part of association health care plans, and the self-insured would suffer.
Stein also doubted a statement made earlier in the meeting by Kimbell, who said that Vermont’s single-payer coverage would be accepted at hospitals and health care providers in other states.
“For Mr. Kimbell to assume Vermont will be entering into contracts with every provider around the country is an interesting notion,” he said. “I don’t know how they’re going to do that.”
Dan McCauliffe, a Rutland dermatologist, listed 10 reasons why he believes access to providers and services would be more difficult under a universal plan.
McCauliffe’s reasons for delays included more people seeking health care services, a departure of doctors who he believes will leave the state, difficulties recruiting new doctors, the possible immigration to Vermont of the medically needy in neighboring states, and global budgets that he predicted will lead to HMO-style rationing of services.
“Cost overruns are going to be borne by hospitals and other health care providers under a global budget,” he said. “The system is going to force me to ration care. That’s not what I went into medicine for.”