2006 Legislative Updates:

  February 6-10, 2006

Deadline for House Bills: Speaker Symington requested that all House committees finish their work on bills needing appropriations by February 17. Her goal is to allow time for the Appropriations Committee to complete the FY2007 budget in a timely manner.

Health Care Reform Schedule for week of February 14, 2006

Monday - Ken Thorpe reports to the House Health Care Committee. Version 2.3 of the Health Care Committee draft bill will be released.

Tuesday - Interested parties will testify on Health Care Committee version 2.3.

Wednesday - Health Care Committee will vote on the committee bill.

Thursday - House Ways and Means Committee will review the House bill.

Friday - Ways and Means will vote on the House bill. Senate Health and Welfare will vote on their Common Sense Initiatives.

Week of February 21: House Appropriations Committee will review the House bill; the Senate plans to vote on the Common Sense Initiatives bill; the schedule for the House vote on the Health Care Committee bill is unknown.

Senate Health and Welfare Committee continued to work on the Common Sense initiatives.

House Health Care Committee marked up various versions of their draft bill. The committee named their benefits plan "Catamount Health". Catamount Health is to be "actuarially equivalent" to SelectCare POS plan -- the most popular plan offered to Vermont state employees. SelectCare has no deductible for using in-network providers, a $15 co-pay for primary care, and a maximum $250 co-pay for hospitalization. Out-of-network coverage has a 30% co-insurance with a maximum out of pocket of $2,000 for an individual and $6,000 for a family. Premiums will be set on an income sensitive sliding fee scale.

See legislative update #7 for a summary of version 2.2 of the committee's draft bill. During the week, the committee took testimony from various sources. Steve Kappel, Joint Fiscal Office, testified on using reinsurance, capping enrollment and underwriting as ways to control financial liability.

Dr. Paul Jarris, Commissioner of Health, and Jim Hester, Vice President of MVP, testified on the complexity of implementing the IT infrastructure needed to support the Chronic Care Initiative. Hester suggested extending the timeline at least two years.

Josh Slen, Director of the Office of Vermont Health Access (OVHA), suggested modification of the cost-shift language and raising provider payments. He explained OVHA's desire to shift to a DRG based Medicaid payment system.

Bea Grause, President of Vermont Association of Hospital and Health Systems, suggested OVHA and the Office of Rural Health issue a request for proposal for community Medicaid payment pilot projects in two separate hospital service areas. The pilots would support the integration for the delivery of health care services at the community level. The projects would include a comprehensive valuation process that measured improvement in access, clinical outcomes, quality and cost containment. The pilots would define parameters for sharing the financial risk and potential savings; have a stop-loss provision in the event of catastrophic or disaster; and propose a budget that included cost containment, budget neutrality provisions and incentive grants.

Grause also testified that the VAHHS board unanimously agreed to a transparent process that would show that hospitals could reduce their charges if the state significantly increased Medicaid reimbursements. Grause recommended a $20 million increase in Medicaid payments.

The following is selected committee discussions from the week's markup sessions by the House Health Care Committee:

Rep. Gini Milkey (D - Brattleboro): I vote for naming our plan "Catamount Health". Vermont has a long history with Catamounts.

Rep. Chris Louras (R - Rutland City): But they are near extinction.

Rep. Lucie Leriche (D - Hardwick): But they are coming back and so is health care reform.

February 7th - during a discussion of health care policies, reinsurance and plan solvency:

Rep. Harry Chen (D - Mendon): Most people I see in the Emergency Room don't have the sophistication to do a risk analysis of their own situation when it comes to health care coverage. They just say "I can't afford it."

Rep. Malcolm Severance (R - Colchester): I lived a sheltered life in education (Severance was a professor of economics at UVM). My exposure was primarily with mid and upper income people. So I don't have a perspective on the challenges of lower income folks.

Rep. Topper McFaun (R - Barre City): Are we containing premium costs so people can pay for coverage -- if this does it, I'm fine. But, I don't see it yet.

Rep. John Tracy (D - Burlington): I wish we could lower them more and get instant gratification. But it is a start. Vermonters need to be educated about the hidden taxes they are paying now. Vermonters need time to digest all this.

Rep. McFaun: Last night, I was in the room negotiating contracts -- health care was the major issue. I'm not sure anything I'm doing here will help that.

Rep. Milkey: How does our chronic care plan save money?

Steve Kappel (Joint Fiscal Office): Mostly from less hospitalization for those with chronic conditions.

Rep. Milkey: In the first year?

Kappel: Yes, but this does raise a number of questions.

Rep. Severance: ... hard to believe.

Rep. McFaun: Is it fair to base our estimates on 50% enrollment?

Kappel: Is that an ethical or economic question?

Rep. McFaun: Both.

Kappel: I'm not going to hold myself up as an ethics expert. Pragmatically, it is reasonable to assume 50% will sign up .... JFO is trying to get the big financial picture onto a spreadsheet. It is giving us headaches -- so be forewarned.... Actuaries would factor in risk, fine tune the numbers. Dr. Thorpe (consultant to the Health Care Reform Commission) is generating numbers as support to the policy discussion.

Feb. 8th -- morning walk through of version 1.7 of the draft bill:

Rep. Tracy: Are there any preexisting condition exclusions?

Robin Lunge (Legislative Counsel): None -- this will cover preexisting conditions.

Rep. Leriche: I would like to keep it that way.

Rep. Milkey: All chronic care and acute care covered?

Rep. Chen: Yes.

Rep. Steve Maier (D - Middlebury): I want to see a sliding scale premium based on income.

Rep. Leriche: Under-insured -- can we do anything for them? Can we offer them an opportunity to sign up for our plan at the full rate and not effect the revenue neutral Global Commitment cap?

Rep. Chen: In the first year study, we should include the under-insured, mandatory vs. voluntary participation and employer buy-in.

Rep. Sarah Copeland-Hanzas (D - Bradford): If we include other populations, how does that effect the numbers?

Rep. Tracy: If we want to work on more, we need to check enrollment and see if we can afford more -- we need to avoid unintended consequences. If this falls, no one will try anything (in health care reform). We need to identify reasonable check points.

Rep. Chen: There might be a lack of churn -- coming into the program but not leaving. Do we need continuous oversight? What happens if on day two that 50,000 uninsured sign up?

Rep. Maier: We can plug the oversight function into the work of the Health Oversight Access Committee.

Rep. Milkey: Maybe we need to cap monthly enrollment.

Rep. McFaun: Won't it be better -- more appropriate -- to design a plan for all the uninsured?

February 8th - afternoon walk through of version 2.1

Rep Bill Keogh (D - Burlington): The request for proposal for chronic care management is a real hang up for me. Phasing will be critical. Let's make sure the RFP can be bid.

Rep. Maier: Speaking for Topper -- how would we phase it in?

Josh Slen (Director of Office of Vermont Health Access): We are trying not to surprise you. OVHA won't outsource its thinking. We are attempting to build staff -- we will be ready by December 2006. We will have 12-18 new staff. In the RFP, we need to describe the chronic care population in a thoughtful way. We need to model vendor expectations. A year ago we had one data analyst to do Medicare. So I need to staff up quickly. We will bounce our RFP plan off your expectations.

Rep. Severance: Will the RFP cover multiple years?

Director Slen: In theory it will be a five year contract -- we need continuity but we need an option for the state to get out.

Unknown: Phase in by disease or geography?

Director Slen: Probably manage all chronic diseases in a local geography. We must work with the local care coordinators. We need community pilots.

Rep. Keogh: Do disease management firms exist?

Director Slen: Yes.

February 10th - review of version 2.2:

Rep. Tracy: The administration said they are concerned about the risk in our plan.

Rep. Leriche: Then let's mandate participation.

Rep. Maier: Assume our concerns are theirs.

Rep. McFaun: They better be.

Joe Zimmerman (Trust Administrator for the Vermont School Boards Insurance Trust): You buy reinsurance not to save money but to manage the risk.

Rep. Tracy: Our interests are all the same.

Rep. Maier: There are two issues to discuss: percent cap for those who enroll late and the time limit for the cap.

Rep. McFaun: Mandatory participation solves this.

Rep. Severance: We have not yet had that discussion. Our assumption is based on demand elasticity.

Rep. Maier: I leave the answer to Bill (Rep. Keogh).

Rep. Keogh: Leave the penalty to the discretion of the secretary (of administration).

Rep. Louras: If we go that way, I'm going to rewind.

Rep. Copeland-Hanzas: I'll meet you out in the hallway and you can tell whether or not you will advocate for this bill if we put mandates in.

Rep. Louras: I'm concerned we are creating an animal where lower income enrollees are subsidizing the premiums for higher income folks.

Rep. Leriche: Good argument for tax payer financed system.

Rep. Maier: There are competing issues -- we can't solve them all.

Rep. Joe Baker (R - West Rutland): Isn't that solved on my altitude density chart.

Vermont Health Care for All would like to thank VPIRG for their generous support of the 2006 Legislative Updates. They are also available on the VPIRG website http://www.vpirg.org. They will be produced throughout the 2006 Legislative session by Paul Forlenza. Forlenza can be contacted at paul@forlenza.us or 802-453-3592.