2006 Legislative Updates:

  January 16, 2006

Commission on Health Care Reform: Last Thursday January 12th, members of the Commission on Health Care Reform expressed serious disappointment about the presentation made by Dr. Kenneth Thorpe, a nationally recognized expert on health care policy. One member found Dr. Thorpe's financial analysis of health care reform options "thin and clearly fall far short of the mark". Many members said it did not meet their expectations.

Dr. Thorpe made his presentation to the Commission to fulfill the requirements of the House Appropriations Committee as detailed in the 2006 Budget Bill. The legislation called for two studies. The first was to study the "economic impact of implementing a system of universal access to health care for Vermonters versus the effects of sustaining the current system ......" The second report was to "examine the financing options that most effectively achieve the goal of universal access to health care and maintaining its affordability." Dr. Thorpe's presentation is on the commission's website as is the full text of the enabling legislation Section 277d in H.516.

In his presentation, Dr. Thorpe examined three alternatives; no reform, creating a Green Mountain Plan and mandates for individuals and employers. "Doing nothing," Thorpe said, "would be costly". By 2010, the uninsured would increase from 69,000 to nearly 80,000 Vermonters. Uncompensated care in Vermont hospitals would jump from $53 million to $75 million a year. The price of private insurance would increase from $1.1 billion to more than $1.5 billion.

Thorpe's second option would create "Green Mountain Health" for the uninsured that are not chronically ill. They would receive all primary and preventive services. Hospitalizations, unrelated to chronic episodes, would not be covered by Green Mountain Health. However, the uninsured could be covered through each hospital's written charity care policy- with patient contributions based on income and state support.

Thorpe said that the uninsured, who are chronically ill, would be integrated into a Medicaid chronic care program that would be managed by an outside vendor. Thorpe reported that some other states had experienced a 5-10% per member savings. The "Global Commitment" waiver might be used to obtain additional federal matching funds.

"Employer and individual mandates to buy health care insurance", Thorpe said, "have some negative economic impacts". Mandates would result in fewer employer sponsored health care plans. Thorpe emphasized that mandates do not address the issue of rising costs, quality and delivery.

The Burlington Free Press, in an opinion article in the January 16th edition, gave Thorpe's financing alternatives a positive review. The article said Dr. Thorpe"linked the Democrats' call for basic care for the uninsured with the governor's desire for better control over chronic diseases such as diabetes". The Free Press saw this as a reasonable compromise.

House Health Care Committee: At the end of the week, Chairman Tracy (D - Burlington) announced that the week of January 16, the committee would focus on identifying elements to include in the house bill. Steve Maier (D - Middlebury) said, "The shape of the bill needs to be solid by the end of the week". Recent remarks by Speaker Gaye Symington (D - Jericho) suggest the bill will be less than the comprehensive reform contained in H.524. One member said the bill will focus on a benefit plan and appropriate financing for the plan. Tracy's goal is to have a bill by the end of the month.

Legislative Council reviewed with the House Health Care Committee the draft of the Senate's "Common Sense Initiatives" (now referred to by staff as the "CSI Montpelier"). For details of the draft bill, see legislative update #2. The Senate Health and Welfare Committee is scheduled to complete the bill by the end of the month.

The administration also presented its case to the committee but did not unveil any budget figures or an actual bill. Secretary Charlie Smith promised more details after the Governor made his Budget Address on Tuesday, January 17.

The committee took testimony from James Hester, CEO of MVP, representing the Williston Group (see legislative update#2 for details), the Vermont Medical Society, Bi-State Primary Care Association, VBSR, Blue-Cross Blue Shield and other business groups. They were asked to either review their plans or provide comment on provider capacity.

Basic Health Benefit Plans: Several groups presented their designs for a basic benefit plan to House and Senate Committees.

Blue Cross Blue Shields testified about their economic analysis of low cost plans. For $1,800 a year, the insurance company concluded they could either cover primary care or hospitalization, but not both. The plans are designed to be affordable for low income families at 150% - 300% of poverty. The three plans BCBS would offer are a primary care plan, a catastrophic plan and a mid-level catastrophic plan. There are significant limitations to each of these plans. Either they limit coverage to a low dollar amount ($600) or they have a high deductible ($5,000 - $10,000). Members of the House Health Care Committee voiced their disappointment in the financial limitations of the insurance plans.

Bea Grause, CEO of VAHHS, clarified a design element in the plan the hospital association and MVP presented last week. She pointed out that the plan, designed by the Willis Group, was a doughnut plan. There would be a hole in coverage between $5,000 and $30,000. Grause stressed this was not a final plan, but rather a "template" for a future basic benefits package.

Provider Capacity: Both the Vermont Medical Society and Bi-State Primary Care Association testified that the current health system capacity is strained. VMS said that providers would find it difficult to take on the burden of additional patients. Providing coverage for the 60,000+ uninsured would require additional financial resources.

Hunt Blair at Bi-State suggested that, if the legislature was not willing to tackle H.524's broad comprehensive reform, an alternative first step could be a Green Mountain Health card. The GMH card would qualify the uninsured for access to health care on a sliding fee scale. The care would be provided by "safety net providers" financed by a state funded uncompensated care pool.

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.