2006 Legislative Updates:

  January 23-27, 2006

Health Care Reform Commission: The controversy continues over Dr. Kenneth Thorpe's studies. The November 1, 2005 commission work plan states:

"Examine 3-5 tax proposals based on various specific proposals: e.g. Employer based health care, single payer, individual mandate."

The commission scheduled the report to be delivered January 15, 2006. Dr. Thorpe, a health care policy consultant to the commission, did not include a "single payer" analysis in his presentation this month. Statehouse lobbyists continue to ask "Why?"

Rep. John Tracy and Sen. Jim Leddy, co-chairs of the commission, recently sent a letter to a constituent saying, "Public financing of health care is one of the proposals included in the study language and is an area which will be included in the continuing work of the commission. Many legislators as well as advocates are committed to exploring this concept and the Commission will do so. However, we expect that this work will be during the off season period."

Governor's Health Care Reform Plan: John Crowley, Commissioner of BISHCA, and Herb Olson, BISHCA General Counsel, gave testimony on the governor's plan to the House Health Care Committee and the Senate Finance Committee.

Commissioner Crowley described the goals of the plan: (1) universal access to health insurance for all Vermonters, within a comprehensive coverage system for low and moderate income uninsured Vermonters; (2) improve quality and affordability through health care system reform; and (3) a healthier population through the promotion of healthy behavior and disease prevention.

The House Health Care Committee's questions focused primarily on the governor's "coverage strategies by target population." Herb Olson said that premium assistance would be available to 3 of the 5 target populations: Medicaid eligible at 150% of Federal Poverty Level (FPL), employees at 150-300% FPL that are offered insurance by their employer, and employees at 150-300% FPL not offered insurance. BISHCA estimates this would provide insurance for 46,000 Vermonters.

The remaining two populations -- employees above 300% FPL that are offered insurance by their employer and those employees who are not-- would be eligible for the "basic insurance policy" but would not receive premium assistance. BISHCA estimates these two populations include another 14,000 Vermonters. BISHCA said the basic insurance policy would be similar to commercial packages with $2,500 deductibles.

All five populations are eligible to call a "1-800 number" for assistance with coverage.

Rep. Topper McFaun (R - Barre Town) asked if "employers were on board with the governor's plan." Commissioner Crowley responded, "Duane Marsh (President of the Vermont Chamber of Commerce) told me this was a preferable alternative to a tax." Based on that comment, Crowley said, "I feel others in the business community will feel the same."

Rep. McFaun: "Between 2001 and 2005, Vermont employers discontinued offering insurance to 5,000 Vermonters per year. If employers are not on board with this plan and continue to drop insurance, then we will lose covered individuals faster than we will gain."

General Counsel Herb Olson: "Rhode Island was been offering premium assistance. A survey of employers reported the business community was favorable."

Rep. Steve Maier (D - Middlebury): "The governor's plan transfers millions of dollars in premiums to employers -- what is the impact on their businesses?"

Commissioner Crowley: "Not sure dollar for dollar -- don't see direct correlation."

Rep. Maier: "This is critically important to understand."

Rep. Gini Milkey (D - Brattleboro): "The governor talks about affordable health care. What does affordable mean?"

Commissioner Crowley: "I have never heard the governor define affordable health care."

Rep. Milkey: "You say this is the first step and the administration wants to do more. What is the next step?"

Commissioner Crowley: "If we had more funding, we could offer 100% premium assistance to the 150-300% FPL population. But under the current conditions funds are not available."

General Counsel Olson: "....... or we could lower deductibles."

Rep. Milkey: "What is the administration's larger vision?"

Commissioner Crowley: "To fill gaps that exist."

Rep. Maier: "The governor's health care bill -- H.713 -- says, 'The commissioner may permit one or more health insurers to enter into a joint agreement to consolidate the offering of basic health insurance to uninsured Vermonters.' My question is: how does a joint operating agreement work?"

General Counsel Olson: "The language permits insurance companies to enter into joint operating agreements, but it is not required."

Rep. Maier: "Have they helped before?"

General Counsel Olson: "I'm not familiar with any in Vermont."

Rep. Lucie Leriche (D - Hardwick): "Does the governor's plan increase Medicaid reimbursement to Medicare levels?"

Commissioner Crowley: "It increases Medicaid reimbursement but does not make it equal to Medicare."

Rep. Leriche: "How does this lower premiums?"

Commissioner Crowley: "We expect the size of the cost shift to decrease so premiums should go down. We should get Mike Davis (Director of Cost Containment, Division of Health Care Administration), the hospital association and the insurance companies to jointly testify to see if they agree on premium reductions."

House Ways and Means Committee: Vermont Business for Social Responsibility (VBSR) and Vermont Health Care for All (VtHCA) testified before the Ways and Means Committee. VtHCA stressed that successfully reforming health care required cost containment and broad based public financing. "If comprehensive reform can not be accomplished this session, then we recommend passage of Rep. McFaun's bill (H. 564) that provides Vermonters hospital coverage funded by a broad based tax."

Tim Palmer, VBSR, offered the Ways and Means Committee three suggestions for reducing health care premiums: (1) consolidate the existing insurance pools into one large pool for all Vermonters; (2) reinsure the entire pool, and (3) allow young adults (up to age 25 or 30) to continue to be covered by their parents health care insurance. Palmer said, "Covering young adults would pull a healthy population into the Vermont pool and brings new money into the system -- both work to reduce premiums."

Rep. Mary Peterson (D - Williston): "After our daughter graduated from graduate school she was dropped by MVP and could only get crappy coverage up to $50,000."

Rep. Obuchowski (D - Rockingham and chair of the committee): "I commend VBSR and VtHCA for offering ideas on financing health care reform. Why are other groups so hesitant to discuss their own ideas for funding?"

Cabinet Moves: Governor Douglas announced on Friday that Charlie Smith, now the Administration Secretary, will leave state government to replace Jan Eastman of the Snelling Center for Government. Last year, Smith was Secretary of Human Services.

Mike Smith now moves back to be Administration Secretary. This was the job he held before he was appointed Secretary of Human Services last year.

Cindy LaWare becomes the head of AHS, the largest agency in state government. She is now Commissioner of Personnel.

One Statehouse lobbyist asked, "Who will be the administration's point person on health care policy?"

Next week: The House Health Care Committee is expected to continue working on a committee bill focused on a chronic care initiative and providing coverage for the uninsured. Meanwhile the Senate Health and Welfare Committee will continue work on the "Common Sense Initiatives" - see Legislative Update #2 for details.

Other Health Care Reform Proposals: H. 564 (introduced by Rep. McFaun) - The bill would provide access to and coverage for health services provided in hospitals. It offers opportunities for premium relief to all Vermonters. The bill would establish a global hospital budget for the state and an individual hospital budget for each hospital in the state. It would establish a Vermont Hospital Security Trust Fund from which a negotiated payment would be made to each hospital for health services provided.

S.278 (introduced by Senator Snelling, R - Chittenden) includes sections on access; insurance; reinsurance pool; Medicaid; reimbursement rate; medical malpractice; administration.

H.692 (introduced by Rep. Klein, D - East Montpelier) includes the same sections. Both bills reflect collaboration with MVP and the Vermont Association of Hospitals and Health Systems (VAHHS). The bill contains elements of the Williston Group "Concepts Paper." See Legislative Update #2 for details.

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.