2006 Legislative Updates:

  January 33 to February 2006

House Health Care Committee: This week the House Health Care Committee worked on drafts 4, 5, 6 and 7 of their bill. The current version creates a benefit plan for primary, preventive and chronic care management for uninsured Vermonters. “The benefits shall be actuarially equivalent to the HealthGuard PPO plan offered to state employees...”

The committee plans to finance everything through the Global Commitment and that continues to be controversial -- no one seems to know if there is or is not “real” money there. Also there is still discussion about whether or not to include hospitalization for the uninsured.

The committee’s plan would have the Secretary of Administration issue an RFP for chronic disease management services for Medicaid, VHAP, Dr. Dynasaur and “X Health” enrollees. The committee has yet to name their health plan, thus the “X”. Rep. Harry Chen (D - Mendon) suggested calling it the “Y-care plan”. The committee’s bill builds on the governor’s BluePrint -- a statewide chronic care initiative.

Dr. Thorpe, consultant to the Health Care Commission, has aggressively pushed for the use of an outside vendor to manage and implement the plan. Some legislators expressed a preference for a Vermont firm. Thorpe said, “There are national firms with considerable experience in this area that have a record of saving states money.”

Other items in the bill: increased Medicaid reimbursements at least 10% greater than Medicare payments; a Cost Shift Task Force “to ensure that reductions in hospital and provider charges are reflected in a slower rate of growth in health insurance premiums.”

Chairman John Tracy (D - Burlington) plans to have the Health Care Committee vote out the bill Thursday or Friday.

Administration’s Bill: The committee also took testimony from BISHCA on the Administration’s plan -- H.713. John Crowley, Commissioner of BISHCA, and Herb Olson, General Counsel, were intensely questioned about the administration’s benefits plan, the cost shift to employers and the cost of administering the plan.

Two weeks ago, the Administration testified that the cost to employers would be $14 million. Early this week they increased the cost to $35 million, plus undefined administrative costs. Late Friday, the Administration again came back with a new estimate -- $44 million. The House Health Care Committee estimated the cost at $50-60 million. Much of the confusion seems to revolve around the assumptions that go into the calculations.

Senate Health and Welfare Committee: Chairman Jim Leddy (D - Chittenden) continues to focus the committee’s work on the Common Sense Initiatives -- see prior updates for a description of CSI.

House Ways and Means Committee: Chairman Obuchowski’s (D - Rockingham) committee spent another day taking testimony on health care. Here are some selected parts of the conversation:

Rep. Tracy (D - Burlington): “The Health Care Committee is moving forward. Trying to get estimates from the administration has been a roller coaster. Their first estimate was $14m for their health care plan. JSI Consultants (hired by the Governor) now estimates $35m, while we calculate $50-$60m.”

Rep. David Allaire (R - Rutland City): “Are the administration and the Health Care Committee talking about the same program?”

Rep. Tracy: “Not sure. We have a chicken and egg problem -- do we define the benefits package first and then calculate the cost or do it the other way around? We have asked our consultant (Dr. Thorpe) to recalculate the premiums he presented to us earlier this week. They were based on one of the state employee plans. Unfortunately, he was using biweekly, rather than monthly dollar amounts. We want a decent product (benefit plan) in my committee’s bill. We don’t want to take public money and buy junk and we don’t want to crowd out the private sector. How do you get the uninsured to enroll -- voluntary, mandates or incentives? We are trying to evaluate the governor’s plan and build on the Blueprint (chronic care initiate).”

Rep. Phil Winters (R - Williamstown): “Is it possible to come out with a hybrid plan combining your plan with the governor’s? Are we building something we can gracefully back out of?”

Rep. Tracy: “If there are unintended consequences, we will need to adjust.”

Rep. Bob Rusten (D - Halifax): “The governor’s plan is a work in progress. Your committee's plan is a work in progress. What is the effort to combine?”

Rep. Tracy: “We are considering a hospital pilot, global budgets and test driving the initiative. The Vermont Medical Society, Vermont Association of Hospitals and Health Systems, and others have come in with different proposals. With so many players, it is complicated.”

Rep. Johannah Donovan Leddy (D - Burlington): “Last week the administration was here saying their plan would cost $14m. Now it looks like at least two times that. How does the administration explain the difference?”

Rep. Tracy: “As the Health Care Committee digs deeper and deeper, we are finding more areas to research. JSI is saying $35m. I don’t know how to explain the increasing numbers. At the pace we are progressing (in finding out the numbers) it will take until June or July. I don’t know how to answer you. The administration is working hard.”

Rep. Bud Otterman (R - Topsham): “Worst comes to worst, will we be left with uninsured?”

Rep. Tracy: “We will come out with a benefits package first focused on the uninsured. If the legislature increases Medicaid reimbursements and we lower the cost shift, how does that translate into people’s wallets? How do we make BISHCA, the insurance companies and the hospitals work together? The hospitals are taking care of patients and then figuring out how to pay. Senator Leddy calls this ‘patients on scholarships’.”

Rep. Winters: “All hospitals have their own policy on charity care. Do we have any input?”

Rep. Tracy: “Hospitals are doing the right thing. But hospitals are turning into bill collectors -- this is part of chasing the money that health care is full of.”

Rep. Donovan: “If business costs go up as they are likely to under the administration’s plan, businesses will either drop insurance they offer to their employees or offer only high deductible plans. How does the administration explain the impact on businesses?”

Rep. Tracy: “The administration will probably get into HSA’s - Health Savings Accounts -- with high deductibles just to cover employees’ anxiety over catastrophic medical bills. The Health Care Committee is talking about reinsurance. Rep. Malcolm Severance (R - Colchester) and I had a conversation that if managing chronic care is successful, people will live longer and maybe that adds end of life costs that are more expensive. Steve Kappel (Legislative Counsel) calls this the “prevention paradox”.

Rep. Winters: “Is hypertension a chronic disease? Have you, yourself, developed it in this process?”

Rep. Tracy: “Probably.”

Rep. Obuchowski (D - Rockingham): “When will you have a bill?”

Rep. Tracy: “Next week.”

Rep. Allaire: “I encourage you to work with the administration with open eyes. We don’t want to hear one side hasn’t cooperated with the other.”

Rep. Tracy: “We are trying to give the administration due diligence. We are trying to put a happy face on but time is running out -- this is the second month of the session.”

Rep. Shap Smith (D - Morristown): “Vermonters don’t care who solves this -- they just want it solved.”

Rep. Tracy: “I hear you and that is what we are trying to do.”

Rep. Smith: “The administration had all fall and they are still working on the details. I have openly said I am disappointed.”

Rep. Tracy: “We are getting there. We are taking heat from the single payer advocates and those on the other side -- but that is all right.”

During the House Health Care Committee’s Friday morning markup of their bill, five college students entered the committee room to listen to the discussion. At the end of the markup, Rep. Tracy initiated a conversation with them:

Rep. Tracy: “How many of you were in the hospital last year for some kind of medical treatment?” Two of five students raised their hands.

Rep. Topper McFaun (R - Barre City): “That is why we need my hospital bill.”

Rep. Tracy: “What do you think would happen if we mandated health care and said you couldn’t get your license without it?”

Student: “There would be a lot less cars on the road!”

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.