2006 Legislative Updates:

  March 6, 2006

The House debated H.861 - Health Care Affordability for Vermonters - for two days, March 2nd and 3rd. Rep. Harry Chen, a member of the Health Care Committee and a practicing emergency room physician, was the reporter of the bill. He and other members of the committee were questioned intensely about different provisions of the H.861. During the debate, there were also several procedural fights. Here are some snippets of the conversation on the House floor during the first day of debate.

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Rep. Anne Donahue (R - Northfield): We are going to use the tobacco tax to fund Catamount Health. Yet, close to 50% of smoking in Vermont is done by low income people, many with mental health issues -- they are addicted and will be forced to decide whether they buy cigarettes or buy food. The tobacco tax should only be used for tobacco education.

Rep. Ann Pugh (D - South Burlington): My committee, Human Services, passed out the tobacco tax. Advocacy groups testified they supported using the tobacco tax for health care.

Rep. Donahue: Mental health advocates tell me they are opposed to H.861.

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Rep. Tom Koch (R - Barre Town): We will be looking for additional revenues to finance H.861. The Tobacco Settlement Tax expires in 10 years. This bill is not adequately funded and it is bound to collapse. Maybe there is a fix -- I thought I had one this morning. This bill is going to be a problem for future legislatures.

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Rep. Pat O'Donnell (R - Vernon): Do we want people to quit smoking or not? I think not or there will be no revenue for Catamount Health. Tennessee expanded their Medicaid program and when they couldn't fund it they dropped 200,000 people -- sounds like where Vermont is headed. We have a $200m deficit in Medicaid -- in the future we will be faced with major decisions. We will hurt the most vulnerable people. And where are we going to find additional revenues -- increasing the cigarette tax again? I support health care reform -- question is how we get there. This funding is totally, totally irresponsible -- we need to think about the people we represent.

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Rep. Dick Marron (R - Stowe): We are going down a slippery slope -- Catamount Health plans to cover 22,000 people by 2010 but currently there are 66,000 uninsured. How do we get to 98% coverage that the bill calls for?

Rep. Shap Smith (D - Morristown): The representative from Stowe is speaking to the underlying bill, not the amendment.

Speaker Symington (D - Jericho): Your point is well taken. The representative from Stowe should be careful to speak to the amendment.

Rep. Marron: H.861 is a patch on a system that is not yet broken.

Rep. Pugh: All the reports show that every state that raised their cigarette tax enjoyed increased revenue. More was gained than lost. Makes financial sense, makes good health care sense.

Rep. Koch: I support increasing the cigarette tax but it doesn't generate enough revenue. The Health Care Committee's estimate is there will be a $3.2m surplus by 2010. But using the best assumptions, in 2011 there will be a $8.6m deficit -- so we have a net deficit of $5.2m. This is a house of cards bound to collapse.

Rep. Steve Maier (D - Middlebury): We have a crisis of the entire health care system, not just Medicaid -- we need to make investments to address the entire health care system. We are forced to live with a lot of uncertainties in Medicaid but increased revenues will produce savings of $550m in 10 years. H.861 will decrease the deficit -- it is the only bill in this building to do that.

Rep. Mary Morrissey (R - Bennington): I'm trying to understand this bill but it is very complex -- and I'm hearing a lot of personal assumptions without a lot of information. "I assume. I understand. I think." I would like to go back to the voters with solid information. Voters want to know the costs and what they get for those costs. They want to know there is sustainable funding for health care. There is not. I will not support this bill.

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Rep. Koch: I met with Ken Thorpe once -- I respect him. Can you tell me how he arrived at his estimates?

Rep. Harry Chen (D - Mendon): Thorpe based many of his assumptions and methodologies on CBO (Congressional Budget Office) and Census data. JFO says "he is as good as it gets."

Rep. Koch: Can you share his methodology will us?

Rep. Chen: The take up rate -- the number of new enrollees -- is calculated using a very sophisticated model. Based on experience in other settings, Thorpe found that for every 10% decrease in premiums, another 5% of the population -- the uninsured -- will sign up.

Rep Koch: And the goal is 98% insured?

Rep. Chen: Catamount Health does not reach 98% -- we do not project out to 98%. It is a goal and at some point -- after some experience with the program -- we will look to see how to get to 98%.

Rep. Koch: The way I read the definitions and eligibility it is possible for an employee to get on Catamount Health by quitting her job, enroll in Catamount Health, and get hired back to her old job.

Rep. Chen: Agree, but there is a rule making process that will help prevent gaming the system.

Rep. Koch: Does H.861 have parameters for rule making by the administration?

Rep. Chen: Yes.

Rep Koch: So, if the premiums were to go up, instead of down, the enrollment would go down?

Rep. Chen: Correct.

Rep. Koch: When the administration and the Health Access Oversight Committee looked at the experience of increasing premiums in the Medicaid program, the results were inconclusive -- we did not lose as much enrollment.

Rep. Chen: We did not look at that.

Rep. Koch: So, I question how good the enrollment numbers are. If enrollment doesn't follow Thorpe's assumptions, where are we?

Rep. Chen: We spend less money on Catamount and more for the Medicaid deficit.

Rep. Koch: Makes more sense to me if we spend -- say 1% -- for an outreach program to attract more Vermonters to the existing Medicaid programs.

Rep Chen: Vermont has extensive outreach experience -- it doesn't work.

Rep. Koch:I'm afraid there will be a lot of gaming of the system by employers to drop their insurance coverage for their workers. An employer might temporarily layoff its entire workforce, the employees would enroll in Catamount Health and then the employer would rehire the employees.

Rep. Chen: There are a lot of scenarios to enrollment -- these rules are similar to VHAP regulations. The experience is in the first year one-third of the uninsured enrolls, the second year another third and the third year most all of the rest.

Rep. Koch: I have a real concern some smart health care consultant will go around to employers and show them how to drop their insurance and get their employees onto Catamount Health. If that happens, I fear Dr. Thorpe's estimates may be understated.

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Rep. Daryl Pillsbury (I - Brattleboro): I have been here six years. I've seen a Republican house and a Democratic house. It's the same arguments, the sides just change. I'll bet each member knows a 100 uninsured -- if not, you are not hanging around the same people I am. H.861 is a compromise and I support it. I don't understand the administration -- why do they trash it?

Rep Flory: Point of order. I don't think the rules allow for a member to go after another branch of government.

Speaker Symington: I caution the member not to speak derogatorily about another branch of government.

Rep. Pillsbury: I apologize to the Speaker and to the Governor. I'm an independent for a reason -- I can't stand the two parties just arguing back and forth for nothing -- just to posture. Do they really care for the uninsured?

Rep. Flory: Point of order. That is attacking the motivation of this body which is prohibited by rule.

Speaker Symington: I caution the member not to question the motives of members.

Rep. Pillsbury: I don't mean to upset anyone but this is an emotional issue for me. I know too many people without insurance.

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Rep. Anne Donahue: Last session's studies were going to analyze the impact of various financing mechanisms to fund health care. The studies were going to determine the economic impact of different health care scenarios. They were going to answer a lot of the questions we have today. The studies would have confirmed many of the assumptions we are talking about. Would Vermont become more or less competitive with health care reform legislation?

Rep. Connie Houston (R - Vergennes): We would not be here today if the studies had been done. They were due January 2006. Are they done?

Rep. John Tracy (D - Burlington): We have not completed the studies. This is not the first time this has happened.

Rep Houston: We are trying to make important decisions. We need solid information. How much was Dr. Thorpe paid?

Rep. Tracy: So far we have spent $310,000. If we had hired an executive director, that would have cost us $100,000 per year for four years. We spent $45,000 with Thorpe for the original contract and another $65,000 to extend his contract. We are also paying the IT consultant $55,000. Some of the money was for staff time, some for the public engagement process.

Rep. Houston: So with that money spent can you show us the data?

Rep. Tracy: We used the consultant to help us put together H.861.

Rep. Houston: So we just have the numbers on this one sheet of blue paper you handed out?

Rep. Tracy: We are much further along then we would have been without Thorpe. We will see good data from the IT consultant. We will get a good analysis of the Blueprint. We plan to continue the commission for four years. We are using Thorpe to help us with the next piece of legislation to lay out where do we go from here.

Rep. Houston: It is imperative that by tomorrow we have the data we need to make decisions on this legislation. We spent $110,000 -- we should have something.

Rep. Tracy: We have more than $110,000 worth of data.

Following 8 hours of debate, a preliminary vote was taken on H.861. The bill passed second reading by 81-56.

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.