2006 Legislative Updates:

 April 21, 2006

Where are we with health care reform in the legislature?

The Senate and House have passed their own versions of H.861 -- the Health Care Affordability Act for Vermonters. The next step is to resolve the differences in the conference committee. The House members are John Tracy, (D) chair of the Health Care Committee; Harry Chen (D), an emergency room physician; and Topper McFaun (R), who has consistently voiced positions independent from the governor. The Senate members are: Jim Leddy (D), chair of the Health and Welfare Committee; Ann Cummings (D), chair of the Finance Committee; and Kevin Mullin (R) who has supported many provisions in the bill but is concerned about the funding mechanism. The two Republicans on the conference committee, McFaun and Mullin, both voted for the bill in their respective committees.

Governor's position: The Governor and Mike Smith, Secretary of Administration, have repeatedly voice their concerns about H.861. Mike Smith and the Senate have exchanged several letters -- here is part of Smith's latest letter to Senator pro tem Peter Welch and Speaker Gaye Symington:

"The Governor has compromised in several key areas to keep health care reform moving forward. This includes agreeing to an increase in the cigarette tax to help cover the cost of health care for uninsured Vermonters and agreeing to revise our ESI (employer sponsored insurance) estimates. In return, we asked that the legislature take a much more critical and honest look at what effect H.861 would have on the hundreds of thousands of Vermonters who already have insurance, on our strong network of health care providers, and on the state's finances as a whole. My sense is that H.861 has yet to receive that review, and my hope is that you will use your deliberations (in the conference committee) to do just that."

House Health Care Committee: This week the committee met several time to review and discuss the Senate version of H.861. Unlike the House version, the Senate mandates that Vermont Health Access Plan (VHAP) eligible individuals move to their employers insurance. For each employee not "covered", the employer would be required to pay an assessment (also known as an employer premium contribution).

Steve Kappel (Joint Fiscal Office) presented five different scenarios for when the assessment would be paid:

1. Employer doesn't offer insurance: employer pays assessment.

2. Employer offers insurance but the employee is not eligible (works part time): employer pays assessment.

3. Employer offers insurance, employee declines and is uninsured (can't afford premiums): employer pays the assessment.

4. Employer offers insurance, employee declines but is insured (by spouse's policy): no assessment.

5. Employer offers insurance, employee is eligible and enrolls: no assessment.

Committee discussion for April 20th:

Chair John Tracy (D - Chittenden): I think the committee has several concerns about the Senate version. Here is what I would like to discuss this morning: employer sponsored insurance (ESI), the RFP (Request for Proposal) to select a disease management company for managing the chronic care initiative and the assessment on employers (who do not offer insurance to their employees).

Rep. Harry Chen (D - Mendon): I have concerns about ESI and how it would work with VHAP. The administration of this will be complex, especially the wrapping of insurance around ESI. In the Senate bill, it is mandatory that VHAP eligible individuals move to their employer's health care program. Is there someway to make that voluntary?

Chair Tracy: The Senate has OVHA (Office of Vermont Health Access) doing a study of ESI before it is implemented -- they have a $250,000 budget for the study. Part of the issue is identifying the savings that come to the state when individuals are moved off VHAP and onto ESI. The administration and JFO (Joint Fiscal Office) have been at odds about the estimate of savings.

Rep. Steve Maier (D - Middlebury): What are the possible scenarios? I was talking to Mark Larson (D - Burlington) on the appropriations committee and he has been looking at this. If the employee is forced off VHAP and moved to ESI and if the employer pays only a small portion of the premium, the administration says the state would hold the employee harmless -- in other words pick up the difference. So, this would be an additional cost to the state.

Rep. Topper McFaun (R - Barre City): And ESI was going to save the state money.

Rep. Sarah Copeland-Hanzas (D - Bradford): So maybe there should be a minimum employer match.

Rep. McFaun: When this was presented by the administration, they said research had been done for your bill, right, Joe (Rep. Joe Baker introduced H.713 for the administration)?

Rep. Joe Baker (R - West Rutland): Supposedly.

Rep McFaun: So let's find out where they got their information........

Chair Tracy: ... we've been down that road and time is running out.

Rep. Maier: This was an ongoing conversation in the Senate. They had three weeks of intense negotiations with the administration -- both sides still disagree about the numbers. JFO thinks the numbers are too optimistic. To move the conversation along, they compromised half way.

Chair Tracy: What else can we do to get comfortable?

Rep. Chen: Theoretically there is a $250,000 investment to find out. We could put a minimum requirement for the employer's share.

Rep. Bill Keogh (D - Burlington): Should we get hung up with reporting FTE's (full time equivalents) to implement accurate assessments.

Chair Tracy: Bill, hold that for later but we do need more specific information.

Rep. Chen: I've been reading the ESI section and getting more comfortable.

Chair Tracy: It doesn't go into effect until 2007, so there might be more time to look at this. Let's get into the assessment - Bill, your thoughts?

Rep. Keogh: In order to comply with FTE's (basis for the employer paying an assessment on employee's without health care coverage), we need a system to report and capture hours worked. I don't know if that is easy to do.

Chair Tracy: Was that discussed in the Senate?

Unknown: No.

Rep. McFaun: It takes time to program a computer to capture the FTE information.

Rep. Maier: DOL (department of labor) needs to have it together by March 2007.

Rep Keogh: And the forms need to be out by the end of April.

Chair Tracy: Bill, can you get some answers from your contact at DOL?

Loring Starr (staff to committee): I'm scheduling Thomas Douse, Deputy Commissioner at the Department of Employment and Training, for this afternoon.

Chair Tracy: How do we feel about the RFP to pick a disease management vendor?

Rep. Keogh: What if we get no bids? Or the bids are too high? What are the criteria for judging?

Chair Tracy: The Commission (on Health Care Reform) and JFC (Joint Fiscal Committee) will provide recommendations to the general assembly. So we have some checks on the RFP.

Rep. McFaun: An actuary could tell you if it is too high.

Chair Tracy: I have concerns too about the bids. We need plan B -- we need to work with the administration on that.

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Chair Tracy: I've been looking at section 24 of the Senate bill which says that 98% of Vermonters should have insurance by 2010. But earlier in the bill it says that Catamount Health could be capped -- this is a possible conflict.

Rep Chen: I don't see it as incompatible -- there will still be insurance products out there.

Rep. Gini Milkey (D - Brattleboro): But if people have to pay three times more than Catamount premiums, that isn't fair.

Rep. Copeland-Hanzas: We could reevaluate the funding -- nobody thinks this is the end of health care reform -- by then we can see how the mandate in Massachusetts worked....

Rep. McFaun: .... and in Maine. It's voluntary there....

Rep. Copeland-Hanzas... if we reach 2010 and have 50,000 uninsured, then we have a problem.

Rep. Chen: We could look at eliminating the 12-month waiting period -- open up Catamount Health and get more funding. Could be a mix of waiting period and figuring out how to pay for everyone....

Rep. Copeland-Hanzas: ... come back next year.......

Rep. Milkey: ...... I plan too!

Rep. McFaun: When we get to 95% insured, maybe that is as good as 98%.

Rep. Keogh: That's an arbitrary figure anyway.

Rep. McFaun: If other insurance figures, like auto insurance, are right, we can't get to 98% anyway.

Chair Tracy: So are we getting comfortable with the cap?

Rep Chen: Once insurance is mandatory, lots of things can happen.

Rep. Keogh: We can deal with this next year.

Chair Tracy: OK, for now we leave it. We'll have Legislative Council work on language for our ESI concerns and getting a plan B if there are no bids.

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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.