Details emerge on cost of health care plans under the Vermont Exchange
By Anne Galloway On August 22, 2012 www.vtdigger.org
The state has released its recommended “cost-sharing” structure for insurance plans offered through the federal health care exchange.
The plan will limit the maximum out-of-pocket costs paid for by an individual and families. The cap is $6,250 for an individual and $12,500 for a family of four. In addition, Vermonters insured in the exchange will be responsible for up to $1,250 in prescription drug costs. The maximum deductible allowed in the exchange is $2,000.
The exchange will go into effect in 2014, and the state plans to use it as a platform for the Shumlin administration’s ambitious single payer health care plan.
Robin Lunge, the director of health care reform under Gov. Peter Shumlin, explained to reporters that the administration is “required to do the exchange, but that’s not where the governor wants to end up.”
Health insurance premiums in the new federal exchange will fluctuate, depending on the quality of the plan and the level of subsidy available for individuals. Premium levels have not yet been developed for the nine different plans that will be offered through the exchange.
“We live in a federal system where the first step is building the exchange,” Lunge said. “The exchange requires a range of plan designs at actuarial levels. We’re trying to balance the diverse needs of consumers by having a range of choices from what some feel is inadequate to what some people think is too rich.”
Monthly premiums for an individual would represent no more than 9.5 percent of total income, according to a sample sliding scale spreadsheet from the Department of Vermont Health Access that is based on a “silver” level plan. Vermonters whose income is 400 percent of poverty or lower will qualify for a federal tax credit.
For an individual who makes $2,793 per month, the monthly premium for a silver plan would be $189, with the federal subsidy. The rate for individuals who make $3,724 a month is $354. A family of four living on $3,842 a month would pay $242 a month and household incomes of as much as $7,684 would pay $730 a month.
The total cost of the benefits offered in the exchange will be split between insurers and consumers. There are four actuarial levels in the plan, and each one is meant to clarify the value of the insurance, based on what percentage of the health care costs incurred by patients is covered by the insurer. The actuarial values are grouped by “metal level.” The bronze plan, for example, covers 60 percent of the cost of a patient’s health care; silver covers 70 percent; gold covers 80 percent; and platinum covers 90 percent.
Catamount Health, the state subsidized program for uninsured Vermonters, falls somewhere between gold and platinum, according to Lunge.
The Shumlin administration has set up six different “specified plan designs” within each “metal level” and three “choice designs” that allow insurance companies to develop alternative plans for consumers. The details of each plan vary, depending on the co-pay and coinsurance amounts for specific services.
The specified platinum plan, for example has a $250 deductible and an out-of-pocket maximum of $1,250 for medical care and $1,250 for prescription drugs. Office visits include a $10 copay, and a trip to the ER is $100.
Under the sample “choice” bronze plan, the medical deductible is $2,000 and the prescription drug deductible is $1,250. The total out-of-pocket costs are $6,250 for medical care and $1,250 for drugs. The cost of the extras — ambulance services, specialists, radiology, etc. — is shared 50/50 by patients and insurers.
Lunge presented her recommendations to the Green Mountain Care Board on Tuesday. The board will make a decision about whether to adopt the plan in late September after a public comment period of six weeks.
Two weeks ago, Lunge asked the board to consider a model plan for the scope of “essential health benefits” in the exchange. BlueCross BlueShield of Vermont was selected as the “benchmark” insurance plan for the exchange. Vermont’s two other health insurers, MVP and CIGNA, will be required to emulate the BlueCross plan.
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Shumlin administration recommends “benchmark” plan for benefits under health care exchange
VT Digger by Anne GallowayOn August 12, 2012 www.vtdigger.org
Unhealthy, Stressed Employees Are Hurting Your Business
Gallup Business Journal May 2012
How personal wellbeing directly affects a company’s bottom line
A Q&A with Tom Rath and Jim Harter, authors of Wellbeing: The Five Essential Elements
Companies that ignore their employees’ wellbeing are losing money. Here’s one big example: Employees with high wellbeing have 41% lower health-related costs compared with employees who have lower wellbeing. In a firm that has 10,000 employees, this difference amounts to nearly $30 million.
The healthcare costs of a 60-year-old with high wellbeing are lower than those for a 30-year-old with low wellbeing — which is alarming.
But the cost of healthcare is only one area that should concern business leaders. Wellbeing encompasses five distinct elements — not just Physical Wellbeing, but also Career, Social, Financial, and Community Wellbeing. All these elements have an impact on a company’s bottom line.
In the following interview, the two experts who coauthored Wellbeing: The Five Essential Elements — Tom Rath, who leads Gallup’s workplace research and leadership consulting practice, and Jim Harter, Ph.D., Gallup’s chief scientist for workplace management and wellbeing — show how wellbeing affects business performance.
Gallup Business Journal: Why is employee wellbeing relevant to executives?
Tom Rath: Executives must place a priority on wellbeing if they want to attract the right people, keep their best people, and drive their company’s financial performance.
How does wellbeing affect the bottom line?
Rath: Something I’ve heard repeatedly is that during the toughest periods of the recent financial crisis, people would spend 10 or 20 hours a month worrying and stressing about their finances while they were at work. If you tried to quantify all the productivity that organizations lost because of how stressed out people were about their personal finances, I think you would arrive at a pretty astounding number.
Jim Harter, Ph.D.: Wellbeing affects a number of different financial outcomes beyond what we have understood over the years through employee engagement. Wellbeing reflects the whole person. The whole person comes to work, not just the worker. So how you manage that person affects key outcomes like new disease burden, sick days, and obesity, which have direct implications on annual health-related costs.
We’ve also discovered that there are differences based on a person’s level of wellbeing — whether they are thriving, struggling, or suffering. Inevitably, that will affect insurance costs for everyone. So what each employee does affects everybody else.
Rath: Wellbeing also affects turnover, productivity, and accidents. People who have thriving wellbeing have a 35% lower turnover rate than those who are struggling; in a 10,000-person company, this represents $19.5 million. If you think about that in the United States in particular, where our healthcare system is essentially built by and paid for by large employers, employee wellbeing is very much an employer’s issue.
Most mid-size to large employers are self-insured, meaning they bear the burden of those costs. If I have a colleague down the hall who is going out to take a smoke break every 30 minutes and bringing donuts in every morning, I may not be the one inhaling the cigarette smoke or eating the donut, but cigarettes and bad food have just as much impact on my healthcare costs as his.
So a focus on wellbeing helps employers reduce healthcare costs?
Rath: I think maybe the biggest opportunity for decreasing healthcare costs in the United States overall is wellbeing in the workplace. It may be a really quick way to turn the tide on the epidemics of obesity, diabetes, and heart disease because of the potential of the big social networks that are organizations and employers.
Dr. Harter: Overall wellbeing relates to illness, which is associated with lower productivity and missed work. We’ve found that the healthcare costs of a 60-year-old with high wellbeing are lower than those for a 30-year-old with low wellbeing — which is alarming when you think about it.
But people rarely make difficult life-altering changes, like achieving a significant weight loss, because it will save someone else money.
Rath: No, but they might if they have a support network. Let’s say I go out on my own and try to lose weight with no support from a peer group or an employer or from a group like Weight Watchers or a Jenny Craig program. I’m not that likely to stick with the program three, six, or 12 months down the line. But if I go to a program like that and I’m assigned a random group of people to work with in trying to take off weight, my chances of sticking with it increase dramatically.
But the best condition is when you embark on some type of change — whether you’re trying to manage your finances better, whether you’re trying to lose weight, or whether you’re trying to get more involved in the community — with an existing peer group or social network, such as coworkers. We’re already starting to see this change occur when companies have conversations among local work teams about boosting wellbeing, being more active, and what they can do for the community.
Dr. Harter: And companies have an opportunity to have an impact on multiple elements, which is the key to what Tom is saying. When you have an impact on multiple elements simultaneously — not only Physical Wellbeing, for example, but Physical Wellbeing combined with Career or Social Wellbeing — then your chances of improving the trend on healthcare costs increase dramatically. These support networks become reinforcing mechanisms in our workplaces and in our social lives that keep us on the right track.
If companies take care of the whole person, they build more loyalty over time.
So do all the aspects of wellbeing support one another? If you can reinforce one, do you have a better opportunity of supporting the others?
Dr. Harter: Yes, the elements of wellbeing reinforce one another. If you try to do things in a linear or an isolated way — by focusing on an exercise program or focusing on a diet — we all know what happens. You start on your goal with all the right intentions, but your interest drops off after a while and you lose your incentive. If you see people at work or at a community outreach meeting who know your goals and intentions, it provides another reminder or source of motivation to keep up your Physical Wellbeing.
If you get physically healthier, are you more likely to become financially healthy too? Or have greater wellbeing in other areas?
Rath: Having fewer unhealthy days and, in turn, more days when you have the energy to get things done is probably the global constant through which businesses and individuals can think about the quantifiable upside of increasing wellbeing. We know from our earliest research that on a scale of 1 to 100, for every 10 points you increase your overall wellbeing score, you cut your number of unhealthy days in half. If your score goes from 70 to 80 or from 80 to 90, even if you’re already thriving, your overall wellbeing can still get a lot better if you work on it across all five dimensions.
We found that a 5-point increase in wellbeing on the same scale was associated with a 6% decline in the probability of being classified as obese. If you improve wellbeing by 10 or more points, you realize an additional 9% lower rate of new disease compared with those whose wellbeing dropped by 10 points or more.
Are many companies working on wellbeing? Is this becoming more common?
Dr. Harter: Many companies have some type of employee health risk or wellness program in place. Companies are starting to do that because they are faced with such an insurmountable challenge on healthcare costs. But organizations that are approaching wellbeing more broadly and thinking about it more holistically — beyond the physical health component — that’s in its infancy right now.
Is the economy holding these efforts back? Are companies waiting for things to improve before they put money or energy into employee wellbeing?
Dr. Harter: If so, that’s a bad idea. If companies take care of the whole person, they build more loyalty over time, and that affects their brand in many different ways. The people with the highest levels of wellbeing are the ones who are more likely to be loyal to their company. The people with the lowest levels — the ones who are struggling or suffering — are more likely to say, “If the economy changes, I’ll switch employers.”
What that also means is that if people feel like they’re being held hostage by the company, they’re not doing everything they could now to help the organization improve. They’re not making the best decisions for the employer; they’re basically waiting it out. That’s not good for a company or a person.
– Interviewed by Jennifer Robison
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Nationally Healthcare costs to reach $20,728 for family of four in 2012
Employee Benefit News By Lisa Gillespie May 22, 2012
The average cost of care for a typical family receiving health care through an employer-sponsored PPO plan in 2012 will cost $20,728, a 6.9% increase over 2011. Though this is the lowest rate of increase in 12 years, the $1,335 increase surpasses last year’s record of $1,319. This is according to the Milliman Medical Index.
“This helps illustrate the challenge of controlling health care costs. When the total cost is already so high, even a slower rate of growth has a serious impact on family budgets,” says Lorraine Mayne, principal and consulting actuary with Milliman, Inc., a global consulting and actuarial firm.
The release of this data falls during an uncertain time for health care, with the nation awaiting the outcome of the Supreme Court decision on the future of the Patient Protection and Affordable Care Act. PPACA has had only a limited effect on health care costs for families covered by an employer-sponsored plan, however the longer term implications may be greater.
“We face a number of different potential scenarios depending on the future of reform,” says Chris Girod, principal and consulting actuary with Milliman.
The MMI includes analysis of health care costs in 14 cities, highlighting the role geography plays in health care costs. This year, Miami is the most expensive at $24,964 and Phoenix the least. It also examined how employers and employees share the cost of health care. Employers contribute $12,144 of the $20,728 total, while employees through payroll deductions and out-of-pocket expenses pay the remainder.
“Some families may be surprised to hear their total average health care costs will exceed $20,000 this year,” says Scott Weltz, consulting actuary with Milliman. “While everyone knows the cost of health care is increasing, most people who receive health insurance through their employer are insulated from the true costs associated with the care they receive.
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With Governor’s Signature, Health Care Bill Becomes Law
Wednesday, 05/16/12 5:50pm Vermont Public Radio Bob Kinzel
A crowd gathered on Wednesday at the Statehouse for Gov. Peter Shumlin’s signing of the 2012 Health Care bill.
The health care bill is two inches thick, and with the stroke of his pen, the governor turned the legislation into law.
It creates a consumer marketplace Exchange where individuals, and businesses with fewer than 50 employees, will be required to buy their policies beginning in 2014. Several hundred million dollars in federal subsidies will be available to make the policies more affordable.
Shumlin said the bill is a major component of his overall economic development strategy.
“The biggest challenge that we face for growing jobs and economic opportunities in Vermont is to ensure that we have affordable universal health care,” Shumlin said.
Shumlin is encouraging many small businesses to drop their coverage in 2014 because their employees will be eligible for the federal subsidies and he says decoupling health care coverage from a person’s place of employment is a key step. “This bill will give us the federal subsidies that will make many small businesses in Vermont,” Shumlin said. “Look at the numbers and often conclude that they and their employees will be better off by letting their employees go shop in the Exchange for health insurance.” The Governor added, “that helps us move toward one single pool, one single pipeline for health insurance.”
In several weeks the U.S. Supreme Court is scheduled to rule on the constitutionality of President Obama’s health care law.
Anya Rader Wallack is the chair of the Green Mountain Care Board – a panel that oversees virtually every aspect of health care in Vermont.
She said it will be a challenge to implement a single payer system if the Court strikes down the federal subsidies. “Clearly it’s harder to do if you don’t have that federal money but we can legally do it,” said Rader Wallack. “It just means that you have to raise a lot more revenue or cut costs a lot more at the state level if you don’t have that infusion of federal cash.”
Rader Wallack said one of her chief goals over the next 18 months is to find ways to cut health care costs.
“A lot of the waste in our system is actually in unnecessary hospitalizations for people who have conditions that if they were treated right they wouldn’t be admitted to the hospital nearly as much and be readmitted as a result of not having the primary care follow up,” she said.
The U.S. Supreme Court is expected to rule on the President’s health care law by the end of June.
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Hospital budget caps set by Green Mountain Care Board
Posted By Hamilton Davis On April 19, 2012 @ 11:38 am www.vtdigger.org
Vermont health care authorities issued instructions to the state’s 14 hospitals Wednesday to keep the increases in their 2013 budgets to 3.75 percent, an even tighter lid than the last two fiscal years whose Legislature-imposed limits were 4.5 and then 4.0 percent.
The cap was set by the Green Mountain Care Board, which under state law has the authority to establish hospital budgets. The action is a significant cost constraint for the whole health care system since the state’s hospitals and the doctors whom they employ deliver more than 60 percent of the care in the state.
Anya Rader Wallack
“Keeping a tight rein on the 2013 budgets is an important step in our efforts to build toward a single payer restructuring in the state,” said Anya Rader Wallack, the chair of the Green Mountain Board. “The state’s hospitals have done an excellent job on cost containment in the last two years, and we need to keep moving in that direction.”
The board built the budget target from a baseline of a 2.76 percent increase in a federal market basket of inflation indicators and then adjusted it to 3.75 percent to account for increases in hospital costs due to aging of the population, growth in income and other investments, such as improvements in information systems. If the hospitals stay within the caps, the system increase for the year would be $78 million on a base of roughly $2 billion.
As in the past two years, hospital budget writers will have the option to ask for exemptions to the cap for items that the board believes are essential to efficiency in the system as well as to health care reform itself. These include:
•Investments by a hospital to participate in the state’s plan to replace the Vermont State Hospital.
•Increases in the provider tax levied by the Legislature.
•Acquiring doctor practices that would not add to the overall cost to the system. That means practices already operating in the hospital service area and not new practices brought into the area.
•New revenues that would accrue from serving new patients from outside the state.
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With federal loan, group launches health insurance co-op
Posted By Alan Panebaker On June 22, 2012 www.vtdigger.org
Mitch Fleischer, president of Fleischer Jacobs Group, announces a new nonprofit cooperative health insurance company has received more than $30 million in federal loan money to start up in Vermont.e Vermont insurance market may have a new kid on the block if state regulators approve a member-owned and -governed health insurance cooperative.
Mitch Fleischer, president of the brokerage and advisory firm Fleischer Jacobs Group, announced Friday that a new nonprofit called the Consumer Health Coalition of Vermont has received more than $30 million in loans from the U.S. Department of Health and Human Services to start a new health insurance model in the state.
The “Vermont Health CO-OP” plans to sell insurance to individuals and small groups on the state’s health benefits exchange that is set to start up in 2014. Co-op members will own and govern the company.
Fleischer said one of the main advantages to the nonprofit co-op model is that consumers will have a say in the direction, goals and governance of the organization.
“At the end of the day, this will be a member-managed company,” Fleischer said.
If all goes well, the group would start offering plans in fall 2013 to be sold on the exchange in 2014. The group also hopes to sell insurance to large businesses that employ 50 or more employees. Those plans will be sold outside the exchange.
The group has already begun working with Vermont Managed Care, which is owned by Fletcher Allen Health Care, to work as the company’s health care provider
The Department of Financial Regulation still must approve it as a licensed insurer.
How the co-op will fit into the health insurance market is not yet clear.
Robin Lunge, director of health care reform for the Shumlin administration, said a co-op could fit well in Vermont, but she could not speak to the specifics of the Vermont Health CO-OP given the pending regulatory review by the Department of Financial Regulation.
“My view on co-ops is they could be a good addition to Vermont’s insurance industry,” she said. “But they will need to meet Vermont standards like any other Vermont insurer.”
In July 2011 when members of the group learned about the provision in the Affordable Care Act that allowed for this type of organization. They applied for funding in January and were approved in June but held off announcing their plans until the feds issued a statement earlier Friday.
The founding board of directors, which Fleischer chairs along with prominent representatives of the business community, health care representatives and a former commissioner of the Vermont Department of Banking, Insurance, Securities and Health Care Administration (now the Department of Financial Regulation). The group plans to replace this board with a permanent operational board elected by members within two years after it issues its first policies.
So why would representatives of business and insurance brokers, often critics of health care reform in the state, want to take the bull by the horns?
Part of it is the money, Fleischer admits.
“I don’t think anyone would have embarked on this by themselves without the solvency loans,” he said.
In a written Q & A offered at a press conference Friday, the group says it hopes to be able to offer more affordable plans for its customers than existing insurance companies and allow members to save money if they are healthier.
“Our plans will be smart designs that give consumers positive incentives to get healthy and use health care wisely,” the pamphlet reads.
Fleischer said the group has received assurance that the dedicated loan funds from the Department of Health and Human Services will continues regardless of the outcomes of the Supreme Court decision on the Affordable Care Act.
The Consumer-Oriented and Operated Plans (CO-OPs) were created in the federal health care law as a sort of replacement for the public option, where government would compete with private health insurers in the exchange — the online marketplace where individuals and small groups can purchase their health insurance in 2014.
Under the federal law, the U.S. Department of Health and Human Services is charged with designating at least one CO-OP in each state. The loan to the Vermont program will provide funding for the 18-month start-up period for the new nonprofit as well as a solvency fund. Of the $33.8 million loan, more than $6 million will go to “start-up,” and about $27.5 million will go to the cash reserve “solvency fund.” The company will have to pay back the start-up loan within five years and the solvency loan within 15 years.
The U.S. Supreme Court is expected to rule on a case challenging the constitutionality of the Affordable Care Act next week. The millions of dollars in loan money heading to Vermont are already allocated and won’t be taken away, Fleischer said.
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Health costs: Is Massachusetts the only model?
Columbia Journalism Review — May 15, 2012 03:19 PM
What about Vermont? (Not to mention Maryland)
We all know Obamacare is Romneycare and Romneycare is Obamacare and that the Bay State has set the standard for everything health reform—from the individual mandate right down to ways to cut its gigantic medical bill. Or at least the media have passed along that narrative. The Wall Street Journal’s recent piece, “Same State, New Stab at Health Care,”was no exception. But it did not quite tell the whole story. The piece focused on what Massachusetts may be doing to reduce medical costs and overlooked what neighboring Vermont is already doing.
Let’s face it. Vermont is easy to dismiss. Its small population, liberal patina, and the fact that it has passed a bill that might lead to single-payer health care down the road make it a health reform outlier, far less muscular than its neighbor to the south. But we’re remiss in treating it as a stepchild when it comes to controlling health care costs. In many ways, it is trailblazer, and the press should recognize it as such.
The Journal’s piece gave the news: Massachusetts legislators unveiled legislation that would propose setting a target for the rate at which the state’s health spending should rise, which the Journal reported “would once again put the state in the forefront of efforts to remake the American health-care system.” The state, the Journal continued, is considered a laboratory, and if it manages to reduce spending, that “initiative too could eventually be imitated elsewhere.” It quoted a reliable observer from the health care cognoscenti, Paul Ginsburg, the head of a Washington think tank, the Center for Health System Change. Ginsburg said no state or initiative of the federal government has implemented such a broad effort. “There will be a lot of attention to what Massachusetts is doing,” Ginsburg told the Journal.
Anya Rader Wallack, who runs Vermont’s Green Mountain Care Board, took issue with that, telling me Ginsburg’s comment was “inaccurate.” “It leads one to believe there’s no other state working on it,” she said. “The introduction of a bill is seen as groundbreaking, when other states are already further ahead in addressing health care cost containment. “Vermont is one such state. The Green Mountain Care Board, created as part of last year’s legislation that put in place a plan for moving to a single-payer health system, “has broad responsibility and a fair amount of regulatory power,” she explained, and one of its tasks is to contain the state’s health care spending.
How is Vermont doing that?
- • The state has already set a target for restraining the growth in the budgets of the state’s fourteen hospitals. The hospitals will be allowed only a 3.75 percent increase in net patient revenues for the fiscal year beginning in October, Wallack said.
- • The board also has regulatory authority over the rise in health insurance premiums charged by the two carriers that sell in the individual and small employer group markets. (It does not have authority over the three insurers that sell to large employers.) The board can override decisions of the state insurance commissioner when it comes to rulings about premium increases for companies selling in the individual and small group markets. In most states, commissioners make the final decision on rate increases, but the industry can and sometimes does challenge them in court.
- • Vermont also has a huge dataset of claims paid by 90 percent of commercial insurers as well as Medicaid that will enable it to help set hospital budgets and judge insurance rate requests.
- • Meanwhile, there is the beginning of a unified budget—which will include Medicare and Medicaid—for the state’s total health care spending. This will also help them set an overall rate of growth for medical expenditures. Wallack believes that knowing where the money is coming from and what it’s spent on will help design programs to improve quality of care. “This amount of central planning and regulatory authority is unprecedented,” she says.
Vermont’s efforts begin to end some of the fragmentation that characterizes the way medical care is given and paid for. The unified spending budget, plus the fact that there are few payers in the state, make it easier to move to a one-payer, unified system with public financing that lowers costs for everyone—a goal Vermont hopes to achieve by 2017. Whether that happens depends on the clout of the big stakeholders in the legislative process. “Whatever we learn in Vermont should be a path forward,” Wallack added.Wallack said she did talk to a Journal reporter, whose story made passing references to other state efforts. So it’s hard to say why the Journal didn’t dig further into Vermont’s activities and instead framed its story as only another Massachusetts Miracle. The paper did note Vermont passed a law last year “that created a new regulator that can attack health costs through broad powers including capping hospital revenue and setting all provider rates.” It also mentioned that Maryland and West Virginia regulate some hospital rates. But the news decision to give short shrift to other state efforts dismisses an important part of the cost-containment story. For that matter, so does its brush-off of Maryland.
Indeed Maryland, like Vermont, has been a leader in trying to control medical spending. The state has had a system of all-payer rates for hospitals for some forty years. That means private insurers, Medicare, Medicaid, and patients who pay on their own get the same bill for a hospital service. That’s a big deal. This spring a young National Journal reporter named Margot Sanger-Katz explored Maryland’s all-payer rate system and found that in 1976 the price of a hospital admission was 25 percent above the national average; by 2009 it was 3 percent below. Her work broadens the dialogue about cost containment and shows the old timers there’s a lot more to report.
Allen: The truth about the health care exchange and schools
Opinion On February 27, 2012 www.vtdigger.org
This op-ed is by Martha Allen, a school librarian from Canaan who is the president of Vermont-NEA, the union representing 12,000 public school educators.
Many families and businesses in Vermont can’t afford the rising costs of health care, in part because certain interests are making a lot of money from the current insurance system. Some defenders of the status quo have even resorted to spreading misinformation about Gov. Shumlin’s proposed health care reforms and the position of school employees who make up
Vermont-NEA.
The governor is steering health care reform toward a necessary and worthy objective: universal access to high-quality, affordable health care, irrespective of whether or where you work. Under his plan, the eventual achievement of such a “single payer” system is linked to a new insurance exchange, which is mandated by the federal Affordable Care Act (ACA).
Predictably, there’s been a rash of fear mongering and accusations from individuals who profit from high-deductible insurance plans, and have a stake in limiting the scope and effectiveness of the exchange. To pressure the Legislature to revise portions of this year’s exchange bill, pronouncements were made implying that a “back-room” deal was cut to allow school districts’ insurance plans to be “grandfathered” out of the exchange. Schools and their unionized employees, the argument goes, are being accorded a special status denied everyone else.
This is utterly false. Yes, most school district health plans are grandfathered at present. But this is a legal option under the ACA, available to any employer whose insurance plans had workers enrolled on or before March 23, 2010, the day the law was signed. What makes this baseless charge more odious is the implication that Vermont-NEA and its members are trying to undermine health care reform. Nothing could be further from the
truth. Our union was one of the main supporters of the law that, among other things, created Catamount Health and expanded access to Medicaid and VHAP. As a result, almost 40,000 more Vermonters are now enrolled in an affordable public health care program.
Further, since the mid-1990s, Vermont-NEA and the Vermont School Boards’ Insurance Trust have managed the Vermont Education Health Initiative (VEHI), the largest health insurance
purchasing pool in the state, serving public schools and the State Teachers’ Retirement System. VEHI’s premium rate increases the past five years have averaged just 2.9 percent, saving taxpayers and school districts millions of dollars. Its extensive wellness programs have contributed significantly to keeping employees healthier and controlling costs.
And now, Vermont-NEA supports the creation of a robust and viable health care exchange. The exchange being designed by the Legislature is guided by the same basic principles as VEHI: give individuals and businesses, starting in 2014, access to comprehensive insurance plans with identical benefits but varied cost-sharing arrangements, and extend to them the risk-sharing protections and cost savings inherent to large purchasing pools. Everyone, we believe, should have access to the same affordable, comprehensive health care coverage available to most school employees through VEHI.
Critics insist the exchange will rob us of insurance “choices.” But how will choice be compromised if you can shop on the exchange for multiple plans with standardized benefits and different cost-sharing options? Moreover, the exchange’s insurance plans should be more affordable, because many Vermonters will qualify for federal subsidies.
The real story, which the exchange’s detractors don’t talk about when they run down school employees and reform advocates, is that high-deductible plans, which are lucrative products, arethe only “choice” available to most small businesses and individuals. Instead, they wax eloquent on choice and consumer empowerment. Have you ever met anyone “empowered” by the “choice” of a $5,000 or $10,000 deductible? It’s fair to question and challenge the governor’s reform policies. But it’s wrong to demand changes to reform legislation to keep pushing high-deductible plans that fatten the wallets of the few while making it harder for many Vermonters to stay healthy and get medical care they can afford.
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House gives health care bill initial OK in partisan vote, amendments fall flat
Posted by Alan Panebaker On February 24, 2012 www.vtdigger.org
Last-ditch efforts to change a health care reform bill in the House failed on the floor Thursday.
For most of the day, state representatives lobbed ideas back and forth over where Vermonters should buy their health insurance starting in 2014.
H. 559, which lays the groundwork for the state’s health benefit exchange, will require individuals and small businesses to purchase health insurance in this online marketplace.
Under the federal Affordable Care Act, participation in health insurance exchanges is voluntary, but the current bill would make it mandatory for some. House Republicans offered two amendments, both of which would have the state put the brakes on that idea.
First, Rep. Oliver Olsen introduced an amendment that would allow people to buy insurance outside the exchange if the commissioner of the Vermont Department of Banking, Insurance, Securities and Health Care Administration found plans offered inside the market cost more than 10 percent of “grandfathered” plans. Plans like the Vermont Education Health Initiative that insures the state’s teachers will be likely grandfathered under the federal health care law.
The issue, Olsen said, is that the state is going down a path it has not been down before and it should learn from its past experiments. Forcing people into the exchange does not sit well with businesses in Vermont, according to the Republican from Jamaica.
“If we lock Vermonters in a lab and allow costs to go up and they don’t have a way to get out, I can’t stomach that,” Olsen said.
The amendment died on the floor with 88 representatives voting against and 45 for.
A nearly identical amendment by Republican Reps. Mark Higley and Greg Clark failed on the floor as well, 80-57.
For more than two hours of debate, Rep. Mike Fisher, chair of the House Committee on Health Care, defended the decision made by his committee to require consumers to buy health insurance on the exchange — a regulated online marketplace akin to a travel website for health insurance.
Fisher repeatedly referred to the requirement that Vermonters buy insurance in the exchange as a consumer protection measure.
“The arguments for an outside-the-exchange marketplace I continue to not understand,” Fisher said. “It mystifies me, and I’ve spent a lot of time thinking about it.”
Fisher said plans inside and outside the exchange will be essentially the same. The difference, he said, is that plans inside the exchange allow individuals to draw down federal tax credits. Having an outside market would mean added administrative costs for the state, which would have to regulate two markets rather than one, Fisher said.
Fisher’s list of benefits for consumers in the exchange failed to convince representatives like Ronald Hubert, a Milton Republican.
Hubert, who runs his own business, balked at the idea of having the state tell him where he and employees need to buy their health insurance.
“It should be my right, not the state’s, to decide whether to buy health insurance in the exchange,” Hubert said.
Clark defended his amendment by saying that the issue is really one of choice, and Vermonters want to make a decision for themselves, particularly when it comes to what some see as an experiment.
“Idea of value comes from the fact that Vermonters would like to make their own decisions,” Clark said. “Vermonters are always willing to be led to the water trough, but, man, they get irritated when their heads are forced into the trough.”
The argument over whether to allow individuals and small groups to buy insurance outside the exchange has lingered as the prominent issue in the debate over this year’s health care reform bill. It represents a stark shift from other states that are making participation in the exchange voluntary.
Other points where the Shumlin administration and leading Democrats proposed changes to the bill, like allowing high deductible bronze plans and requiring larger businesses to buy insurance in the exchange, saw little debate Thursday.
While many House Republicans urged the body to allow greater choice, Progressive Rep. Chris Pearson and Independent Rep. Paul Poirier, both members of the health care committee, urged their fellow representatives to keep their eyes on the prize of universal health care at a fair price. Using the exchange to draw down federal funding will help do that, they said.
In another twist, Gov. Peter Shumlin issued a statement Thursday commending final federal rules that would allow the state to obtain a waiver from certain requirements of the federal Affordable Care Act and implement reforms that deviate from the federal model.
An amendment that would move up the date for financing for Green Mountain Care to before the November election failed.
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Lunge: Getting health insurance costs off the backs of Vermont’s small employers
February 16, 2012 www.vtdigger.org
Editor’s note: This op-ed is by Robin Lunge, Vermont’s director of Health Care Reform.
As we continue the good public debate about implementation of the federal Affordable Care Act and Vermont’s 2011 health care reform law (Act 48), let’s pause for just a moment to recall the context for that work. The first paragraph of Act 48 declares that health care coverage is a “public good.” This means that it needs to be available to all Vermonters on a fair basis, like electricity; because just like all Vermonters rely on our electric system for power, we all depend at some point in our life on our health care system. Transforming our health care system to meet this goal requires several strategies: a global budget for health care expenditures, a single system of administrative rules and fair provider payments, and guaranteed coverage that is not linked to employment.
The last point, “not linked to employment,” had been largely overlooked until the details of ACA requirements began to be understood by somebody other than policy wonks. Obtaining health insurance coverage through the workplace is actually an accident of history. During World War II, employers needed a way around government-imposed wage and price controls that were limiting employment growth. One thing the IRS did to help was to allow exclusion of health insurance premiums paid by employers for their employees from the employees’ taxable income.
The reason for this exclusion has long since disappeared. And its value to employees is shrinking rapidly as their share of premiums increases and as co-pays and deductibles do the same. Attempts to preserve the employment-based health insurance system have led to the creation of low premium/high deductible insurance plans that are affordable to employers but result in more and more employees ending up with bad coverage and huge out of pocket costs. If we want to control health care costs and make sure all Vermonters have good health coverage, we need to separate health care from employment.
The federal Affordable Care Act is a first step in this direction, with tax credits for small employers who decide to continue offering coverage to their employees. These tax credits are good for four years, not two as some commentators have said, with the last two years at up to 50 percent of the employer’s premium contribution. Those small employer tax credits will cushion the impact of the market fairness requirements of the ACA.
More important, small employers can simply get employee health insurance off their backs by dropping coverage with no penalty. Their employees with gross income up to $92,208 for a family of four will be eligible for subsidies through the exchange that will generally exceed the shrinking portion of the cost of coverage that Vermont’s small employers can afford. Strictly on the basis of income, approximately 86 percent of all Vermonters would be eligible for some amount of tax credit if they bought insurance in the exchange.
We need an informed conversation between Vermont’s small employers and their employees about the opportunities presented by the ACA when its exchange provisions kick in on Jan. 1, 2014. One way to get that conversation going is through use of the health reform subsidy calculator available courtesy of the Kaiser Family Foundation at http://healthreform.kff.org/subsidycalculator.aspx?source=QL [1]. Employees can anonymously type in their income, family size and other details and determine the value of the subsidy in their particular situation. Then it can be compared with their employer’s contribution. In many cases, it will be best for everyone for the employer to drop coverage and let their employees enter the exchange.
The final step is to create a truly universal health system not tied to employment. This is the real solution to our current broken system of poor coverage and increasing costs. That’s the prize that we all need to keep our eyes focused on.
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Shumlin administration makes recommendations for health insurance benefits
Posted By Alan Panebaker On February 15, 2012 Vermont Digger www.vtdigger.org
Vermonters will soon know what benefits their health insurance has to cover if they buy insurance in the individual and small group market in 2014.
The Shumlin administration has narrowed down to three, the list of potential plans that will serve as a benchmark for what services insurance companies in the state’s health benefits exchange will cover.
The short list for benchmark plans includes the state employee plan, the Blue Cross Blue Shield of Vermont HMO plan and the MVP Health Care preferred exclusive provider plan. The state employee plan offers the most covered benefits, but Lunge said, they are all similar. Two multistate plans, which are allowed under the federal law could also be sold in the exchange. Lunge said there was a potential that these plans could not adhere to Vermont standards if federal law allows, but the state has been pushing for uniform standards. “We’ve taken the position that the multistate plans shouldn’t undercut the state plan,” Lunge said.
People making up to 400 percent of the federal poverty level, that means an annual income of around $92,000 for a family of four, will receive federal subsidies if they enroll in health insurance plans through the exchange. The administration is trying to balance “rich” plans that cover lots of services with the inevitable costs that come with expanded coverage.
States are required to define just what “essential benefits” insurers in the individual and small group markets must cover. In December, the U.S. Department of Health and Human Services punted this responsibility to states to determine the benefits for these markets with the caveat that they must cover services within 10 categories.
“This means by looking at covered services, people can get a concrete idea of what is covered in the exchange in 2014,” said Lunge.
Picking a benchmark plan is the first step in narrowing down what plans in the exchange, the online marketplace for insurance that states must set up, will look like. The details of what variations of deductibles, co-pays and premiums people will pay in different plans in the exchange will come later, Lunge said.
She will present the three options to the Green Mountain Care Board Thursday. The board must choose which plan the state will use as a benchmark for essential benefits. Lunge said she hopes to see a decision by March 1.
Once the state decides which benefits must be covered, variations on the benchmark will emerge including different “medal” levels that differ in the value that insurance companies will pay for services as opposed to patients. At these medal levels (like gold, silver and bronze), deductibles and co-pays will vary also.
What people pay for health insurance will be based on a percentage of their income rather than a percentage of the benefit they will receive. Further, employers with 50 or fewer employees can drop insurance for their employees without a penalty and refer them to the exchange, where they can enroll as individuals and receive subsidies.
This structure for federal subsidies creates an environment where it benefits lower-income individuals and the state to purchase insurance through the exchange and receive subsidies, said Steve Kimbell, commissioner of the Vermont Department of Banking, Insurance, Securities and Health Care Administration. “The obvious benefit of the Affordable Care Act is to get health insurance off the backs of small employers,” Kimbell said. Kimbell said the state should take advantage of the opportunity to draw down these federal funds. “I would educate employees about their options and turn them loose [in the exchange],” he said. It appears those below 400 percent of the federal poverty level would benefit from having the most comprehensive plan in the exchange and only paying a percentage of their income regardless of how expensive the plan. The tension, Lunge said, is that for employers who continue to provide insurance and individuals above that income level, this could mean higher premiums if the state picks a broader set of benefits. This potential for a cost shift to employers and higher income Vermonters vexes the Vermont Chamber of Commerce.
Betsy Bishop, president of the Vermont Chamber, said she has concerns that some people could end up paying more for the same plan. In theory, someone making $40,000 a year could be paying less than 10 percent of his income for a cushioned health insurance plan while an individual making $50,000 could have to pay more to get the same plan because he exceeds the threshold for subsidies.
Rather than a cost shift like Medicaid, for example, where government funds undercompensate health care providers and others have to make up the difference, allowing a rich plan could hypothetically result in a benefit shift where people pay different amounts for the same services, Bishop worries. The primary concern for businesses, however, is that the state is considering what to cover without taking the costs into account. “If we don’t address costs, a major component of information is missing,” Bishop said. Looking at what benefits will be covered in the exchange without determining the financial ramifications is akin to picking out a new car without looking at the price tag, she said. Rather, Bishop says, in determining which benefits to offer in the exchange, the state should look at the entire picture, including cost ramifications.
While the short list of essential benefit plans is a small step in health care reform, one advocate for low-income Vermonters says it is an important one for consumers.
Peter Sterling, executive director of the Vermont Campaign for Health Care Security, said having defined benefits “eliminates the confusion about what’s going to get covered.”
Sterling has raised concerns that low-income individuals on state insurance programs like Catamount Health and the Vermont Health Access Plan could see increased costs when these programs go away in 2014.
He said it is too soon to tell what will happen to these people since the actual costs of insurance have yet to be defined. The Shumlin administration estimates about 80 percent of VHAP enrollees will be eligible for expanded Medicaid coverage under the federal law. The fate of the other 20 percent and many Catamount enrollees is still up in the air. The basic coverage in the three benchmark plans, Sterling said, appears to be a positive sign. “For most people not in Catamount and VHAP, this will be a step up in coverage,” he said. “At first blush, it’s a step forward.”
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Shumlin shifts on Health Benefit Exchange
Posted By Alan Panebaker On February 7, 2012 Vermont Digger www.vtdigger.org
In a substantial policy shift, the Shumlin administration announced a proposal Monday to include “bronze” plans in the health benefits exchange and exempt larger employers from the insurance marketplace.
The decision came after business owners testified last week to House and Senate health care committees, many of whom expressed concern that the administration’s original proposal would increase the cost of doing business in Vermont by disallowing high-deductible plans for employees.
At a press conference, Gov. Peter Shumlin told reporters that the exchange is merely one part of his signature health care reform effort.
“We feel strongly that the exchange is not the answer to all of Vermont’s health care problems,” Shumlin said. “If we just passed the exchange, we would not contain costs adequately and be able to provide universal access.”
The exchange, he said, should provide maximum flexibility and ensure that patients have many of the same insurance options they have now.
The federal government requires states to set up electronic marketplaces for individuals and small groups to purchase health insurance by 2014.
The federal health care reform law sets basic requirements for an exchange, but states have authority to decide matters such as essential benefits insurance companies in the exchange must cover. In 2016, all businesses with 100 or fewer employees must be able to purchase insurance through these exchanges. For 2014 and 2015, states can decide whether to include businesses with 100 or fewer or 50 or fewer employees.
The administration’s original proposal, embodied in House Bill 559, included larger employers and allowed only plans rated “silver” and above by the federal government. The bill also requires these companies to buy insurance in the exchange — a requirement that would remain for smaller businesses and individuals under the governor’s proposal.
Plans are rated by the value of health care benefits they covered compared to what individuals end up paying. Bronze is the lowest level plan under federal law.
While the exchange has been pitched as a stepping stone to a universal health care system that the state could implement in 2017 with a federal waiver, Shumlin emphasized Monday it is not the fix for all of the state’s health care problems.
What the exchange will do, Shumlin said, is allow businesses and individuals to access huge tax subsidies. It also allows the state to draw down millions of dollars in federal funding for things like technology to coordinate health care providers and reduce administrative costs.
“The exchange is helpful to Vermont to bring us federal dollars to achieve our single payer goal,” Shumlin said. “The exchange itself is not the panacea to all our problems and challenges in Vermont. It is a helpful tool but by no means a solution to Vermont’s challenges.” The exchange will help Vermonters save millions of dollars they spend on insurance brokers who help employers choose insurance plans and help insurance companies assess risks, Shumlin said. Speaker of the House Shap Smith told reporters Monday the choice to propose bronze plans and exclude larger businesses was a “very hard decision.” “I don’t think businesses speak with one voice on this issue,” Smith said. Opposing views in the business community
Reactions to the governor’s announcement resonated that message.
Betsy Bishop, president of the Vermont Chamber of Commerce, gave legislative testimony last week advocating for inclusion of a “bronze” plan, excluding businesses with 50 to 100 employees and allowing an off-exchange market.
Bishop praised the governor and the Speaker of the House for a proposal that would allow more choice for businesses.
“By allowing bronze plans, those employers being forced into exchange will have a greater choice of what to purchase,” Bishop said.
The Chamber has worked with Sens. Hinda Miller and Vince Illuzzi to introduce legislation that would limit the exchange to smaller employers, include bronze plans and make the exchange voluntary by allowing an outside market for individuals and small groups. “We’re still hoping to see some movement along making the exchange voluntary,” Bishop said. Allowing this separate market would allow more options for employers in 2014, Bishop said. If the exchange provided attractive, cost-effective options, people would choose it over other plans, she said.
Meanwhile, Vermont Businesses for Social Responsibility expressed disappointment in the governor’s announcement. Andrea Cohen, the organization’s executive director, said the group has a preference for including the larger businesses in the exchange and restricting it to higher level plans. These will both create a more vibrant exchange and provide higher quality plans for Vermonters, she said.
Vermont Businesses for Social Responsibility’s end goal, she said, is decoupling health insurance from employment, and the exchange does not do that. It can be a means to an end, however. “We just want to see good progress,” she said.
Cohen said businesses that don’t offer health care are more competitive because they save money on labor costs, while companies that offer insurance pick up the tab not only for their own employees but also higher premiums for the uninsured.
Cassandra Gekas, a health care advocate for the Vermont Public Interest Research Group, said including high-deductible “bronze” plans in the exchange would increase the number of underinsured Vermonters.
People with high-deductible plans are more likely to forgo preventive and primary care, which can lead to catastrophic illnesses and increased costs for the system as a whole, Gekas said.
Dr. Deb Richter has been advocating for a publicly finance universal health care system for years. She said the governor’s proposal was “not a catastrophic decision, but it’s not a good trend.” High deductible plans appeal to healthy people and result in insurance companies cherry-picking healthy individuals, she said.
Patients insured with high-deductible plans cannot afford to get sick, Richter said. When people cannot afford to pay their medical bills, hospitals are forced to increase costs to make up for that undercompensation. This costs are then shifted to other payers.
Under the “bronze” plan, an insurer has to pay for 60 percent of the cost of care. In theory, if a patient had a catastrophic illness and incurred $100,000 in medical bills, his or her liability would be $40,000. Out-of-pocket limits would, however, cap an individual’s personal costs to a little under $6,000 or slightly less than $12,000 for a family under the federal law. Darcie Johnston of Vermonters for Health Care Freedom, a group that opposes the state’s health care reform effort, said provisions of H.559 still in place remain problematic for businesses.
Prohibiting individuals and businesses with 50 or fewer employees from purchasing insurance outside the exchange will limit competition and increase costs, she said.
“I think it’s critical for people to buy insurance off the exchange,” she said. “If the exchange has merit, it will stand on its own.”
Anya Rader Wallack tackles health care
reform, again
by Alan Panebaker | November 7, 2011 source: Vermont Digger www.vtdigger.org
Editor’s note: This is the first in a five-part series profiling members of Gov. Peter Shumlin’s Green Mountain Care Board, a panel tasked with designing a universal health care plan for Vermont.
Anya Rader Wallack is approachable.
She has an unassuming air that makes her easy to talk to and easy to like.
At first blush, you might not peg her as the person to lead the state of Vermont into uncharted territory. But she is. As the chair of the Green Mountain Care Board, Wallack will be a major player in an unprecedented health care reform effort aimed at universal coverage for all Vermonters.
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Wallack’s easy-going style belies a wealth of experience in health care reform efforts. The former consultant and reform expert has been working on health care issues since the late 1980s when she took a job as a staff assistant for the House Health and Welfare Committee in the Vermont Legislature. Wallack worked on reform efforts in the 1990s for First Lady Hillary Rodham Clinton and for Gov. Howard Dean. Both attempts to create universal health care systems failed.
Working on the health care overhaul effort for Dean left her exhausted, Wallack said.
“We made a noble effort and crashed and burned at the end of the legislative session [in 1994],” she said.
Wallack later became the executive director of the Vermont Program for Quality in Health Care, Inc., a nonprofit health care data analysis company. She obtained a Ph.D. in social policy from Brandeis University in 2007 and became the president of a successful health care policy consulting firm Arrowhead Health Analytics.
Wallack, 45, has a penchant for analyzing data and figuring out how it fits in with the real world.
As fellow board member Con Hogan puts it, “She’s a pro.”
Now she’s back in Vermont — and in charge of arguably the most ambitious health care reform proposal since the early 1990s. Wallack began this round as the special assistant spearheading Gov. Peter Shumlin’s single-payer health care initiative, and in October she was named the chair of the Green Mountain Care Board, a five-member panel that will create a universal health care system for Vermont.
This time, Wallack says the state has it right.
She helped to author Act 48, the law passed in the last legislative session that sets the stage for a single-payer style system. The law starts with the lofty goal of providing “as a public good, comprehensive, affordable, high-quality, publicly financed health care coverage for all Vermont residents in a seamless manner regardless of income, assets, health status or availability of other health coverage.” The specific words “single payer” are not in the act, but the stated legislative goals make it clear that the objective is to create a system that offers universal health care through a single payment system for all providers.
“The first step was putting forward a plan that was the right plan,” Wallack said.
Wallack understands the complexities of analyzing data and the politics of getting things done on the ground. Her 20-some years of work in health care policy led her here, and she said this time the pieces of the reform puzzle have fallen into place.
One of the main issues the board faces, Wallack said, is making reform work in sync with the federal Affordable Care Act, which puts new state mandates in place for insurance coverage. Many of those requirements were part of reforms Vermont initiated 20 years ago. Since then, insurers have not, for example, been allowed to “cherry-pick” or pool healthy patients in plans that exclude sick patients and cost less to insure.
Many Vermont policy makers harbored the perception that the 2010 Affordable Care Act was irrelevant to the state, she said.
“I was off on the side saying, ‘no, it works for us,’” Wallack said.
She wanted to build on federal requirements like the health care exchange which will give Vermonters the ability to compare the actuarial value of health benefit plans, enroll in plans and receive tax credits or public assistance. Wallack’s idea was to use the federal law as a stepping stone and funding mechanism for a single-payer system when the state obtains a waiver for Affordable Care Act in 2017.
Wallack said it took a lot of explaining to get everyone on board with the idea, but it eventually worked.
The last key step, she said, was ensuring she had the support of the governor. The final clincher, she said, “was having a leader who was totally unafraid.”
The affability and stomach to effect change.
Wallack is originally from Vermont and kept a lot of connections here. She had been the first employee for the lobbying firm, Kimbell Sherman Ellis (now KSE Partners) before working for Dean, and she maintained ties there.
Bob Sherman, a partner at KSE, said what sets Wallack apart from other Ph.D.s is that “she can function at ground level.”
Unlike some academics, Sherman said, she has the ability to take complex issues and explain how they apply in the real world.
Sherman kept up with Wallack throughout her different jobs and educational endeavors, and he said she has maintained the equanimity that made her effective in the late 1980s.
“She didn’t lose the affability that made her a good lobbyist,” he said.
One of the struggles ahead, as Wallack leads the Green Mountain Care Board on the slow path to reform, is keeping the support of the Legislature and the people of Vermont.
She said one of the things she learned working with Dean when he was governor was how to boil down complex issues into key decision points. She has also learned from other health care reform efforts, like the one in Massachusetts, where the cost- containment plan she developed for the state sat on a shelf for two years.
Wallack said the Massachusetts health care reform effort was more complicated. The political will to take on the health care provider community was not there, and no one wanted to touch the cost-containment issue.
For now, the Green Mountain Care Board is holding educational meetings twice a week to get up to speed on health care data and evaluation systems. Wallack said one of the things the board and the state need to do is quell fears about regulation, and assure the public that changes in the health care system are not a bad thing.
“People think the private market has failed, but they don’t know where to turn,” Wallack said.
Wallack’s term as chair of the board is for seven years—enough time to see reform through. Her term will end around the time Vermont requests a waiver to implement its own universal system — if all goes according to plan.
Wallack said she thinks this time around, there’s a chance.
“We’re talking about change, and change is hard,” Wallack said. “But you’ve got a sure bet if we do nothing; you can sit here and watch the system crumble.”
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Green Mountain Care Board begins health care reform effort in earnest
by Alan Panebaker | October 4, 2011 source: Vermont Digger www.vtdigger.org
The five members of the recently appointed Green Mountain Care Board have their work cut out for them. Anya Rader Wallack, the board’s chair, reeled off a daunting to-do list for each of the new members at the board’s first official meeting on Tuesday.
Dr. Allan Ramsay, a primary care physician at Fletcher Allen Health Care, will take the lead on payment reform, workforce development and outreach. Dr. Karen Hein, a pediatrician from Jacksonville, will focus on developing a benefits package and concept framework. Con Hogan, former secretary of the Vermont Agency of Human Services, will address hospital budget rules, data and evaluation. Al Gobeille, who owns several restaurants in Chittenden County, will look at benefit design programs and examine innovative prevention programs currently being implemented by the business community in Vermont and elsewhere.
Wallack said she wanted to focus on fulfilling the principles behind Act 48, the legislation that created the board, and to “engage everybody and craft something that makes sense.”
The Green Mountain Care Board is the product of Act 48, which the Vermont Legislature passed in May. The legislation is designed to set the stage for a universal medical system, which would expand on the state’s existing public health care programs under Green Mountain Care. The act puts Vermont on track to become the first state in the nation to implement a form of “single-payer” health care in which one entity, answerable to the government, collects all health care fees and pays out all health care costs. Green Mountain Care is to “provide, as a public good, comprehensive, affordable, high-quality, publicly financed health care coverage for all Vermont residents in a seamless manner regardless of income, assets, health status, or availability of other health coverage.”
Proponents of the plan say the plan will result in administrative savings and universal coverage. Detractors believe the single payer approach will bankrupt the state and drive businesses out of state.
The members of the Green Mountain Care board were selected by a nominating committee. The final candidates were hand-picked by Gov. Peter Shumlin. Under the act, the board’s primary duties include oversight and implementation of a health care payment plan as well as implementing regulations for payment reform and containing costs. The board will also create rules defining and outlining a benefits package.
The Legislature handed the board a monumental task, and a tentative timeline on the Joint Fiscal Office Web site lists January 2014 as the earliest possible time the Green Mountain Care Program could go into effect. The board begins its work in earnest this month, as it begins to collect data and other information. More deliberative sessions will begin in November, Wallack said.
Ramsay, who will focus on payment reform, said the first step is to “get everybody on board with what we define as value in the health care system.”
He explained that he sees value as an equation of the quality of care provided and patient satisfaction over the costs. The bottom line, Ramsay said, is getting away from disease management and toward an emphasis on overall health.
“If we can shift the paradigm to maintaining better health, that’s the governor’s major goal,” Ramsay said. “That’s what Vermonters want.”
Wallack also said medicine should shift its focus toward preventive care. The current fee-for-service payment model rewards medical providers for conducting more procedures and tests. She wants to develop a payment methodology that rewards providers for being more efficient and offering better service. In order for this to work, Wallack said the board will have to integrate prevention services with the benefits package and overarching targets for controlling the rate of growth in medical spending.
“I want to see a healthcare system that provides access to quality care for everybody and costs are sustainable because we make the right kind of changes in health care delivery and cost containment,” Wallack said.
She said, as a Green Mountain Care program goes into effect, people will first see changes in insurance rates and hospital budgets. Many of the effects, however, will be invisible to the average consumer other than the fact that they will hopefully be gaining more access to health care.
For now, the Green Mountain Care Board’s future is somewhat vague, and it may take six to eight months to file rules. Appeals of board decisions would go straight to the Vermont Supreme Court, said Special Assistant Attorney General Clifford Peterson, who is acting as the board’s legal counsel.
The board will hold meetings Oct. 11 and 12 from 10 a.m. to noon and 1 p.m. to 3 p.m. respectively. These early meetings will focus on data and the hospital budget process. The board should have a website by the end of October; in the meantime,meeting dates will be posted on the Vermont Secretary of Administration website.
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by Hamilton Davis | September 13, 2011, Vermont Digger www.vtdigger.org
Anya Rader Wallack speaking to reporters on Tuesday. VTD/Josh Larkin
Governor Peter Shumlin,Tuesday, appointed Anya Rader Wallack, the consultant who has been leading the design of a single-payer health are system for Vermont, to chair the new, five-member Green Mountain Care Board that will oversee management of the health care system in the state.
The new board will continue to design some aspects of the proposed single-payer system, but will also assume ultimate responsibility for the functions now carried out by the Department of Banking, Insurance, Securities and Health Care administration (BISHCA). Those include the establishment of hospital budgets, as well as authorizing the addition of capital projects or new services in those hospitals.
Shumlin administration officials have recommended BlueCross BlueShield of Vermont as the “benchmark” plan for benefits to be offered under the federally required insurance “exchange.”
The state’s two other health care insurance companies — CIGNA and MVP — must match the BCBS benchmark for coverage offered in the exchange.
The recommendation is another step in the Shumlin administration’s long climb toward health care insurance reform under the Affordable Care Act. In a little more than a year, the state will be required to offer a health care “exchange” for about 74,162 Vermonters — or about 12 percent of the state’s population.
Individuals and businesses with fewer than 50 employees will be required to purchase insurance through the exchange starting Oct. 1, 2013. Coverage begins in 2014; at that point, the federal government will offer subsidies for individuals who earn less than $92,500 per year.
Vermont is the only state to require small businesses to participate in the program. Shumlin administration officials have suggested that companies with fewer than 50 employees drop coverage of workers so that the workers can qualify for individual subsidies.
Robin Lunge, the director of health care reform for the Shumlin administration, and Mark Larson, the commissioner of the Department of Vermont Health Access, recommended BCBS as the benchmark plan to the Green Mountain Care Board last Thursday.
The board will decide which insurance plan will serve as the model for the exchange. Two other insurers besides BCBS have been considered: MVP, based in Schenectady, N.Y., and CIGNA, a global health insurance company with offices in Burlington.
Lunge said the state analyzed about 500 different plans offered by the state’s three insurers. Officials determined that despite the large number of plans available in Vermont, there is very little difference between the benefits packages for consumers.
The Affordable Care Act requires individual and small group health insurance plans to cover what are known as “essential health benefits.” Under the federal law, the “benchmark” plan must cover the following: emergency care, hospitalization, maternity and newborn care, mental health and substance abuse services, prescription drugs, chronic disease management, lab tests, wellness and prevention, pediatric care, and rehabilitative services for adults and habilitative services for children with developmental issues.
Lunge and Larson said using BCBS as the “benchmark” would be the least disruptive option since 77 percent of Vermonters who are currently in the small group or individual markets use the nonprofit insurer. The MVP plan is virtually identical to the benchmark, but fewer Vermonters use this carrier.
“We are choosing something as our baseline that is very traditional in the market today,” Larson said.
CIGNA insures state employees, and some advocates have held up the Vermont State Employees Association benefit package as the preferable option for the exchange. Despite the perception that the CIGNA plan for state workers is a “richer” plan, Lunge said an analysis from the state shows there is a 1 percent difference between the state employee package and the BlueCross BlueShield “benchmark” plan. The 1 percent difference? State employees receive coverage for infertility treatments and adult vision, Lunge said.
Once the Green Mountain Care Board settles the benefit “benchmark” question, insurance carriers will determine how much it will cost to offer the package based on “cost-sharing” mechanisms consumers would be required to pay for — a mix of coinsurance, deductibles and copayments. Under the federal law, deductibles in the exchange are limited to $2,000 for individuals and $4,000 for families. Premium prices will be based on the actuarial value, or consumer cost-sharing level.
The plans, approximately 10 to 20 in all, will also be rated by actuarial value. The Affordable Care Act has set up standards for four categories, based on the ratio of the amount paid by insurers and consumers: bronze (60 percent covered by insurance/40 percent by consumers), silver (70 percent insurance/30 percent consumers), gold (80 percent insurance/20 percent consumers), platinum (90 percent insurance/10 percent consumers).
The benefits offered in the exchange will be identical — no matter what the actuarial value, Lunge and Larson said.
The exchange is designed to make it easier for consumers to make apples to apples comparisons between plans, Larson said. The information will be available on a state website.
The Shumlin administration has said it would encourage small employers to drop insurance coverage of individuals so that they can qualify for subsidies.
VPR reporter Bob Kinzel asked if the administration was requiring businesses to take leap of faith by letting workers fend for themselves when there is uncertainty about the law.
“One of the challenges is there is always uncertainty in terms of future policy,” Lunge said. “We have to make decisions about what we know and what is likely to happen.”
Since the U.S. Supreme Court ruled in June to allow the individual mandate provision of the Affordable Care Act to stand, more states are planning an exchange, Lunge said.
“To me it doesn’t make sense to make decisions based on unknowns,” she said.
Jeffrey Wennberg, director of Vermonters for Health Care Freedom, an anti-single payer group, doesn’t oppose the exchange per se, though he says the reason there is so little variation in benefits from one insurer to another is because the Vermont Legislature has “mandated coverage of a great many health benefits over the years.”
Wennberg tied the mandates to a dramatic increase in premiums over time. “This is also a major reason why Vermont health insurance premiums are high compared with other states,” he wrote in a statement.
In 2016, the exchange will include businesses with 51-100 employees. After that, the Shumlin administration hopes to bring large employers into a single-payer style plan.
Wennberg says at that point Vermonters will no longer be able to choose between insurers. “Notably absent from the administration’s talking points was the fact that within three years of the establishment of the exchange all choice will be outlawed and everyone who was forced into the exchange will be herded into the single payer government monopoly plan,” Wennberg said.
Donna Sutton Fay of the Vermont Campaign for Health Care Security, an affordable health care advocacy group, called the benchmark recommendation a “landmark first step in Vermonters learning about what health care will look like in 2014.” She says BCBS offers better coverage for mental health and substance abuse treatment than MVP.