Introduced by Representative Fisher of Lincoln
Subject: Health; freedom and unity health plan; income tax; payroll tax
Statement of purpose: This bill proposes to establish the Vermont freedom and unity health plan to cover certain health-related services for all Vermonters.
AN ACT RELATING TO THE VERMONT FREEDOM AND UNITY HEALTH PLAN
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 33 V.S.A. chapter 19, subchapter 3 is amended to read:
Subchapter 3. Vermont Health Access Trust Fund
* * *
§ 1972. VERMONT HEALTH ACCESS TRUST FUND ESTABLISHED
The Vermont health access trust fund is hereby established as a special fund
in the state treasury for the purpose of
establishing a special fund to be
the single source to finance financing health care coverage for
beneficiaries of all state health care assistance programs
administered by the department of prevention, assistance, transition, and
health access agency of human services, including the Vermont freedom
and unity health plan.
(b) Into the fund shall be deposited:
(1) revenue from the cigarette and tobacco products tax established in chapter 205 of Title 32;
(2) revenue from health care provider assessments collected and deposited into the health care trust fund pursuant to subchapter 2 of chapter 19 of this title;
(3) transfers from the tobacco litigation settlement fund established in section 435a of Title 32, authorized by the general assembly;
transfers from the general fund, authorized by the general assembly;
(5) the proceeds from grants, donations, contributions, and taxes and any other sources of revenue as may be provided by statute or by rule;
(6) all federal receipts for health care purposes, including all Medicaid receipts;
(7) revenue from the Vermont freedom and unity health plan personal income tax surcharge established under section 2036 of this title; and
(8) revenue from the Vermont freedom and unity health plan payroll tax established under section 2037 of this title.
(c) The fund shall be administered pursuant to subchapter 5 of chapter 7 of Title 32, except that interest earned on the fund and any remaining balance shall be retained in the fund. The department shall maintain records indicating the amount of money in the fund at any time.
(d) All monies received by or
generated to the fund shall be used only for the administration and delivery of
health care covered through state health care assistance programs administered
department of prevention, assistance, transition, and health access
agency of human services, including the Medicaid program, the Vermont
health access plan program, the Vermont health access plan-pharmacy program,
the VScript program, the VScript-Expanded program, the state children’s health
insurance program, the General Assistance program, the Vermont freedom and
unity health plan, and any other state health care assistance program
administered by or through the department agency.
Sec. 2. 33 V.S.A. chapter 19, subchapter 6 is added to read:
Subchapter 6. The Vermont Freedom and Unity Health Plan
§ 2031. DEFINITIONS
As used in this subchapter:
(1) “Health care provider” shall have the same meaning as in subdivision 9432(8) of Title 18 , but shall also include health care facilities as defined in subdivision 9232(7) of Title 18.
(2) “Health services” means any medically necessary treatment or procedure to maintain, diagnose, or treat an individual’s physical or mental condition, including services provided pursuant to a physician’s order, and services to assist in activities of daily living provided by a health care provider or in a health care facility as defined in subdivision 9432(8) of Title 18 or residential care facility as defined in section 7102 of this title.
(3) “Qualifying disease” means a specific health or behavioral health condition chosen by the board for which the payment of medically necessary health services will be covered by the Vermont freedom and unity plan.
(4) “Vermont resident” means an individual domiciled in Vermont as evidenced by an intent to maintain a principal dwelling place in Vermont indefinitely and to return to Vermont if temporarily absent, coupled with an act or acts consistent with that intent. The secretary of human services shall establish specific criteria for showing residency.
§ 2032. VERMONT FREEDOM AND UNITY HEALTH PLAN BOARD
(a) The governor, the senate committee on committees, and the speaker of the house shall appoint one individual each to serve as members of the Vermont freedom and unity health plan board within 60 days of passage of this section. Members shall serve for three‑year terms or until a successor is appointed, except that initial terms shall be staggered so that no more than one board member’s office shall become vacant during any calendar year. The governor may remove a member from office only for cause, after notice and hearing.
(b) The board shall have the powers of a nonprofit corporation established under Title 11B in carrying out the purposes of this section. The board may adopt such rules as are necessary or desirable in carrying out the purposes of this section.
(c) On or before January 15, 2006 and annually thereafter, the Vermont freedom and unity health plan board shall propose to the general assembly the Vermont freedom and unity health plan, a universally accessible health benefit plan offering coverage to Vermont residents for medically appropriate and cost-effective care and treatment for specific health services or coverage for Vermont residents with qualifying diseases. The board shall incrementally increase over time the number of health services and the types of qualifying diseases covered under the plan subject to funding. The annual plan shall include a summary of any proposed changes to the plan. The first annual plan shall provide coverage for routine or preventative health services, including any associated diagnostic tests and x-rays, primary care health services, and prenatal health services.
(1) Specific health services covered by the Vermont freedom and unity plan shall be determined and amended by the board after consideration of:
(A) a public process designed to respond to Vermonters’ health care values and priorities;
(B) credible scientific research and comment by health care professionals concerning clinical efficacy and risk;
(C) health care ethics;
(D) the cost-effectiveness of health services and technology;
(E) revenues anticipated to be available to finance the Vermont freedom and unity health plan; and
(F) the state health plan and the health resource allocation plan established under section 9405 of Title 18.
(2) No assistance shall be provided under this chapter with respect to a health service that may be covered in whole or in part by Title XVIII of the Social Security Act (Medicare) or by any other public health benefit plan.
(d)(1) The board shall establish a public process for the development of an annual budget to finance the Vermont freedom and unity health plan. The budget process shall provide an opportunity for informed debate by consumers, health care providers, and any other individuals or organizations with an interest in the development of the annual budget. The board shall propose its budget to the general assembly on or before January 15 of each year, including recommended expenditures during the next succeeding calendar year for each sector of the health care system providing a health service under the Vermont freedom and unity health plan and anticipated revenues available to support such expenditures.
(2) After the general assembly’s approval of the budget for the Vermont freedom and unity health plan, the board shall establish by rule standards and procedures to provide coverage of health services and expenditures that are in financial balance with the approved budget. Such standards and procedures may include:
(A) annual budget allocations for hospitals, health care provider specialties, and other health care sectors;
(B) uniform reimbursement mechanisms, including a fee‑for‑service mechanism with volume controls for licensed or certified health care providers. Reimbursement mechanisms shall adequately compensate for the operating costs of providing health services efficiently and may include fee supplements to encourage care and treatment by different health care provider specialties or in different geographic regions of the state;
(C) a reference pricing reimbursement mechanism whereby a consumer may choose to pay additional reimbursement for health services determined by the board to be less effective or more expensive than other comparable health services; and
(D) limits on the number of health care provider specialists that may be licensed under chapter 23 of Title 26 during any two-year period.
(3) The Vermont freedom and unity health plan required by this subchapter shall negotiate with health care providers and health care provider networks to establish a payment structure for the covered health services that is sufficient to provide reasonable access to health services covered by the Vermont freedom and unity health plan, to provide sufficient payment to health care providers to cover actual costs, and to encourage health care provider stability. Individuals covered by the Vermont freedom and unity health plan shall be considered Medicare beneficiaries for purposes of chapter 65 of this title (Medicare balance billing).
(e) After approval of the Vermont freedom and unity health plan by the general assembly, the agency of human services shall publish a description of the services covered by the Vermont freedom and unity health plan required by this subchapter.
§ 2033. COST SHARING
The board shall establish by rule income-sensitized, minimal deductibles, co-payments, or other cost‑sharing amounts applicable to the Vermont freedom and unity health plan required by this subchapter. The plan may also include financial or other incentives that have been demonstrated to encourage healthy lifestyles.
§ 2034. ADMINISTRATION
(a) The administration of the Vermont freedom and unity health plan shall be first offered to qualified bidders through requests for proposals. If no bids are received, the agency of human services shall administer the plan.
(b) To qualify as a carrier of the Vermont freedom and unity health plan required by this subchapter, a health insurance carrier must:
(1) provide coverage for individuals with qualifying diseases and the health services included by the board in the Vermont freedom and unity health plan and for certain health care providers required under state law;
(2) cover preexisting conditions; and
(3) have no waiting period for coverage.
(c) Any prescription drug coverage offered by the plan required by this subchapter shall be consistent with the standards and procedures applicable to the pharmacy best practices and cost control program established by sections 1996 and 1998 of this title.
(d) The agency or plan administrator shall make available the necessary information, forms, and billing procedures to health care providers to ensure payment for health services covered under the Vermont freedom and unity health plan. The agency or plan administrator shall inform health care providers of acceptable proof of residency which will qualify an individual for coverage.
(e) The agency or plan administrator shall use the simplest form used to determine eligibility for Medicaid, the Vermont health access plan, or any state pharmacy program for enrollment in the Vermont freedom and unity health plan to ensure that any individual eligible for Medicaid, the Vermont health access plan, or the state pharmacy programs has the opportunity to enroll. The agency of human services shall provide coverage for health services up to three months prior to the date of application for Medicaid, the Vermont health access plan, or the state pharmacy programs. The agency shall seek any necessary amendments to any state plans or federal waivers necessary to implement this subsection.
(f) A beneficiary aggrieved by an adverse decision of the agency or plan administrator may appeal to the human services board as provided for in section 3090 of Title 3.
§ 2035. REPORTING
The health access oversight committee established by Sec. 13 of No. 14 of the Acts of 1995 shall be responsible for legislative oversight of the implementation and ongoing operation of the plan required by this subchapter. The secretary and the board shall report on the implementation of the plan and ongoing operation and financial status of the plan at such times and with such information as the committee determines is necessary to fulfill its legislative oversight responsibilities. The committee’s annual report on the Vermont health access plan shall include findings and recommendations concerning the plan required by this subchapter.
§ 2036. THE VERMONT FREEDOM AND UNITY HEALTH PLAN
On or before January 1, 2006, the commissioner of taxes shall file for consideration proposed legislation with the general assembly for the establishment of a Vermont freedom and unity health plan income tax. The proposed legislation shall conform to the following principles:
(1) The Vermont freedom and unity health plan income tax shall be established as an increase in the state personal income taxation rate or as a surcharge on an individual’s income tax obligation.
(2) The Vermont freedom and unity health plan income tax shall raise the additional monies needed to fund the Vermont freedom and unity health plan after accounting for the payments made to the Vermont health access trust fund from federal receipts, the Vermont freedom and unity health plan payroll tax, and the cigarette and tobacco products taxes.
(3) Individuals shall receive a credit against their Vermont freedom and unity health plan income tax for any Medicare premiums paid by the individual.
§ 2037. VERMONT FREEDOM AND UNITY HEALTH PLAN PAYROLL
On or before January 1, 2006, the commissioner of taxes shall file for consideration proposed legislation with the general assembly for the establishment of a Vermont freedom and unity health plan payroll tax. The proposed legislation shall conform to the following principles:
(1) All employers, including all agencies or instrumentalities of the state, shall pay a tax on total gross annual payroll in excess of $20,000.00. The legislation shall include a schedule imposing tax rates that vary with the range of average annual compensation paid by the employer. The rates of tax shall be fixed to raise the same aggregate amount that would have been spent by employers on health care premiums and other health care expenditures in the first year the tax established by this section takes effect.
(2) For the period of time when an employer is under a contractual or legal obligation to provide an employee with health care benefits that are covered by Vermont freedom and unity health plan benefits, the employer shall receive a credit against its Vermont freedom and unity health plan payroll tax obligation equal to the amount it pays during any tax period for such benefits. Entitlement to the credit shall lapse upon expiration of the contractual or legal obligation.
The Vermont General Assembly
115 State Street