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Introduced by Representatives Obuchowski of Rockingham, Botzow of Pownal, Brooks of Montpelier, Clarkson of Woodstock, Davis of Washington, Deen of Westminster, Edwards of Brattleboro, Emmons of Springfield, Fisher of Lincoln, Haas of Rochester, Jewett of Ripton, Kitzmiller of Montpelier, Klein of East Montpelier, Marek of Newfane, Moran of Wardsboro, Mrowicki of Putney, Pearson of Burlington, Pellett of Chester, Pillsbury of Brattleboro, Shand of Weathersfield, Smith of Morristown, Stevens of Shoreham and Zuckerman of Burlington

Referred to Committee on


Subject:  Health; Vermont health care plan; universal coverage

Statement of purpose:  This bill proposes to establish the Vermont health care plan as a universally accessible, comprehensive, publicly administered health benefit plan offering care and treatment to all Vermont residents.


It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  33 V.S.A. § 1901d is amended to read:


(a)  The state health care resources fund is established in the treasury as a special fund to be a source of financing health care coverage for beneficiaries of the state health care assistance programs under the Global Commitment to health waiver approved by the Centers for Medicare and Medicaid Services under Section 1115 of the Social Security Act.

(b)  Into the fund shall be deposited:

(1)  all revenue from the tobacco products tax and 82.5 percent of the revenue from the cigarette tax levied pursuant to chapter 205 of Title 32;

(2)  revenue from health care provider assessments pursuant to subchapter 2 of chapter 19 of this title; and

(3)  the proceeds from grants, donations, contributions, taxes, and any other sources of revenue as may be provided by statute, rule, or act of the general assembly;

(4)  all federal receipts for health care purposes, including all Medicaid receipts and all Medicare receipts upon federal approval; and

(5)  revenue from the sources established to fund the Vermont health care plan established under subchapter 6 of chapter 19 of this title.

* * *

Sec. 2.  33 V.S.A. chapter 19, subchapter 6 is added to read:

Subchapter 6.  Vermont Health Care Plan


(a)  The governor shall appoint, with the advice of the senate, three individuals to serve as members of the Vermont health care 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)(1)  The Vermont health care plan board, on or before January 15, 2008, shall propose to the general assembly the establishment of the Vermont health care plan, a universally accessible, comprehensive health benefit plan offering coverage of high quality care and treatment to all Vermonters. 

(2)  Vermonters eligible for Catamount Health or a federally funded health care program shall be eligible for coverage of any benefits provided by the Vermont health care plan that are not covered by Catamount Health or the federally funded healtlh care program.  For purposes of this subdivision, “federally funded health care program” means Medicare, Medicaid, the Vermont Health Access Plan, Dr. Dynasaur, VPharm, VermontRx, Catamount Health Premium Assistance, employer-sponsored insurance premium assistance, another Medicaid-waiver program, or any other program covering health benefits using federal funding.

(c)(1)  The Vermont health care plan shall offer a standard health benefit plan to all residents of this state.  The standard benefit plan shall provide coverage of medically appropriate and cost-effective care and treatment, including:

(A)  outpatient primary and specialty care;

(B)  inpatient hospital and nursing home care;

(C)  prescription drugs;

(D)  durable medical equipment;

(E)  mental health and substance abuse treatment;

(F)  preventive and medically necessary dental care;

(G)  hospice and other palliative care;

(H)  nursing home, community-based, and other long‑term care;

(I)  preventive health care; and

(J)  any other benefits established by the board.

(2)  Specific health care and treatment covered by the standard benefit 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 care services and technology; and

(E)  revenues anticipated to be available to finance the Vermont health care plan.

(3)(A)  The board shall establish a public process for the development of an annual budget to finance the Vermont health care 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 1 of each year, including recommended expenditures during the next succeeding calendar year for each sector of the health care system providing care and treatment under the Vermont health care plan and anticipated revenues available to support such expenditures.

(B)  After the general assembly’s approval of the budget for the Vermont health care plan, the board shall establish by rule standards and procedures to provide health care coverage and expenditures that are in financial balance with the approved budget.  Such standards and procedures may include:

(i)  annual budget allocations for hospitals, health care provider specialties, and other health care sectors;

(ii)  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 care and treatment efficiently and may include fee supplements to encourage care and treatment by different specialties or in different geographic regions of the state;

(iii)  a reference pricing reimbursement mechanism whereby a consumer may choose to pay additional reimbursement for health care treatment determined by the board to be less effective or more expensive than other comparable health care treatment; and

(iv)  limits on the number of health care specialists that may be licensed under chapter 23 of Title 26 during any two-year period.

(4)  No assistance shall be provided under this chapter with respect to a health care expense that may be covered in whole or in part by Title XVIII of the Social Security Act (Medicare) or by any public or private health insurance plan.

(d)(1)  Any Vermont resident and any insured or self-insured group on behalf of Vermont resident beneficiaries may enroll in the Vermont health care plan.

(2)  The board shall adopt by rule eligibility criteria for enrollment in the Vermont health care plan.  The board shall not require that the applicant demonstrate that he or she has been without health care coverage prior to enrollment, but the board may establish rules to protect the financial solvency of the plan from adverse selection.

(3)  The board shall establish a residency requirement that the applicant demonstrate that he or she is 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 board shall adopt by rule standards and procedures for determining whether a person is a resident.  Such rules shall include:

(A)  a provision requiring that the applicant has the burden of proof in determining residency;

(B)  reasonable durational domicile requirements;

(C)  a provision that a residence established for the purpose of seeking health care coverage shall not by itself establish that the applicant is a resident of this state; and

(D)  any other provision useful in determining whether the applicant is permanently domiciled in this state.

(e)  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.


(a)  A sustainable health care special committee is created to determine the appropriate funding mechanisms for the Vermont health care plan and shall consider at a minimum the following funding sources:  an income tax, a payroll tax, premiums or cost-sharing measures, a value-added tax, or other consumption tax. 

(b)  The sustainable health care special committee shall consist of the joint fiscal committee, the chair of the health access oversight committee, the chair of the commission on health care reform, the secretaries of the agency of human services and agency of administration, and the commissioner of the department of banking, insurance, securities, and health care administration.  The committee may meet for no more than six meetings or public hearings and shall have such powers as are needed to carry out the purposes of this section.  Committee members who are not full‑time state employees shall be entitled to per diem compensation and expense reimbursement as provided in 32 V.S.A. § 1010. 

(c)  The sustainable health care special committee shall issue to the general assembly no later than January 15, 2008 a report with a recommendation on funding the Vermont health care plan.

Sec. 4.  2 V.S.A. § 903(b) is amended to read:

(b)(1)  Administration without assumption of risk.  No earlier than October 1, 2009, the commission on health care reform shall evaluate the Catamount Health market to determine whether it is a cost-effective method of providing health care coverage to uninsured Vermonters, taking into consideration the rates and forms approved by the department of banking, insurance, securities, and health care administration, the costs of administration and reserves, the amount of Catamount Health assistance to be provided to individuals, whether the Catamount Health assistance is sufficient to make Catamount Health affordable to those individuals, and the number of individuals for whom assistance is available given the appropriated amount.  Prior to making its determination, the commission shall consider the recommendations of a health care and health insurance consultant selected jointly by the commission and the secretary of administration.

(2)  If the commission determines that the market is not cost-effective, the agency of administration shall issue a request for proposals for the administration only of Catamount Health as described in section 4080f of Title 8.  A contract entered into under this subsection shall not include the assumption of risk.  If Catamount Health is administered under this subsection, the agency shall purchase a stop-loss policy for an aggregate claims amount for Catamount Health as a method of managing the state's financial risk.  The agency shall determine the amount of aggregate stop-loss reinsurance and may purchase additional types of reinsurance if prudent and cost-effective.  The agency may include in the contract the chronic care management program established under section 1903a of Title 33.

(3)  If Catamount Health is offered as a self-insured product, the requirements of section 4080f of Title 8 and subchapter 3a of chapter 19 of Title 33 shall apply to the extent feasible.  The individual contributions set in subchapter 3a of chapter 19 of Title 33 shall be the premium amounts charged to individuals.

modify eligibility for the Vermont health care plan established in subchapter 6 of chapter 19 of Title 33 to ensure that all Vermonters enrolled in Catamount Health are provided coverage for health services no later than October 1, 2009.


The sum of $500,000.00 is appropriated from the state health care resources fund to the Vermont health care plan board in fiscal year 2008 to carry out the purposes of this act.

Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont