H. 524 -- An Act Relating to Universal Access to Health Care in Vermont
Questions & Answers
House Health Care Committee
April 19, 2005
1. WHAT IS THE PROBLEM WITH HEALTH CARE?
Health care costs are 14.7% of Vermont's gross state product and are increasing at more than 10% annually ($350 million growth in 2005) - that's $40,000/hour just for the increase (in 2004, the median annual income for a two-person household was $42,798).
Some of the effects of this problem:
· The Health Access Trust Fund is in deficit and revenues cannot keep pace with costs.
· Ten percent of the state's residents don't have health insurance.
· More and more Vermonters are underinsured and at risk of losing health insurance as employers are forced to cut health insurance costs to remain competitive and as costs are shifted onto those who can least afford to pay.
In short, Vermont's health care infrastructure, Vermonters' financial security and the state's economy are at risk. The state must act to change direction before this crisis worsens. For every day that we fail to act, health care costs increase by another nearly $1 million.
2. HOW WILL H.524 CONTROL HEALTH CARE COSTS?
Health care costs will be controlled through a long-term strategy for integrating the health care delivery system, global budgeting of hospitals, aligning health care professional reimbursement with best practices and outcomes rather than utilization, lowering the rate of health care spending, and engaging Vermonters in their health care by promoting self-care and healthy lifestyles. To ensure financial sustainability of Green Mountain Health, the bill establishes a goal to slow the rate of growth of health care costs to seven percent or less by the year 2010. Cost control cannot be accomplished overnight. That's why it's so important to begin the process described in H.524 now.
3. WHAT ARE THE IMPLEMENTATION DATES FOR GREEN MOUNTAIN HEALTH?
The House Plan commits the state to providing universal access to primary and preventive care services by July 1, 2007, hospital services by October 1, 2007, and other essential services by July 1, 2009.
4. WHY HAVE IMPLEMENTATION DATES IF MUCH WORK REMAINS TO BE DONE?
Until an implementation date is set, there is no focus for all the parties that need to come together to make this work. Imagine the chaos of a NASA launch without a set launch time. Establishing real deadlines says we're serious about solving this problem and provides the focus for necessary information gathering and debate in the coming months.
5. WHAT STUDIES ARE INCLUDED IN THE BILL?
The bill includes two major studies to be done by the end of 2005:
· A study of the economic impact of the implementation of a universal access health care plan in Vermont funded primarily by broad-based taxes, including impacts on existing businesses, on the future growth of the economy and the economic competitiveness of Vermont, and of doing nothing to change the current system (see Section 2 of the bill for more details).
· A study of the various financing options and implications for financing Green Mountain Health, including adjustments to the income tax, a payroll tax, premiums or cost-sharing measures, consumption taxes, and specific more limited taxes to support parts of the health care system financial needs. Also to be studied are other revenue sources replaced or tax offsets, including current insurance risk pools, reductions in current and future liabilities, and net costs/savings for public and private entities and individuals due to the new system.
6. WHAT WILL HAPPEN AFTER THE STUDIES ARE DONE?
The House Health Care Committee will review the goals and target dates based on the studies and on information received from the public over the summer and fall. Depending on those studies and feedback from Vermonters, the committee expects to propose a bill next year that would include more details on the financing and structure of the Green Mountain Health Plan.
7. HOW WILL YOU GATHER INFORMATION FROM THE PUBLIC?
A joint House and Senate committee will travel around the State during the summer and fall to hear from Vermonters. These meetings will be structured both to give information (public education) and to receive comments and suggestions. Informational tools envisioned include holding regional public hearings; conducting meetings with stakeholders, such as citizens, employers, hospitals, health care professionals, and insurers; soliciting information through a survey; facilitating focus groups, and maintaining a web site.
8. HOW WILL THE PLAN WORK WITH MEDICARE?
Medicare is completely a federal program and will not change as a result of H.524. Proposed §27(d) makes it clear that Green Mountain Health (GMH) will be a secondary payer relative to Medicare and any other health benefit plan funded solely with federal funds (such as federal employee plans). This means that Medicare will pay first and GMH will pay for any covered services not included in Medicare. For example, GMH may take away the need for some or all of Medicare supplemental insurance.
9. WHY DOES THE STATE REORGANIZATION NEED TO HAPPEN NOW?
The Committee will present amendments to these sections to respond to comments from the Administration and allow more time for the reorganization. However, it is still necessary to start the reorganization during the next fiscal year to enable the state to accomplish various tasks leading up to the implementation of universal health care in 2007. Regardless of what happens in the future, the Committee believes it makes sense to combine the three offices/divisions into a combined health care department. It will make for better, more efficient government and provide better focus as we address this important issue going forward.
10. WHAT ARE COMMUNITY HEALTH BOARDS?
Community health boards are a new idea to help provide better, more coordinated, patient-centered care by formalizing the regional coordination that happens now in many areas of the state. The joint study committee will look closely at the community health boards idea and integrated systems of care and propose more details next year. Questions to be addressed include: What constitutes a region and how many should there be? How will community health boards be established? What authority will they have? Who will serve on the boards?
11. HOW WILL DOCTORS AND HOSPITALS BE PAID?
Doctors, hospitals, and other health care providers in Vermont provide very good care. Many are having increasing problems making ends meet due to a financing structure that is chaotic, unreliable, and largely unaccountable. Under Green Mountain Health, the goal will be to establish a financing system that ensures reasonable, reliable payments to health care professionals and that eliminates the cost shift between health services payors. Charges will be the same for everyone and will be sufficient to provide reasonable access to health services and sufficient payments to health care professionals. Global budgets will be established for hospitals, simplifying administration and providing reasonable and effective cost-control.
12. EVERYBODY PAYS, BUT THEY DON'T HAVE TO ENROLL?
Under Green Mountain Health, financing will largely be separated from providing care. With broad-based taxes, everyone will pay into the system based largely on their ability to pay. However, H.524 leaves open the possibility that people may not want to accept the services offered even if they are already paying for them. This might work like public and private schools.
13. WHY NOT COVER JUST THE UNINSURED?
The problem of the uninsured is serious, but it is a symptom of the much bigger health care cost problem. Efforts to deal with the uninsured in the past have provided only temporary relief. Right now, as there are conversations about how to reduce the number of uninsured, there are proposals to push people currently covered by VHAP into the uninsured category. The problem we face affects all Vermonters. Affordability is a real issue for everyone, whether they have insurance or not. There is a large and increasing number of people who are underinsured, with limited plans or very high deductibles. Employers are being forced to cut back on what they spend for employee health insurance benefits for their Vermont employees as costs skyrocket. Everyone is affected by this problem and a real solution needs to address the entire scope of this problem.
14. WILL GREEN MOUNTAIN HEALTH JUST BE A BIGGER MEDICAID?
No. Medicaid, by design, currently covers people with high health care costs (long-term care, people with disabilities, etc.). This is a little more than 15% of the Vermont population. With GMH, all Vermonters will be eligible for the same services under the same financing. With all of us in the same boat, the choices we make will be based on our collective values of fairness, equality, and frugality.