Universal health care bill in Vermont passes, 89-47

By Anne Galloway, March 24, 2011
You can call it Frank. You can call it Fred. But don’t call it a single-payer health care system. That was the message Rep. Mark Larson, D-Burlington, delivered to lawmakers in the House Appropriations Committee last week and during the House floor debate on Vermont’s latest effort to reform its health care system. The euphemism single-payer was struck from the bill in an amendment to make the legislation more palatable to Republicans, sources say. The bill passed 89-47 after eight hours of debate, speeches, amendments and roll call votes. The legislation now goes to the state Senate.
The actual, rather unsexy moniker? “A Road Map to a Universal and Unified Health System,” or Green Mountain Care, for short.
Larson said “fewer-payer” would be more accurate. That’s because the state’s single payment system (in theory administered by a sole entity) will always have at least a few “payers.” In addition to Green Mountain Care, other payers would include Medicare and Medicaid, large self-insured companies like IBM and supplemental insurance (likely for teachers and state and municipal employees who have “Cadillac” plans).
Whatever you call it, passage of H.202 pushes the state toward a single-payer health care reform construct, and the goals set out in the “road map” are audacious: All Vermont residents would be eligible to receive an “essential” health benefit package; health insurance companies would be effectively cut out of the game and relegated to a peripheral role in the new system; and cost containment measures would be designed to push the system toward fiscal sustainability. All this would be accomplished under an ambitious, three-year timeline.
Though government-controlled health care payment systems are commonplace in most countries in the developed world, no other local or state government entity in the United States has come as close to implementing a universal health care system for all of its residents. Vermont would be the first state to achieve what has been impossible elsewhere – including President Barack Obama’s much-compromised attempt to reform the national system — if the state can negotiate the push and pull of special interests, namely single-payer activists and a host of medical professionals and facilities that stand to win or lose — whatever is proposed.
The Legislature has outlined a new “road map,” but it isn’t the first time lawmakers have gone down a garden path toward the dream of creating a fully fledged universal coverage plan. Two previous health care reform efforts that achieved partial gains nudged Vermont closer to the goal. In 1992, Gov. Howard Dean and the Legislature launched the successful Dr. Dynasaur program, a Medicaid-subsidized health care plan for children under the age of 18 whose families financially qualify. Just five years ago, the Legislature and Gov. Jim Douglas enacted Catamount Health, a Medicaid-subsidized program for uninsured Vermonters. Despite this last effort to extend coverage to uninsured Vermonters, 47,000 residents are currently without health insurance, and 160,000 are underinsured and find it difficult to pay for health care costs as out-of-pocket expenses and deductibles rise.
With H.202 and the Hsiao report in hand, the third time might be the charm. This go-round Gov. Peter Shumlin, a Democrat, has made health care reform his signature initiative and his Democratic compatriots in the Statehouse are determined to make it so. The effort builds on the work of economist William Hsiao’s initial research for the design of a “single-payer” health care system.
Republicans opposed the bill because they say they can’t support sweeping reform without knowing how much the system will cost or who will pay for it.
Hsiao proposed a 14.5 percent payroll tax, and also suggested that an income tax could also be an option. The House Health Care Committee decided the “details” are beyond the Legislature’s purview for the time being. The board and a team of eight researchers from the Department of Banking, Insurance, Securities and Health Care Administration will devise the system; lawmakers will be responsible for approving a financing plan (2013), a budget (2014) and plans for implementation of the system (2012).
If the legislation is enacted as is, (the Senate is taking testimony on the bill Thursday night), it will set a few parameters in place for the formation of the Green Mountain Care board and implementation of the health care exchanges under the federal Affordable Care Act. In addition, the bill sets the stage for Green Mountain Care, the single payment system. H.202 hands over the biggest decisions – the benefit packages for consumers, reimbursement rates for doctors and hospitals and how the cost containment and payment reform systems will work – over to the five-member professional board.
Debate on the floor
Rep. Mark Larson, chair of the House Health Care Committee, introduced the bill and was subsequently queried by lawmakers for about 5 hours. Larson, D-Burlington, was unflappable. He didn’t lose his cool, even after about three hours of steady grilling from Rep. Tom Koch, D-Barre Town, who used an amendment proposed by Rep. Cynthia Brown, a Democrat, as an opportunity to flay open the underlying bill.
Larson began with a preamble that explained the rationale for reform. “Our current system is broken; it’s too costly; and there is no mechanism for cost control,” Larson said. The state is spending $4 billion a year on health care now; he said that total will likely grow by a third, or by $2 billion over the next two years. “We have a system that has demonstrated that despite all of our efforts cannot control the cost of health care,” Larson said.
The system, he said, is also unfair and inequitable. Constituents say the premiums they pay for health insurance are comparable to a tax, except that some people pay and others don’t, and yet everyone benefits.
“At a time where Vermonters are increasingly seeing the cost of copays going up and the amount of coverage going down, we can’t afford to spend money on things that don’t add value to our health care system,” Larson said.
The second amendment, proposed by Rep. Linda Waite-Simpson, D-Essex Town, passed on a voice vote. The amendment will require the state to hold a public hearing and an economic study regarding how Green Mountain Care would affect for self-insured employers, including IBM which is in Waite-Simpson’s hometown.
Browning’s amendment would have confined H.202 to the formation of the board and the exchanges and would have stopped short of allowing the state to move forward with the laying the foundation for the single payment, universal Green Mountain Care plan.
“We need more detail,” Browning said. “I don’t think we’re ready for this commitment. The other problem I have with it is the level of uncertainty it creates, which is the worst thing for economic activity and the worst thing for business.”
Rep. Tom Koch used the amendment as an opportunity to conduct a courtroom-like cross-examination of Larson. With a laser-like focus, Koch methodically deconstructed the 92-page bill section by section, raising questions about how the plan would affect self-insured employers; how the bill would contain costs under a per capita reimbursement system; whether the system would limit care to patients in order to contain costs; how the plan would monitor health care quality and whether the legislation would provide adequate reinsurance in the event of catastrophic medical claims.
“Is not one of problems with capitated payments is the economic incentive for providers to do less for patients?” Koch interrogated.
Larson replied: “That’s true if you don’t monitor the quality.” He said Green Mountain Care would include safeguards to prevent providers from underserving people under capitated payment system.
Koch also pointed out a sole reference to “single-payer” and then proceeded to use a Gertrude Stein style a rose is a rose is a rose line of questioning to highlight what was already spelled out in the legislation – that is, passage of H.202 means that most Vermonters, not already covered by Medicare or a large self-insured employer, would, in 2014, shift toward one health care administration system. He pointed out that the objective of the bill is to eliminate insurance competition.
Koch and other Republicans also argued that including self-insured companies in the Green Mountain Care system would be unconstitutional; Larson said the state would not seek an ERISA waiver, and said such waivers are not possible to obtain. Businesses, he said, would continue to function as they do now.
Nevertheless, an amendment from Rep. Heidi Scheuerman, R-Stowe, and Rep. Oliver Olsen, R-Jamaica, proposed that the state exclude self-insured companies from the Green Mountain Care system.
Scheuerman said under the proposal, self-insured companies would pay double – they would pay insurance premiums and potentially a payroll tax, as suggested by Hsiao’s report. Scheuerman said a number of large, self-insured companies could be affected, and she rattled off a list: GW Plastics, General Electric, General Dynamics, Pizagalli Construction, Plasan, King Arthur Flour, Cabot Creamery, CVPS, among others.
Scheuerman said while the state may not require participation in a single-payer plan, companies would likely be forced to pay into the plan. “There is a lot of uncertainty in this bill, and the angst is palpable for businesses in this state,” Scheuerman said. “This is one piece of certainty if we take this off the table to say this would be one thing we wouldn’t do. At least take this off the table and don’t force companies to pay.”