Vermont adds bronze plan

Vt. would allow 'bronze plan' to encourage health
February 6, 2012

Vermont Gov. Peter Shumlin and legislative leaders said Monday they wanted to make it possible for more of the state's small businesses to offer lower premium health insurance plans sometimes known as "bronze plans" until the state can implement its single payer health care system.

Speaking Monday in Montpelier, Shumlin and leaders from the House and Senate, all Democrats, said they would also allow businesses with more than 50 employees to remain outside the federally-mandated health care exchange until 2016.

"This was a hard decision, a very hard decision because there are people who will not have the opportunity to get into that market and they'll have to wait two years and their employees will have to wait two years as well," (House Speaker Shap Smith) said.


By Don McCanne, MD

Vermont is providing us with very important lessons on just how difficult it is to set up a single payer program on a state level. The legislation that passed - hailed as the first single payer system in the United States - is primarily an enactment of a state health insurance exchange as called for in the Affordable Care Act, along with future proposals that are not much more than a wish list at this point.

When they enacted the insurance exchange, they deliberately eliminated the bronze plan since it has an actuarial value of only 60 percent, which would leave 40 percent of covered health care costs to be paid by the patient out-of-pocket, minus income-related subsidies which are inadequate to prevent financial hardship for many of those with health care needs. They wanted better coverage than that.

The problem they faced was that the premiums for the silver and gold plans (70 and 80 percent actuarial values) would be too expensive for many individuals and small businesses in Vermont, thus the trade off of lower premiums for spartan plans.

What doesn't appear in this article is that these high-deductible bronze plans are very profitable for insurers, and they certainly would want to maintain and grow this sector of their market. It is likely that the insurers' message to the governor and the legislature was that they couldn't provide silver and gold plans at the level of premium that many businesses could afford, and the insurers likely didn't need to resort to threats of withdrawing from markets. (BlueCross BlueShield of Vermont is the dominant insurer and can write its own ticket, and, though a nonprofit, it still depends on profits.)

The governor and the legislature are to be commended for doing their very best to try to bring a single payer system to Vermont, though they are finding many of the barriers to be insurmountable. While they are patching together what they can, they should join our growing movement demanding that Congress enact a national single payer program. That would solve the health care financing problems for all states.