A health care bill, sausage, and sugar
There’s the old saying about law-making and sausage-making and, there was a little of that going on in the House Health Care Committee (HHCC) as we passed H.481. I raise that old saying acknowledging two of my great dietary weaknesses: I love sausage (hot Italian, kielbasa, chorizo, bacon hot dogs, andouille)...and I have a massive sweet tooth.
H.481 is the HHCC’s major effort on health care reform this year. The headline overview of the bill: it addresses the Medicaid cost shift, provides additional assistance to under-insured Vermonters, allocates additional resources to support primary care providers and the Blueprint for Health, and increases the funding for and responsibilities of the Green Mountain Care Board. Regarding these health care policy initiatives, the bill is a major work that I strongly support.
Here’s some detail on the major provisions of H.481:
Medicaid cost shift: This bill provides funding (every VT dollar invested is matched with $1.10 of federal funding) to reduce the Medicaid cost shift. By increasing reimbursement rates to health care providers serving Medicaid patients, we reduce the cost pressure on the 54% of Vermonters who purchase their health insurance privately. We also enhance access to the health care system for Medicaid patients.
Helping the under-insured: While the Affordable Care Act has gotten more people health insurance (VT’s uninsured rate is the second lowest in the nation declining from 7.6% in ’09 to 3.7% in ’14), many of the newly insured have plans that are unaffordable because of high deductibles, co-pays, and out-of-pocket maximums. (Think of the family making $50,000 that annually has to come up with a $3,800 deductible before receiving benefits.) H.481 increases the cost-sharing subsidies for Vermonters at 200%-300% of the federal poverty level (family of 4=$48,500 to $72,750 of income) reducing deductibles from over $3,000 to $1,200 and cutting the out-of-pocket maximums from over $6,000 to $2,500.
Strengthening the Blueprint for Health (B4H): B4H organizes health care resources at the community level to coordinate services for patients. The focus is on primary care and preventative medicine. B4H moves VT from reactive to proactive health care. It is proven to save money and improve outcomes. H.481 increases B4H state funding supplemented by $1.22 in federal match for every VT dollar.
Strengthening the work of the Green Mountain Care Board: The GMCB has proven to be effective at managing costs (see pg. 3) in VT’s hospital system. Funding in H.481 allows the GMCB to establish rate setting protocols that address the Medicaid cost shift and to pursue an All-Payer model (a system whereby providers are paid to support improved outcomes instead of quantity of care) in Vermont.
Focus on primary care: H.481 targets primary care providers for increased resources in VT’s health care system. Primary care providers are the most cost-effective health care resource. H.481 takes advantage of 10:1 federal match dollars in funding Health Homes; provides educational loan forgiveness to encourage primary care doctors to practice in VT; and funds a study on providing state-funded universal primary care in VT.
In addition to the health care policy in this bill, the HHCC also made recommendations in H.481 as to how this policy should be paid for. (I say “recommendations” because ultimately it’s the Ways & Means Committee that decides tax policy, and Jim’s committee will have a big say regarding H.481’s funding mechanisms.) While I was very pleased with the health care policy in H.481, the tax provisions the HHCC adopted have left some margin for improvement as the Ways & Means Committee gets involved.
Tax proposals embedded in H.481:
Repeal of the Employer Assessment: The Employer Assessment to pay for the Catamount Health system was first assessed in 2006 on VT employers who did not provide health insurance to their employees. The concept was that if an employer isn’t paying for an employee’s health insurance, someone else (a spouse’s employer, a hospital emergency room, VT Medicaid, etc.) is bearing that cost. While Catamount Health no longer exists, this assessment continues to be paid by non-insurance providing employers into Vermont’s Health Care Resources Fund. While the Employer Assessment is not great tax policy because it’s cumbersome for employers to track and pay and it’s complex for the state to manage, in the pre-universal care world in which we live where health insurance is tied to employment, I approve of the concept where non-insurance providing employers pay extra. The HHCC saw otherwise.
0.3% Payroll Tax: This is a reduction from the governor’s original 0.7% proposal and would be levied on all employers based on their payroll.
$0.02/oz. sugar-sweetened beverage excise tax (SSBT): Sugar is a major contributing factor to the increased prevalence of obesity and type-2 diabetes and the increased consumption of sugar-sweetened beverages is one of the most pernicious vehicles for sugar consumption. The SSBT will be an excise tax paid by licensed distributors as they sell their products to retailers. The hope is that it will force retailers to raise the price for a can of Coke. I am not a fan of the SSBT that was passed as part of H.481. While I believe tax policy can be an effective part of a comprehensive effort to drive down sugar intake, this is an excise tax masquerading as a regressive consumption tax masquerading as health care policy.
Personally, I would prefer to leave the Employer Assessment in place, leave the SSBT for a more comprehensive look at the sugar consumption issue, and instead implement a 0.4% payroll tax. Where things stand, H.481 promotes very good health care policy supported by tax proposals that are flawed. Aren’t we all. I love sausage and I battle my sweet tooth…and I support H.481.