Vermont approves universal health program

The measure adopted by the Legislature and supported by the governor would establish a single-payer-type plan, although some private insurers would stay.

By Doug Trapp — Posted May 16, 2011

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Vermont Gov. Peter Shumlin has pledged to sign a bill that paves the way for the state to launch a health system approaching a single-payer model later in the decade and to create a state health insurance exchange within the next several years.

The measure creates a powerful five-member Green Mountain Care Board, members of which will determine the benefits and craft a funding plan for Green Mountain Care, a state universal health plan. The board would have wide authority over state health spending and health system reform. The bill requires the governor to nominate Green Mountain board members by Oct. 1 and the Vermont Senate to confirm them.

The measure will set up a health insurance exchange in which Vermonters will shop for private health plans and enroll in public coverage. The exchange is to begin enrolling residents in November 2013 and be fully operational by January 2014. The bill calls for at least two private health insurance plans to participate in the exchange.

The Democratic-controlled Vermont Legislature approved the bill along party lines, with the state Senate voting 21-9 to pass it on May 3 and the House adopting it on May 5 with a 94-49 vote. Shumlin scheduled a bill-signing ceremony for May 26.

He had pledged to enact a single-payer health system during his Jan. 6 inaugural address. "Let Vermont be the first state in the nation to treat health care as a right and not a privilege."

Reaction to the bill

Many health care stakeholders are taking a wait-and-see approach to Green Mountain Care, which might not be implemented fully until 2017 -- or ever, if it is projected to cost as much or more than the state's existing health system, said Vermont Rep. Mark Larson, the bill's sponsor. But Larson is optimistic that the plan will produce the necessary savings to proceed.

The measure's lack of specificity created anxiety among health insurers, businesses and others in the state, said Leigh Tofferi, director of government, public and community relations for Blue Cross Blue Shield of Vermont, the state's largest health plan. The nonprofit insurer supports the state's efforts on payment and delivery system reforms and the creation of the insurance exchange, which could produce savings for the system.

But the measure does not lay out the financing plan and minimum benefits for Green Mountain Care, nor does it establish what would happen to existing health insurance and coverage. Those decisions are up to the Green Mountain Care Board. "We will weigh in on those other issues as they become more specific next year and the year after," Tofferi said.

The measure requires the Green Mountain plan to pay enough to attract and retain high-quality health care professionals, said Vermont Sen. Kevin Mullin, the lone Republican to vote for the bill. He offered this and other changes that made it into the final bill, including a mandate that the plan's funding be sustainable. Tofferi credited Mullin with improving the bill's specificity.

The Vermont Medical Society did not take a position on the bill and has no policy on single-payer health care, said VMS Executive Vice President Paul Harrington. He expects the Legislature to adopt legislation related to the health reform bill in each of the next several years.

Larson predicted a similar outcome. "There's much more work to be done in moving forward with the plan than not," he said.

Not quite single-payer

The measure requires the Green Mountain Care Board to examine and attempt to limit the growth of state health care spending, begin pilot payment reforms, and continue to implement a previously enacted patient-centered medical home program.

The board would implement Green Mountain Care. All Vermonters would be eligible for the plan, which would cover hospital services and prescription drugs.

But Green Mountain Care cannot launch until three conditions are met. The Vermont Legislature must approve a board-proposed three-year budget for the plan -- one that costs less than the state's existing health system. The board also must define the plan's benefits. Finally, Vermont needs the U.S. Health and Human Services Dept.'s permission to use health insurance exchange subsidies in the federal health reform law to support Green Mountain Care beginning in 2017. Waivers would be required to incorporate Medicaid, Medicare and other federal health funds.

Despite Shumlin's statements on his inaugural promise, the bill does not meet the strict definition of a single-payer plan, in which the government is the sole third-party payer for health care. "But it is as close as we can get at the state level," said bill sponsor Larson.

The measure would allow private health plans to continue in the state indefinitely. "You give up a significant part of the administrative savings by doing that," said David Himmelstein, MD, founder of Physicians for a National Health Program. The organization, based in Chicago, advocates for a single-payer health system.

A true single-payer plan should have separate operating and capital budgets, Dr. Himmelstein said. It should require a single insurance fund to pay all claims, he said.

Self-insured businesses such as IBM -- the state's largest employer -- could continue to offer private health coverage to employees. But businesses likely will be required to contribute to Green Mountain Care's funding, possibly through a payroll tax.

Although the bill goes further toward single-payer than all other states and the national health reform law, it won't solve Vermont's health care problems, Dr. Himmelstein said. "Maybe it lays the foundation."

Larson said no one else proposed a bill that could deliver the quality improvements and savings possible through his measure.

Mullin, the Republican senator, said he doesn't care if the state enacts a single-payer or a multipayer system, as long as it works. "If they can prove that single-payer is going to work, God bless them," he said.

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Step 1 to single-payer

Vermont lawmakers OK'd a bill that would pave the way for a single-payer-type health care system in the state. The measure approved by the Legislature has three major parts:

  • The Green Mountain Care Board, a five-member panel appointed by the governor with Senate confirmation. The board would design the state's universal coverage plan, develop state health care budgets, and carry out health cost containment and payment reform.
  • The Vermont Health Benefit Exchange, a state marketplace for health insurance as called for under the national health system reform law. The exchange would start operating by 2014 and could become the main source of health coverage in Vermont by 2017.
  • Green Mountain Care, the state's universal coverage plan, which could launch by 2017. The state would need federal approval to use federal health funds to help finance the plan. The state is expected to adopt payroll or income taxes to help pay for the plan.

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