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The New Health Reform Wave II: Vermont Version Includes $365 Employer Assessment

The New Health Reform Wave II: Vermont Version Includes $365 Employer Assessment

May 14, 2006

Yesterday, we posted about state activitists who are finding new opportunities to promote access reform in wake of the national attention generated by MA health reform. Here's a state that's done it -- Vermont. See AP story below:

A historic health reform bill offering insurance coverage to thousands of uninsured Vermonters will soon be on the governor's desk awaiting his promised signature. In a 25-2 vote, senators gave quick approval Wednesday to a last-minute change in the health reform package. This change, which the House approved just before midnight Tuesday, broke a deadlock that had threatened to derail the health care bill.

The health reform bill includes provisions that establish Catamount Health, which insurance companies will offer to uninsured Vermonters. The five-page document, which senators rushed from introduction to passage in minutes Wednesday morning, contained a compromise between Gov. Jim Douglas and legislative leaders worked out Tuesday night that assured passage. Douglas had been insisting that private insurance companies offer Catamount Health. Lawmakers wanted a fall-back plan should insurance companies balk at offering the coverage plan outlined in the bill. The two sides found a way to break their stalemate Tuesday when lawmakers accepted the administration's suggestion that state regulators could be authorized to require private insurers to offer Catamount Health if they failed to offer it voluntarily. Lawmakers also agreed to give the private market a two-year trial.

Under the bill, about 30,000 uninsured Vermonters will gain access to health coverage and care. A host of other provisions are expected to ease the financial pressures that have forced insurance companies to raise the price on the health insurance for 90 percent of Vermonters. "It is an extraordinary achievement for our state," Senate President Peter Welch, D-Windsor, said of the bill. Highlights of the bill include:

CATAMOUNT HEALTH: Vermonters without health insurance who don't qualify for other state health programs such as Medicaid will be able to sign up for Catamount Health. Participants will pay monthly premiums based on income. Higher income participants, such as a family of four with income of $65,000, wouldn't receive any state subsidy toward the cost of the premium.

EMPLOYER ASSESSMENT: Employers who don't offer health insurance to all their workers would pay an assessment to help cover the cost of Catamount Health. Employers would pay if they offered no insurance, if they offered coverage to some, but not all workers and if they offered plans and some workers didn't enroll and were uninsured. The fee would be $365 per year for each full-time equivalent slot. For the first two years, eight full-time equivalent slots would be excluded from the assessment calculation. The exclusion decreases to six and then four by the fourth year.

CHRONIC CARE: State health care programs and Catamount Health won't require patients with chronic diseases to share the expenses for doctor visits, treatments and tests critical to the prevention of crippling complications. Primary care doctors will be paid extra to coordinate the care for patients with chronic conditions. The bill supports the Department of Health's ongoing effort to extend chronic disease management to all Vermonters.

COST CONTROL: Catamount Health will result in less charity care by doctors and hospitals. Increases in Medicaid payments to hospitals also will reduce the shift of costs onto private insurers. These changes will reduce pressures for premium increases, providing savings to businesses and individuals with private insurance.

Long time readers of this blog will recall that in April 2005 the Vermont House passed first steps toward a single payer. Compromise with the Senate led to a 1-3% payroll assessment on non-offering employers. That bill was vetoed by Gov. Douglas and the veto was not overridden.

Big state/small state -- this is tough political sledding. But take a look -- in 2006, three states now (Maryland, Massachusetts, Vermont) have passed laws to begin holding employers accountable for not covering their workers. Vermont's requirements go further than MA's or MD's. Good for the Green Mountain State!

Let's keep this wave rolling...