Vermont Leaders Reach Compromise on Health Insurance Package

By Ross Sneyd | May 11, 2006

As many as 25,000 people in Vermont who have no health insurance will be able to get it under a compromise health care reform package reached among Gov. Jim Douglas and legislative leaders.

The bill envisions extending insurance coverage to as much as 96 percent of the population by 2010. Currently, slightly less than 90 percent of Vermonters have health coverage.

“This gets health insurance into the hands of Vermonters who don’t have it,” said House Speaker Gaye Symington. “It isn’t just insurance. It’s quality insurance. And it’s health care, not just insurance.”

Douglas highlighted how much he and lawmakers have had to compromise to find consensus.

“We have succeeded in forming an alliance of ideas fashioned around our common commitment to making health care affordable and accessible for every Vermonter,” the governor said.

Hours after the compromise was reached, the House passed the overall reform initiative 88-54.

The bill calls for the creation of Catamount Health, a new insurance plan that will be sold by private companies but will be subsidized by state government for those who can’t afford it. It will be funded by increases in the cigarette tax and a new $365-per-employee annual fee that would be imposed on businesses that do not provide their workers with insurance.

“These are extraordinary achievements,” Senate President Pro Tem Peter Welch said at an unusual joint announcement by the governor and legislative leaders in the governor’s office. “We’re all in it together. Everybody should have health care and everybody should help pay.”

Catamount Health is due to begin Oct. 1, 2007.

Advocates believe that Catamount Health will go farther than the much-heralded health reform initiative that was approved in Massachusetts earlier this spring. That’s because the plan also includes a “chronic care initiative” that’s designed to provide better coordinated care to people with such chronic conditions as diabetes, heart disease or cancer. New initiatives, including reimbursement systems for health care professionals, embedded into the law are supposed to make it easier for doctors to oversee care for those with chronic conditions and head off more serious complications.

It’s designed “so we pay for the blood work and not the amputation,” said House Health Care Committee Chairman John Tracy, D-Burlington.

There was no sense of euphoria among the Legislature’s majority Democrats for reaching consensus on what has been their top priority since the 2004 elections. That’s because to strike a deal with the governor, they had to accept his insistence that the new health insurance program would be something sold by private insurance companies. That means the private insurers also would bear the risk, instead of the state treasury.

Still, Democrats held out for a fallback position. Insurance companies selling policies to individuals could be required to sell Catamount Health. If, after two years the Health Care Reform Commission determines that the private Catamount Health policies were not working, the entire system would become a public program administered by a private company.

That had been the sticking point for weeks. It led Douglas to promise a veto of the bill late last week because he feared it would be the first step toward government-run health care, something he termed “son of Medicaid,” a reference to the mounting deficits facing the publicly run health program for the poor and disabled. He vetoed the Democrats’ first attempt at health care reform last year for that reason.

Douglas credited Symington with helping to broker the agreement that was sealed over a series of negotiations throughout the morning and early afternoon.

Symington and Douglas met personally on Monday in one last bid for compromise.

“The biggest challenge we had … was finding common ground for what were common commitments,” said Senate President Pro Tem Peter Welch.

Besides creating a new program to cover the uninsured, the bill also would institutionalize the governor’s chronic care initiative.

The theory is if people with chronic diseases are kept healthier and therefore need less significant medical care, the overall cost of health care will grow more slowly. That’s because care for chronic conditions consumes an estimated 75 percent of all health care spending.

Lawmakers said they also believed the bill would hold down the overall increases in health care because it would provide insurance to those who don’t have it but who still need care. People with private insurance pay 144 percent of the true costs of their medical care. Those without insurance pay 13 percent of true costs.

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