Vermont Governor Hails Healthcare Ruling, Pushes Bigger Plan

July 2, 2012

Vermont’s push for universal, publicly funded, single-payer health care is going ahead no matter what, Gov. Peter Shumlin said, but he hailed the U.S. Supreme Court decision upholding the federal Affordable Care Act as a big boost for the state’s efforts.

Vermont Gov. Peter Shumlin
Shumlin described last Thursday as “a great day for Vermonters and a great day for Americans.” But, he added, “I would say that of all the states of the Union, the least to be impacted by the Affordable Care Act is probably the state of Vermont.”

That’s because Vermont’s health care overhaul, which legislation passed last year says will be implemented by 2017, goes well beyond the federal law, in the direction of a Canadian-style public system.

The biggest impact from the federal law will be money: an estimated $400 million a year in tax credits to help people with low and moderate incomes buy health insurance. That’s expected to provide a partial answer to a big and still unanswered question: how Vermont will pay for its new health care system.

The federal government also is expected to provide the state hundreds of millions more to help it set up new computer networks to manage patient information. That’s widely seen as needed to control cost through increased efficiency. The state on Friday will submit an application for a federal grant of up to $118 million, mostly for information technology and the personnel to set it up, said Robin Lunge, Shumlin’s director of health care reform.

But those sums are just a fraction of the roughly $5 billion a year Vermont spends on health care. Critics of the health program backed by Shumlin and his fellow Democrats who control the Legislature complain that a plan has yet to be devised for how it will be paid for. The 2011 law calls for the administration to recommend a financing mechanism when lawmakers return for a new session next January.

Shumlin argues, and did so again last Thursday, that Vermont is spending the money now; he just wants to change how that happens. He especially wants to remove the expectation that employers pay for their workers’ health coverage, saying that will be a boon to job creation.

Vermont is fully on board with the federal law’s call for setting up a regulated health insurance marketplace, called an exchange, where consumers will be able to shop for price and compare coverage offered by various types of health insurance beginning in January 2014.

But the state’s 2011 law calls for the exchange to be just a steppingstone toward the goal of having all Vermont residents covered by a public health insurance program, with just one entity — a single payer — sending money to doctors, hospitals and other providers.

Another key to Vermont’s project is cost controls. The state wants to move away from the traditional “fee-for-service” model of paying for health care, in which the more of a procedure a health professional performs, the more he or she gets paid. Instead, various types of “global budget” are being considered, in which hospitals and medical practices would be paid a set amount for caring for a given populations, likely with bonuses for keeping people healthier.

State officials and Vermont’s three-person congressional delegation in Washington have been pushing legislation that would move up the date in the Affordable Care Act when states can get waivers from some of its requirements, from 2017 to 2014. Vermont would use such a waiver — essentially a you-don’t-have-to allowance — to move from the exchange to a single-payer system.

Lunge said a key to getting a waiver under the federal law is ensuring that whatever replaces the exchange results in at least as high a percentage of the population having health insurance.

Shumlin said last week that now that the federal law has been upheld, he may have some new allies pushing Congress for waivers among conservative governors likely to have their own reasons to seek outs from some parts of the federal law.

“This decision probably gives us allies in our quest, in our plea for flexibility in Vermont among Tea Party governors (who) are going to want flexibility for different reasons,” Shumlin said.

As for the individual mandate, the much-discussed requirement in the federal law that every American must have health insurance or pay a penalty, that won’t be an issue in Vermont, Shumlin said.

“We’ll be the first state in the country where health care is a right and not a privilege and where you get health insurance because of your residency, not because of a mandate,” he said.

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