http://www.bishca.state.vt.us
Recent critical editorials about Vermont’s health reform plan are welcome. Perhaps they will spur the Vermonters affected, particularly small business owners and their employees, to take a closer look at the real opportunities available to them as we implement the federal and state health reform laws.Small business owners and their employees are the primary beneficiaries of premium subsidy provisions of the federal health reform law, the Affordable Care Act, known as the ACA. These benefits will be available to businesses and individuals purchasing insurance through the federally required health insurances exchange. Here are some examples:
- Tax credits of up to 35 percent of a small employer’s contribution to employees’ premiums between now and 2013 and of up to 50 percent of the contribution in 2014 and 2015.
- Free choice for small employers regarding whether or not to offer insurance to employees. No penalty if they decide to drop coverage.
- Tax credits for individuals and families who purchase insurance that will limit the impact of premiums. For a family of four earning $50,000 per year, monthly premium would be limited to $282, about one-half of what many families now pay. These credits will be available on a sliding scale to families earning up to $92,000 per year.
- Cost-sharing for families earning up to $57,636 per year to help pay for out-of-pocket expenses like deductibles and co-pays.
Some commentators have ignored these facts and focused on the ACA requirement that all states implement new insurance rules that reduce variation in rates. This requirement will eliminate a giant loophole in Vermont’s current law that allows certain businesses to band together to form “associations” and escape the normal insurance rate setting laws.
Our analysis of this change shows that it will level the health insurance rate playing field for Vermont small businesses and their employees. Leveling the playing field means that there will be a one-time adjustment producing some winners and some losers. This will happen in 2014, when the tax credit and premium subsidy provisions listed above kick in to soften the impact on those who have benefited for more than 20 years from Vermont’s “association” loophole.
We are not “proposing” this change, as some commentators have said. It is a requirement of federal law that everyone in the small group market be treated alike and that costs be spread fairly. And as already noted, this is a one-time change. Some small employers, even some of those in associations, have seen annual premium increases for several years in a row greater than the elimination of the so-called association exemption will cause. And some small employers will see premium decreases as a result of giving fair treatment to all.
All of these changes are part of a transition to a more cost-effective, less complicated and fairer system. And when health care reform is fully implemented, we are willing to be held accountable for its level of success.
But we do need the help of all Vermonters in explaining and striving to understand the long path toward changing a health care system that threatens to bankrupt our state. Creating a successful health insurance exchange that complies with federal law is an absolutely essential step on that journey. But it is only one step.
Gov. Shumlin has proposed additional reforms that will have a more dramatic effect in the future. He has proposed that health care coverage be fully divorced from employment, so that employers no longer have to worry about insurance details and all Vermonters know they will have coverage regardless of their employment or income status. He has proposed significant changes in health care payment and delivery so that we can contain health care cost growth. And he has proposed investments in improving the health of Vermonters so that we assure access to good primary and preventive care and avoid illness. The Green Mountain Care Board is working to implement these reforms.
