[T]he House Health Care Committee on Tuesday endorsed a more modest $20 million spending package for health care reform that falls within spending limits set by the Speaker of the House.
At the same time, the House Ways and Means committee narrowed the options it is considering to raise the tax money that will pay for the package. Those options would bring in between $21.5 million and $27.7 million in a full year and rely on various combinations of sales or excise taxes levied on candy, soda, cigarettes or dietary supplements.
The pared-down spending package is a far cry from the $90 million proposal Gov. Peter Shumlin pitched at the start of the session, and less than half of what’s included in H.481, the bill House Health Care passed two weeks ago. Many of the same initiatives are still funded but at greatly reduced levels.
A $20 million health care package won’t help Vermont make “real progress” on its health care challenges, Shumlin said in a recent interview with the Vermont Press Bureau, adding that House lawmakers would be leaving more than $100 million in federal Medicaid match on the table by forgoing his proposal.
The governor’s proposal stalled in the House largely because members of the Ways and Means Committee weren’t interested in creating a payroll tax. That’s also become a sticking point for H.481, which relies on a smaller payroll tax paired with an excise tax on sugar-sweetened beverages.
Much of the money in both the governor’s proposal and H.481 would go toward reducing the Medicaid cost shift, whereby that government program reimburses well below providers’ costs, causing them to charge private insurers more. The governor has said the 0.7 percent payroll tax in his proposal would be offset by a 5 percent reduction in the growth of private premiums. The 0.3 percent payroll tax in H.481 was expected to reduce premium growth by 2.34 percent, according to administration officials.
It’s unclear what impact the $20 million package would have on private premiums, as even with federal match it puts only $14.6 million toward raising Medicaid rates for doctors and hospitals.
Top administration officials were reluctant to take a firm position on the reduced health care package Tuesday, because the taxes to pay for it aren’t settled. Lawrence Miller, chief of Health Care Reform, said the initiatives it supports are worthwhile, but are no longer prioritized the way they were in the governor’s proposal.
“What they’re talking about today has significant structural differences to what they were talking about last week, and it’s no longer proportionate and consistent to the governor’s [proposal],” he said.
House Speaker Rep. Shap Smith, D-Morristown, said Tuesday “the well was poisoned” for the governor’s proposal because lawmakers believed it spent too heavily on initiatives unrelated to the Medicaid cost shift, and were not confident that his plan would reduce the growth in private premiums. When he looked at the initiatives in H.481, he felt they could be reasonably advanced with $20 million in new revenue, Smith said.
Rep. Bill Lippert, D-Hinesburg, Health Care Committee chairman, said the new proposal his committee endorsed supports their goals of increasing people’s access to health care and strengthening the primary care system. His committee approved the new package 7-3, with three Republicans opposed and Rep. Paul Poirier, I-Barre, not present.
Ways and Means delayed a vote on the taxes to support the package because two members, both Democrats, were absent. The package will need to pass the Appropriations Committee as well before it can go before the full House.
Shumlin’s best hope to resurrect his payroll tax-driven Medicaid cost shift proposal — at any level — will likely be when the bill reaches the Senate.
The documents posted below show the funding changes from H.481 to the new package the Health Care Committee endorsed Tuesday.
