[T]he Vermont House gave preliminary approval Thursday to an omnibus health care package that raises $12 million supporters say will strengthen primary care and increase access to medical services. A final vote is scheduled for Friday.
The bill also sets out contingencies should new technology releases for Vermont Health Connect fail to improve its performance, and includes a range of policy initiatives aimed at furthering structural reforms to the state’s health care system.
Debate on the package lasted for more than four hours and grew heated at times, with lawmakers from both sides of the aisle — though mostly Republicans — calling for seven separate roll call votes.
Rep. Bill Lippert, D-Hinesburg, chairman of the House Health Care Committee, said Vermont has taken steps in recent years to address rising health care costs and expand access to medical services. Those efforts “have been controversial, some have been successful and some have foundered,” Lippert said, citing among the successes Vermont’s reduced uninsured rate (second lowest in the U.S.), state regulators’ role in reducing the growth in overall spending and savings, and improved patient outcomes through the Blueprint for Health managed care program.
But the state “still has much to do,” he said, and the bill under consideration prioritizes helping underinsured residents access medical services, primarily through increased Medicaid payments to primary care providers and increased subsidies to reduce the out-of-pocket costs of exchange coverage for middle- and low-income Vermonters.
The $12 million is raised by expanding the sales tax to include candy and soda, a measure opposed by Gov. Peter Shumlin. It also includes an expansion of the meals tax to vending machine food and drink, increases the cigarette tax by 33 cents over two years, and applies a similar increase to the “floor stock tax” on other tobacco products such as snuff and snus.
Republicans decried the additional tax increases beyond the roughly $35 million in new taxes already in the House-passed budget, but praised the VHC contingency measures. A roll call vote on the amendment containing the tax hike passed 78-62, while a roll call vote on the amendment with the contingencies passed 139-1.
“When do all the taxes stop? Most Vermonters are taxed to the max — I vote no,” said Rep. Ronald Hubert, R-Milton.
A few minutes later, after the roll call vote containing the exchange contingencies, Minority Leader Don Turner, R-Milton, said, “This action is long overdue. It’s time the Legislature recognized that the exchange may never work as intended.”
The VHC contingencies require the administration to make regular reports to the Legislature while it’s out of session.
The legislation also sets milestones and deadlines for the exchange’s performance, as well as a timeline for transitioning to a version of the federal exchange by the fall of 2016 should the benchmarks not be met.
Rep. Paul Dame, R-Essex, asked that the bill be split into sections so that the taxing and spending provisions could be voted on separately from the policy provisions relating to the exchange.
“Let’s be clear about what we’re doing here,” said an irate Lippert, before the vote on the spending provisions, “We would be taking apart the primary care system of Vermont.”
Lippert pointed out that portions of the spending restore cuts made in the House-passed budget, while others restore cuts made in January at the federal level.
Rep. Cynthia Browning, D-Arlington, said she agrees that the spending supports worthwhile initiatives, but called it a “false promise” to Vermonters. That’s because the tax revenue isn’t expected to cover spending in the package within three years, according to figures from the legislative Joint Fiscal Office. To maintain the increases in the bill would require raising taxes again in coming years, she said.
The spending was retained on a vote of 82-57. The bill in its entirety received preliminary approval by the same result.
Several other amendments were also defeated, including efforts to allow individuals to buy health insurance outside the exchange, and substitute the sales tax expansion with an increase in the employer assessment — a per employee tax on businesses that don’t offer health care. Another amendment, offered by Rep. Mary Morrissey, R-Bennington, to “hold Medicare harmless” from future health care reforms was defeated as well.
Representatives plan to offer additional amendments to tax e-cigarettes, rolling papers and other tobacco accessories, among others before the final vote.
The largest area of spending is $5.86 million to increase subsidies to lower out-of-pocket costs, such as copays, coinsurance or deductibles. Middle- and low-income people are better able to keep up with premium payments, but those with high medical costs find it difficult or even impossible to afford the out-of-pocket costs, Lippert said, complicating their access to services.
The subsidy increase restores cuts to those subsidies in the House-passed budget and increases them by another $4.26 million. The out-of-pocket subsidies are not part of the ACA, and therefore not eligible for a federal match.
The omnibus bill also puts $3.5 million toward increasing state Medicaid reimbursement rates for primary care doctors, which would receive a federal match of $3.7 million.
Low Medicaid reimbursement rates for primary care services are making it difficult for health care providers to take Medicaid patients, which makes it hard for beneficiaries to access care, lawmakers said. That’s been exacerbated by tens of thousands of new beneficiaries entering the program as a result of the Affordable Care Act, and primary care providers losing a federal Medicaid bump after a provision in the Affordable Care Act sunsetted in January.
The package would also spend $1.9 million to increase payments in the Blueprint for Health managed care program, which would receive a $2.2 million federal match. Participating providers have not seen a pay increase since 2008.
The House used a Senate bill, S.139, as the vehicle for its health care package, and the underlying bill contains provisions in the underlying Senate bill that provide greater regulation of pharmacy benefit management companies, and requires hospitals to notify patients who are placed on observation status about whether Medicare covers the service — a practice that has resulted in unexpected costs for beneficiaries.
House lawmakers added additional policy items to S.139, including provisions that would allow VHC customers not receiving subsidies to enroll in health plans directly through the participating carriers. The VHC contingency language provides for greater legislative oversight and performance standards, and sets deadlines and a process for transitioning to a version of the federal exchange should VHC continue to struggle.
For more detail, a section-by-section breakdown of the bill can be found here.
