An insurance executive and a trade association official who sells insurance packages told the House Health Care Committee on Tuesday to go slow on plans for a single-payer health care system.
The committee listened to their testimony as part of their review of H.202, proposed legislation that would radically alter the state’s existing medical nexus and move it toward a universal health care system.
Download McKeown’s testimony for Business Resource Service
Kevin Goddard, vice president for external affairs at Blue Cross Blue Shield of Vermont, said lawmakers ought to “start small and not look to include so many people” as it prepares to adopt legislation that would put Vermont on a path toward a universal medical plan for the state’s residents.
The creation of a single-payer health care system is Gov. Peter Shumlin’s signature issue. He promised to create a universal insurance plan that would contain costs and provide access to care for all Vermonters.
The plan his administration introduced last week would require that insurance products for certain groups of Vermonters, including employers with fewer than 100 workers, be made available only through a state “exchange.”
Goddard recommended that lawmakers start smaller, targeting companies that employ fewer than 50 people. Then, he suggested, they could move ahead with a more ambitious first stage of a three-phase proposal to transition the state from the existing health care delivery system to a single-payer plan.
“We put this out there to suggest to you today that perhaps on this issue you want to slow down,” Goddard said.
The bill, H.202, which was introduced last week, sets the stage for the state to provide universal health care benefits to all residents. Health care providers in this system would be reimbursed through a single payment system, according to the bill.
The plan would be phased in over a six-year period, and the transition would occur in three phases.
In the first phase, the Shumlin administration proposes creating a “single-payer” exchange under the federal Affordable Care Act that would require individuals, state and municipal workers, teachers and small businesses to access health care insurance through one “exchange” that would be managed by the Department of Vermont Health Access.
Anya Rader Wallack, the special assistant to Gov. Peter Shumlin charged with creating the foundation for the single-payer system, gave testimony on H.202 last week. In her handout materials, she explained that the exchange would be used as “a platform to bring the benefits of administrative simplification, transparency and cost control to as much of the Vermont population as possible.”
In the bill before the Legislature, the administration asks lawmakers for a year to design the exchange, which would include Medicaid, Medicare and workers’ compensation, in addition to privately insured individuals and employees of small businesses.
Tom McKeown, executive director of Business Resource Services, an association that provides insurance to its 15,000 members, said the health care insurance system serves businesses with employees in the 50-100 range well.
“In our view it’s (the system) not really broken for the 50-100 market, so why merge it?” McKeown said. “It’s a functioning part of the market, so why not leave it intact?”
He argued that the state should wait until 2016 to fold employees from this target group into the single payer exchange. Both McKeown and Goddard suggested that lawmakers start the exchange with the pool of state employees, teachers and municipal employeees.
Companies that size prefer to have 12 to 14 different insurance plans to choose from, he said. Under the exchange, there will be two benefit plan options — silver or gold. McKeown complained the exchanges would eliminate incentives for business-based wellness programs.
McKeown also said lawmakers should allow insurers to sell plans to small businesses outside the exchange.
“In terms of benefit design, we believe the plan should only cover what the federal plans require the state to cover,” McKeown said. “This is a big financial risk. The state is required to put up whatever the difference is. There is no federal money.
“We’re saying, start to get something that’s sustainable,” McKeown said. “Make it sustainable.”
The committee also needs to consider how much competition the state will allow for insurers outside the exchange, according to McKeown.
Goddard said the Department of Vermont Health Access will be handling health care transactions, and lawmakers should “consider the role of state government in these state transactions.”
