Editor’s note: This op-ed is by Shawn Shouldice, who serves as the Vermont state director of the National Federation of Independent Business.
The health care reform proposal that is the centerpiece of the Shumlin administration’s legislative agenda is developing stress fractures that could bring the whole experiment to a crashing end, but legislators continue to press on ignoring the signals.
The governor first promised that his reform would create a “robust marketplace” in which Vermonters would find multiple options from which to choose. The key to the new system is Vermont’s health care exchange, envisioned as an Internet-based clearinghouse similar to the popular travel discount websites where competing offers appear side by side for easy comparison. Then the administration promised $500 million in cost savings; yet now they suggest the best they can do is to bend the cost curve abandoning real cost savings.
It’s widely understood that Vermont must establish a health care exchange as mandated by the controversial federal health care legislation, currently under scrutiny by the Supreme Court. But the problem with Vermont’s proposed health care exchange is that it requires small businesses with 50 or fewer employees to purchase insurance from only within Vermont’s exchange. The only choice available will be to determine how much the purchaser of the insurance is willing to spend out of their pocket — not a comparison of coverage provided by multiple providers. And by the administration’s own admission, health insurance premiums will increase by at least 16 percent.
Earlier this session, the governor suggested that big business (those employing more than 100 employees) were so sufficiently worried about the lack of choice and increased cost that they should be excused from the mandate. The proposed Vermont exchange more dramatically limits insurance choice than that envisioned by the federal law or contemplated by any other state. The legislation also exempts public teachers and state employees representing roughly 40,000 citizens.
So, what’s the rationale for this? Public union employees enjoy extremely generous insurance plans that wouldn’t qualify under the new system. These employees would end up paying higher premiums for lower quality insurance, so they got an exemption. Big business warned that the governor’s program would increase their insurance costs, limit their employees’ choices and damage their competitiveness, so they got an exemption too.
Some legislative proponents have argued that the federal law mandates small businesses be forced into the exchange. But this is flatly untrue. In fact, the federal law specifies very clearly that participation in the exchanges can be voluntary.
If the Vermont health care exchange is supposed to be the greatest thing since sliced bread why does Montpelier intend to mandate it only on individuals and small businesses, but give public unions and big businesses a choice?
Why are lawmakers repealing Catamount Health Care but not the employer assessment that funds the program?
And why will they eliminate the ability for insurance brokers and agents to be paid for their services? After all, we’ll only saves $10 million-$20 million in a system that costs $5 billion. Ninety-six percent of Vermont’s businesses are small business — insurance agents and brokers are small businesses themselves and provide a valuable service to small businesses across Vermont.
NFIB members overwhelmingly support a system that allows for the option to purchase insurance from inside and from outside Vermont’s exchange, so that they can compare and contrast benefits and price. Mandating citizens to purchase their health insurance only from within the Vermont health care exchange is not choice.
The health care reform solution shouldn’t pick winners and losers. If Vermont is going to implement their own exchange; it should offer a robust set of choices and participation should be optional for everyone, not just a few favored groups.
Congratulations to big business and public unions for their legislative success – they’ll continue to be permitted to compare benefits and prices. There is still time for Montpelier to level the playing field for all its citizens – but will they?
