Last week, the Senate Health and Welfare Committee sent the Appropriations Committee a memo with its budget recommendations.
At the top of its list was a suggestion to fund subsidies to prevent lower income working Vermonters from experiencing sharp hikes in their annual out-of-pocket liability.
The hitch?
These subsidies would cost the state $5 million more than what the House approved — a notion that Sen. Jane Kitchel, D-Danville, is not particularly excited about.
“I understand the transitional difficulties and the equity issues, but I think the House Health Committee really weighed this out and at this point my recommendation to the committee is that we concur with the House,” said Kitchel, who chairs Senate Appropriations.
The subsidies are meant to help individuals previously enrolled in the state subsidized programs Catamount and VHAP. When the state’s new health insurance marketplace — Vermont Health Connect — goes into effect in 2014, these programs will end. Without state subsidies, Catamount and VHAP beneficiaries face steep cost hikes.
The Senate committee’s recommendation deviates substantially from that of the House Health Care Committee. The House committee recommended $1.484 million in fiscal year 2014 cost-sharing subsidies to reduce out-of-pocket maximums from insurance plans under the federal Affordable Care Act, or Obamacare.
But even with the House subsidies, many lower income Vermonters are looking at out-of-pocket limits that will be double what they are liable for now. Individuals earning between $28,725 and $34,470 who are enrolled in Catamount would face annual limits that are roughly four times more than what they are currently responsible for.
The Senate Health and Welfare Committee proposed annual out-of-pocket limits at $1,250 for individuals earning between $17,235 and $34,470 annually. Vermonters at that income level, who are enrolled in Catamount, currently have an out-of-pocket limit of $1,050.
The Senate committee’s proposal would cost the state $6.479 million.
The committee’s recommendation is followed by a recognition “that there may not be monies available to fund out-of-pocket costs. It could support increased subsidies for out-of-pocket costs to the extent that other funds are available.”
“In the event there are no funds available to provide for a larger subsidy, the Committee would support the House’s proposal,” the memo adds.
Kitchel said that in addition to the total $4.35 million in subsidies for these lower income Vermonters — which include assistance to reduce premiums — legislators have to find annual funds to operate and maintain a new health insurance marketplace. And the administration is asking for $18.4 million every year.
“Eighteen million dollars is a very large expenditure, and if you put it in relation it’s larger than the Tax Department,” said Kitchel, who quoted the latter expenditure at about $15 million a year to run. “We have a whole host of health care-related expenditures.”
