Editor’s note: This op-ed is by Brady M. Hoffman, a graduate student in the Master of Public Administration Program at the University of Vermont.
President Barack Obama enacted the Patient Protection and Affordable Care Act (PPACA) in 2010, aspiring to increase accessibility to and affordability of health care for the American public. Through a series of reforms on both the national and state levels, the PPACA promises to insure 34 million of the 57 million Americans who are uninsured. The question on everyone’s mind is how much will it cost and will it work?
The United States spends roughly 17.6 percent of its annual GDP on health care, boasting the best medical care in the world, yet according to reports it is ranked 37th in health care when compared to other countries like Germany and Australia, which spend less than 11 percent of their total GDP on health care. This begs the question, what are we doing wrong? Despite leading technology, advance medical practice and a phenomenal education system, Americans, Vermonters, still struggle to access affordable health care. I believe PPACA, in the immediate, will increase initial cost of health care to the government, however will decrease the overall cost of health care to the public in the long term. This will happen, through decreasing administrative cost, lowering out-of-pocket cost, decreasing premiums through distribution of risk pools and increasing health care coverage, ultimately increasing accessibility to all.
Whether we choose to admit it or not, we already play a large role in subsidization of health services. Ultimately, the exchange will provide an avenue to receive better insurance at a decreased rate for the majority of Vermonters.
The majority of changes, at the national level, will come through the expansion of Medicaid. In states like Vermont, Medicaid eligibility has been expanded to 138 percent of the federal poverty level (roughly $24,352 annually for a family of three). However, Vermont already provides benefits for those families living under 300 percent of the federal poverty level through Vermont health programs. Even before PPACA, Vermont was striving to provide increased accessibility and better care through programs like Blueprint for Health, Catamount Health, VHAP and Dr. Dynasaur. All that has changed is the delivery in the form of health exchanges, mandated by the federal government.
The Vermont state health benefit exchange will ultimately expand the present system by providing more options. Unfortunately there will be winners and loser in the exchange with some paying more than others to accommodate cost shift. This also means that new regulations will require more businesses and Vermonters to play a role assuming responsibility for their own health service delivery. Whether we choose to admit it or not, we already play a large role in subsidization of health services. Ultimately, the exchange will provide an avenue to receive better insurance at a decreased rate for the majority of Vermonters.
In January 2012, Robin Lunge, director of Health Care Reform for Vermont, stated, “ …we don’t provide insurance coverage or adequate access to services for many Vermonters.” With almost 50,000 Vermonters uninsured and 150,000 Vermonters underinsured, and despite the majority of Vermonters holding some form of insurance, many still experience barriers such as high premiums and deductibles that prevent them from seeking or receiving the needed health services. Vermonters spend roughly $6 billion annually on health care, which represents almost the entirety of the Vermont state budget for 2012. Yet opponents of health reform argue that the current health care system works, where the average individually insured pays over 49 percent of their total medical cost. In the health benefit exchange at a bronze level (one of the lowest levels of coverage) the individually insured would only pay 40 percent of total medical, and under a single payer would pay only 13 percent of their total medical cost.
Is there a cost to building a new health care system? Of course. The state needs to find a way finance $1.6 billion to assist in the implementation of Green Mountain Care. However, if we want to build better health services, we have to pay for it.
Here are the facts: In Vermont our health expenditures almost match our state budget. Green Mountain Care is estimated to save Vermonters $281 million in the first three years of operation, with the total estimated cost of $3.5 billion annually, with individuals and employers contributing an estimated $3 billion through out-of-pocket cost and insurance cost. Coming in almost half of the cost of the present system, Green Mountain Care will save Vermonters a considerable amount of money in the long term. Green Mountain Care is estimated to reduce the overall cost and increase accessibility to health services for all Vermonters. By providing equitable, quality and equal access to health services, we will build a healthier Vermont.
In Gov. George Aiken’s inaugural address in 1939, he said, “A subject of nation-wide discussion today is that of health insurance and hospital insurance. Hospital insurance began in Vermont, and we the people of this state recognize full well that the health of our neighbors as well as of our own family is of vital importance to us.” It would seem that 74 years later it would be time to act.
