The legislative health care debate begins on Day One of the 2014 session Tuesday when Gov. Peter Shumlin appears before a joint committee.
The early and unusual address to the House and Senate health care committees takes place at 11 a.m. in Room 11 at the Statehouse.
The governor is expected to respond to the fitful start of the state’s new health care exchange and outline his plans for a publicly financed system due in 2017.
The chairs of those committees have said it’s important for lawmakers to monitor the progress of the state’s fledgling health care exchange while preparing for the next phase.
Vermont Health Connect, the state’s health care exchange website, has only in the past few weeks been consistently operational, and paying premiums online is still not an option. Instead, the state is billing enrollees with paper invoices.
The Legislature and the administration enacted a law two years ago that made Vermont the only state in the country that required individuals and workers for small businesses — about 100,000 people — to enroll in the exchange.
The exchange website was largely inaccessible on the launch date, Oct. 1, and glitches continued for six to seven weeks. Just before Thanksgiving, the Shumlin administration extended the sign-up date to March 31 (rather than the original Dec. 31) and allowed small businesses to obtain coverage for employees directly through insurers (29,200 workers were signed up in this fashion). By December, the site was working well enough for about 23,000 individual Vermonters to sign up.
Rep. Michael Fisher, a Lincoln Democrat and chair of the House Health Care Committee, said lawmakers will seek testimony from other administration officials, insurers, navigators and stakeholders to give the public a window into what took place in the past several months.
“The main tool that we have is shining a light,” Fisher said. “We’re in the middle of a fairly significant transition, one that has clearly not gone smoothly, and I think we have a deep responsibility to keep an eye on the parts that are still in the works.”
Fisher’s counterpart in the Senate, Sen. Claire Ayer, D-Addison, echoed an interest in oversight. She wants to closely track the progress of Vermonters formerly enrolled in VHAP and Catamount as they move to coverage through the exchange.
House Speaker Shap Smith, D-Morrisville, agreed there should be oversight, but said lawmakers need to be cognizant that the transition is ongoing.
“I want to be mindful of the fact that they’re still trying to get the small business part of it up and running, so I’d like to balance our need to oversee what’s happened so far with the need to actually try to get the small business portion of it up and running,” Smith said.
The review of the health care rollout in the House is likely to play out in the Health Care, Government Operations and Appropriations committees, Smith said.
Lawmakers are eager to parse where things went wrong with the Vermont Health Connect website. That could take on grander dimensions, as a number of IT projects spanning several administrations have not gone well, Smith said.
“I think we would like to know, is it something that’s happening because of legislative problems, you know, the way that we’ve got appropriations structured or the procurement process … or is it an administrative thing?” Smith said.
The state must purchase more IT systems to replace aging computing infrastructure, and it’s becoming difficult to persuade lawmakers to appropriate the money for them as one after another fails or gets off to a rocky start, Smith said.
“For us to make the investment, we have to have some confidence that we have a system in place that works,” he added.
The same dig into state IT systems is likely to happen in the Senate, Ayer said, but she doesn’t believe it will play out in her committee.
Looking forward to single-payer
The Shumlin administration has made clear they plan to begin laying the groundwork for Green Mountain Care, the state’s planned single-payer entity, but that 2014 will be a year for study and planning, not passing new laws.
Michael Costa, deputy commissioner of Health Care Reform, said in December that he would present several financing structures for the Legislature to consider. The administration’s expectation is that lawmakers will spend the session crunching numbers to assess their impact.
With feedback from the Legislature, Costa and his team will make revisions and the administration will propose a single financing plan to lawmakers in spring 2015, along with several alternative benefits packages. A finalized benefits package will be nailed down the following year, appropriations will be made and the system will be ready for the 2017 go-live date.
Smith, Ayer and Fisher all appeared to be on board with the administration’s timeline.
“I imagine there might be some discussions about what options are available,” Smith said, but when pressed for specifics he added, “I think it’s too early to have those conversations. I don’t think people understand how (health care) is financed today.”
Vermonters need to understand how they pay for health care now before the Legislature makes changes to the system, Smith said.
Some lawmakers think spending 2014 examining options to pay for single-payer will hurt Vermont’s readiness in 2017.
Sen. Peter Galbraith, D-Windham, has introduced two bills relating to paying for Green Mountain Care. One, S.252, focuses on ensuring the system lives up to its statutory requirements and has a provision to ensure federal employees enrolled in TRICARE have the option to keep that plan or enroll through the new system.
Galbraith’s other bill, S.254, creates a transitional fund for Green Mountain Care and calls for the taxes to be levied starting in 2015. Green Mountain Care will rely significantly on a payroll tax, income tax or mix thereof, the bill states, and waiting until 2016 to begin collecting those taxes will impose an “extreme hardship” on the businesses and individuals that have to pay them.
Sen. Tim Ashe, P/D-Chittenden, who chairs the Senate Finance Committee, has said the state is dragging its feet on developing the revenue structure for Green Mountain Care.
“Frankly, the Green Mountain Care Board, the Legislature and the administration have paid too little attention to the sticker shock that these changes will have on Vermonters,” he told VTDigger a year ago.
Ayer’s expectation is that the administration will come forward with a financing plan for lawmakers to consider. But she said she understands the sense of urgency for developing a revenue model.
“It makes sense to start saving money for the go-live date, because one day we’ll be using one way of getting money, and we’re not going to have enough money to keep paying our claims the next day when we move to a new system,” Ayer said.
Ayer said equity is her primary concern, regardless of what tax structure is ultimately implemented.
“One of the issues that’s important to us is progressivity, to make sure that it’s not disproportionately hard on the poor,” Ayer said, “My own thing is that everybody pays.”
That’s the revenue side. The other important step will be probing how that money gets spent. Bringing down health care costs is equally important to the implementation of single-payer, lawmakers said. As Shumlin has said in the past, and as is mandated by Act 48, the system won’t go forward unless it creates a net savings for Vermont.
“Vermont spends $6 billion on health care annually, and we’ve been seeing recently a rate of growth of 7.1. Based on that rate of growth (health care costs) will eat us alive,” Fisher said. “So our goal is to bring that rate down.”
Identifying cost savings opportunities and crafting legislation to realize them is going to be a major priority for both of their committees. Ayer said she wants to take a hard look at where health care dollars are being spent.
“That’s everything from aspirin to surgery and all the steps in between,” she said.
Some areas where savings might be gleaned are payment reform within Affordable Care Organizations – partnerships between providers – administrative spending and preferred drug lists, Ayer said. To help identify other areas she will call for testimony from the Department of Financial Regulation and the Green Mountain Care Board, which is charged with setting rates and finding savings.
Working with the labor committee to ensure Vermont has the workforce to deliver proper care, and focusing on preventative care could also yield savings, she added.
Both committees plan to solicit testimony from the writers of two conflicting studies on the cost of switching to single-player, one done by researchers with the University of Massachusetts and the other by consulting firm Avalere, Ayer and Fisher said.
Avalere found that the $1.6 billion state cost figure from the UMass study – which underpins the administration’s financing plan – is too optimistic. The consulting firm pegged the actual cost at between $1.9 billion and $2.2 billion. The study work was commissioned by a group of health care companies and business associations.
The committees’ job will be to vet the assumptions in both studies. Though there might not be much legislation passed this session, Ayer said progress toward single-payer won’t stall.
“It doesn’t mean we’re not going to move forward, it means we’re going to move forward with our eyes open,” she said.
Difficult road for changes in subsidies, new mandates
There is a House bill, H.549, to increase cost-sharing subsidies for families with yearly income between roughly $59,000 for a family of four or $28,000 for an individual to 87 percent of the total cost.
“That’s really a budget issue,” Fisher said, noting the debate over subsidy levels and income rates was heated and left some with lingering frustrations. “I agree in principle, but it’s really all about the money.”
There are also a number of House bills from last session mandating coverage ranging from requiring vision and dental for adults to requiring GMC to cover specific treatments or procedures such as acupuncture or bone marrow testing.
Additional mandates are popular, but unlikely to gain traction, according to Fisher. That’s because the federal government won’t pay for health care mandates not included in the ACA, and state money for health care is spread thin.
Lawmakers unlikely to take up immunization bills
Several bills relating to childhood immunizations linger from last session and at least one new bill will be introduced.
“When the House passes something we’re ready to take them up,” Ayer said.
“I don’t plan to take up the immunization issue, we spent a great deal of time on it two years ago, and it feels to me like we need to give it more time to see how it plays out,” Fisher said.
Among the bills unlikely to see action are S.194 calling for immunization rates to be posted at schools, and ones to remove the religious and philosophical exemption should schools fall below a 90 percent immunization rate (S.102 and H.138).
Lyme disease and tick-borne illness
In a rehash of a battle from last session, bills in both houses would introduce safeguards to empower physicians to prescribe long-term antibiotics as a treatment for Lyme disease and other tick-borne illnesses.
“A number of doctors feel they are under threat of disciplinary action because Lyme and chronic Lyme are not recognized as being the problems they are,” said Sen. David Zuckerman, P-Chittenden, sponsor of the Senate bill, S.123.
It’s really an issue of timing, Zuckerman said. Doctors are beginning to grapple with the overprescription of antibiotics at the same time Lyme is becoming a more widespread problem. The bacterium that causes Lyme requires the sustained use of antibiotics to kill, Zuckerman said.
The debate on the issue last session revealed strong feelings on both sides, Fisher said. Last year, his committee asked the Department of Health to take a closer look at the issue and he plans to ask it for an update.
To Ayer’s knowledge, there has never been an instance of a doctor being censured or an insurance company refusing to pay for treatment, she said.
Their needs to be more research, because currently the science around the efficacy of long-term antibiotics is inconclusive, Ayer said.
