Health Care

Trump health care bill could cost Vermont $200 million

Al Gobeille
Agency of Human Services Secretary Al Gobeille. Photo by Andrew Kutches/VTDigger

Officials at the Vermont Agency of Human Services say a bill currently moving through Congress could cost the state $200 million per year in federal funding starting in late 2019.

That staggering sum is the first estimate of potential losses the state could face if the proposed American Health Care Act is enacted. The state currently spends $1.7 billion in federal and state dollars on the Medicaid program.

Al Gobeille, the secretary of the Agency of Human Services, said without that $200 million per year, the state could be forced to lower Medicaid payments to doctors and hospitals; reduce benefits for Medicaid patients; and cut other health programs that receive Medicaid funding.

“There’s not a lot of great options, and that’s why this is so serious,” he said at a meeting with reporters Friday.

Watch the Facebook live video here.

Affordable Care Act: The 2010 law mandates that every individual buy insurance. The law created (1) health care websites that allow individuals who don’t get insurance through an employer to buy coverage (2) subsidies for people making between about $15,000 and $48,000 (3) an expansion of the number of people eligible for Medicaid.

American Health Care Act: A bill proposed that would replace the Affordable Care Act. The bill keeps the health care websites, but does not mandate that everyone buy insurance. The legislation would (1) give some individuals tax credits to pay for health insurance (2) allow insurance companies to hike rates 30% over a 12-month period for individuals whose coverage lapses for more than 63 days (3) reduce the amount of money the federal government gives states to pay for Medicaid starting in fiscal year 2020.

Gov. Phil Scott also told reporters Friday he was concerned about tens of thousands Vermonters losing coverage and the possible loss of subsidies under the proposed Republican plan.

“At first blush, this appears would have a detrimental effect on Vermont, “ Scott said. “We take this seriously.”

About $2.5 million of that $200 million is federal money that the Vermont Medicaid program would have paid to Planned Parenthood when Vermonters go to a clinic for reproductive services such as cancer screenings and wellness visits. The proposed bill cuts all federal funding to Planned Parenthood.

“Women’s health care is a priority for the governor,” Gobeille said. “This bill as proposed doesn’t help that. That’s a problem for us … The question becomes, ‘What does the state do about that?’ and that’s unclear at this time, but I believe it’s a priority.”

Additionally, the Department of Vermont Health Access says the federal legislation cuts subsidies for Vermont Health Connect from about $100 million to between $80 million and $95 million.

Gobeille said that means many Vermont families would need to pay thousands of dollars more per year for health care in the commercial insurance market. His team outlined three scenarios for low-income families:

• A 27-year-old making $25,305 currently pays just under $3,000 per year for health insurance, but would pay more than $5,500 per year if the new bill is enacted.
• A two-person household making $37,144 currently pays about $6,200 per year for medical coverage, but would pay nearly $9,800 per year under the American Health Care Act.
• A family of four making $51,020 currently pays just under $5,000 per year for health insurance, but would pay more than $9,000 per year under the new law.

Gobeille’s team also described how higher-income people would benefit:
• A 27-year-old making $75,000 per year currently doesn’t receive any subsidy for health insurance, but could get a tax credit of $2,000 per year under the proposal.
• A 40-year-old making $75,000 per year could get a tax credit of $3,000 per year.
• A 60-year-old making $75,000 per year could receive $4,000 per year.

“Vermonters have been clear with us that the Affordable Care Act to many has not been affordable,” Gobeille said. “Making it less affordable will not encourage folks to remain signed up or get people to sign up, thus driving folks to become uninsured.”

Gobeille said that Vermont has the second-lowest uninsured rate in the nation (3.7 percent), behind Massachusetts, and the lowest uninsured rate for children. “We do not want to see that degrade, but this (bill) would head in that direction,” he said.

Gobeille said the only good thing about the new bill is it continues to give federal money to hospitals to provide charity care for people who are uninsured. He said the drafters of the bill kept the subsidy in place because they knew the new bill would knock people off health insurance plans.

“My biggest fear is that this is a tremendous opportunity for the United States and for Vermont to actually fix problems we all know we have with our current health care system, and we’ll just miss the opportunity,” Gobeille said.

Mike Fisher, the chief health care advocate for Vermont Legal Aid, said the proposed bill would cause “significant and predictable harm to Vermonters” and will result in fewer people with access to medical care.

“We know what happens when people don’t have the care they need,” Fisher said. “They get sicker. They lose their productivity. Their families suffer, and ultimately, we know they don’t live as long.”

He added: “The $200 million number is the kind of thing that makes me very concerned about how we’re going to be able to continue to give people a human level of care.”

The bill has already passed through two key committees in Congress, according to the New York Times.

AARP, which represents retirees, and the American Medical Association both oppose the American Health Care Act.

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Erin Mansfield

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  • Good thing Al and company has been able to significantly reduce the cost of healthcare and drive down premiums in the state of Vermont. I’m sure he has managed to find savings greater than $200MM. Never mind. What was I thinking? We need the government cheese more than Jasper Hill cheese.

    By the way, how is Phil’s initiative to review every state process for financial savings and efficiency going? I haven’t read about any savings or efficiencies yet.

  • Robert Lehmert

    But you get a brand new wall! And a whole bunch of F35s! And c’mon — what’s a few more junkies walking around in the scheme of things any way? Honestly people — can’t you see the bright side of things?

  • Edward Letourneau

    So now the state is going to have “its” welfare cut. Hopefully it will make people in Montpelier start thinking about how to bring business here that will provide jobs with health insurance. A good look at Act 250 is appropriate place to start. It has not preserved the landscape and has kept jobs fro coming here.

    • David P. Bresett

      Stop sending our money to the feds then!

    • walter carpenter

      “Hopefully it will make people in Montpelier start thinking about how to bring business here that will provide jobs with health insurance.”

      What kind of health insurance? More high deductibles? Why do businesses have to provide health insurance? Why not do a Medicare-for-all, Medicaid-for-all type system, making the necessary rate adjustments and so on, and free businesses that are here already, that are starting up here, or are coming here from worry about incessant health insurance problems and have everyone insured?

  • wendywilton

    VT painted itself into a corner under Shumlin and the Democrats by expanding Medicaid to fast, too far. Not only will the state be facing possible retractions in federal funding, it built a system of paying for the expansion on the backs of employees, employers and taxpayers with unrelenting healthcare insurance hikes.
    35% of our state’s revenues come from the federal government, much of it Medicaid, which represents a huge and irresponsible financial exposure.

    • Gail Graham

      Very well stated Wendy. Expanding the Medicaid was one of the not so wise decisions of the prior Administration, among others.

  • Dave Bellini

    How about limiting Medicaid to healthcare? Vermont has used Medicaid money for anything and everything. It won’t solve all the problems but it’s a start at cost containment. Vermont has been on a 10 year mission to draw down Medicaid money any way possible and use the money very broadly. Short term thinking.

  • Meg Streeter

    Interesting. Would like to see a follow-up story about how Vermont spends $1.7 billion on Medicaid in a state with 625,000 residents.

  • David P. Bresett

    It would be much easier to pass an Amendment to Vermont’s Constitution that outlaws insurance companies from selling health insurance. Every industrialize country in the world has done it except this backward country. Corruption would have to stop at that point!!!

    • walter carpenter

      “Every industrialize country in the world has done it except this backward country.”

      Good point, thanks Dave.

  • Bradleigh Stockwell

    Great article by Erin Mansfield. I appreciate facts and this article is full of them – for anyone looking for them.

    It’s obvious most of the comments are based on people reading the title of article and taking it from there. I’m concerned with what the article says, like how a 27-year-old currently paying just under $3,000 per year
    for Obamacare will pay more than $5,500 per year under Trumpcare. A two-person household paying about $6,200 per year for medical coverage will pay
    nearly $9,800 per year under Trumpcare. A
    family of four paying under $5,000 under Obamacare will pay more than $9,000 per year under Trumpcare.

    Is this too much information? Should I just join the chorus and complain about Medicaid? Decisions, decisions . . .

  • Rich Lachapelle

    Maybe this is just what Vermont needs to get us to back off a bit from the federal teat.

    The Montpelier demoprogs are like the unemployed 35 year old living in Mom and Dad’s basement demanding to be covered on their health policy. The utopian dream of having every imaginable ailment or inconvenience covered with no out-of-pocket expense will bankrupt any universal coverage system. Any viable system will have to include a focus on that which is MEDICALLY NECESSARY and the expensive treatments for catastrophic needs. The routine visits and “maintenance” type services need to have a reasonable co-pay to discourage abuse. People who show up in the emergency room for non-emergencies need to be given directions to the nearest community health clinic and shown the door. Contraception needs to be regarded as a choice and a personal expense. If we include extremely expensive addiction rehab as “health care”, there needs to be a limit on how many times someone can take advantage. Too many criminal offenders are given the choice between jail or rehab when they have absolutely no intention of quitting their habit. Tough choices with an emphasis on personal responsibility needs to be incorporated into any public/universal coverage system.

    • walter carpenter

      “Any viable system will have to include a focus on that which is MEDICALLY NECESSARY and the expensive treatments for catastrophic needs.”

      And who is going to decide what is “medically necessary” and what is not? And, if you are sick and they decide that treatments for you are “medically unnecessary,” would you have the ability to dispute this? I have been there before with private insurance declining having treatments as not “medically necessary,” and nearly died as a result of it.

      “The routine visits and “maintenance” type services need to have a reasonable co-pay to discourage abuse.”

      What is abuse and what is not abuse? Who is going to give the thumbs up or the thumbs down for this?

      “Tough choices with an emphasis on personal responsibility”

      What is “personal responsibility” and for whom?

  • Daniel Burks

    Looks to me like there are at least three options:

    1. Tell the GOP to stop messing with the ACA; just leave it alone. And then, when the last Provider pulls out of VT we can look at what we have and mostly don’t have. With a REAL understanding of where ACA was going, and more importantly, wasn’t going, we can reconsider what VT can afford.

    2. Recognize that the other 49 states don’t feel obligated to pay for VT’s ‘free lunch’ and instruct our DC reps to get seriously engaged in representing the seniors (50 – 64). The youth has left.

    3. Or….this may be too much of a stretch…elect some legislators that understand the importance of not only NOT running off our businesses, BUT offer some ideas of how to attract businesses. That would represent the best start.

  • Joe Shannon

    Vermont is among the worst of business friendly states. It is 49th with only NY being less welcoming. Between taxes, fees, and the fight for Family Leave and $15 an hour who would move a business here? Vermont needs to lower it’s expectations from employers.
    We also have to get a grip on “Non Profit” companies they are robbing the State blind.

  • David Dudley

    The bill currently being talked about in congress has not even gone to committee yet. These people in DHS don’t know anything. The bill “Could” do this…..the bill “Could” do that………..The State “Could” loose this…….. Get a grip already.

    • Katherine Silta

      What are you talking about? They passed it out of Ways and Means and Commerce and Finance last week without the benefit of CBO scoring.