Vermont Health Care Bill Poised To Be Signed Into Law
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MONTPELIER, Vt. — Accustomed to being the first to dip its toe into hot-button issues, Vermont is preparing to provide public health care to all residents regardless of income, moving toward a government-run system that will take it as close to Canada philosophically as it is geographically.
Gov. Peter Shumlin is expected to sign legislation this month marking the first step on the path to phasing out most private insurance. The effort puts Vermont well in front of last year's federal health care overhaul.
The ultimate goal, Shumlin said recently, is a Canadian-style system "where health care is a right and not a privilege."
But it's not clear yet how Vermont – the first state to ban slavery in its constitution and to give marriage-like rights to same-sex couples – will achieve universal health care. The legislation places responsibility for the details of the new system, including how to pay for it, in the hands of a powerful new state board.
Vermont's turn toward universal care comes as more than two dozen states have gone in the opposite direction, suing to overturn the federal law. The U.S. House last week voted to strip federal funding from key parts of it, though that move is expected to die in the Senate.
While the federal law requires people to have health insurance and offers subsidies to help low- and moderate-income people buy it, Vermont would go further. It would change the way doctors and hospitals are paid and streamline the processing of insurance claims.
The federal law was modeled in part on Massachusetts' groundbreaking 2006 system that required all residents to have health insurance; unlike the Vermont plan, the Massachusetts program does not provide health care to all but does offer subsidized insurance to those can't otherwise afford it.
The Vermont bill sets up a five-member board which, in consultation with the executive branch and Legislature, is to answer the big unanswered questions in this year's bill. Those include how the system will be paid for – some have suggested a payroll tax on employers and workers; what benefits will be covered; what copays and deductibles it would include; and other details.
"Vermont is leading the way in having an authentic discussion about what a universal health care system would look like in the state," said Katie Robbins of Healthcare NOW. The Philadelphia-based group supports single-payer health care, under which everyone gets coverage from the same government-run system, similar to what military personnel have now.
Despite the growing opposition to the federal law, Vermont, where liberal Democrats control the governor's office and both houses of the Legislature, is undaunted in moving in the direction of Canada, which pays for its health care system through taxes.
And supporters say the state has built-in advantages. Vermont, with a small population of about 620,000, is often ranked as one of the healthiest states. It is well below the national average for infant mortality, childhood obesity, AIDS diagnoses and a range of other indicators of poor health, according to figures kept by the Kaiser Family Foundation.
The Census Bureau reported that, in 2007, Vermont ranked sixth in the country in physicians per capita, with 374 per 100,000, versus a national average of 271 per 100,000. And about 90 percent of Vermonters have some form of health insurance already.
But some of those with insurance say it falls far short of what they need.
Heather Loughlin, 42, was working as a vice president at the Sugarbush ski resort when she was diagnosed 2 1/2 years ago with multiple sclerosis. Before long, she found herself no longer able to work and buying insurance with a subsidy from the state under a current program, but with a private insurer.
A thick stack of coverage denial letters later, Loughlin said, she was back living with her parents in Ludlow, who were going into debt in their retirement to help her meet her medical costs.
"It doesn't matter if you're paying $300 or $400 a month for insurance," Loughlin said. "It's a mirage." She called the repeated coverage denial letters "mind-boggling and enraging. They just try to wear you down."
Advocates for changing the system brought hundreds of people with stories like that to hearings and rallies at the Statehouse last year and again this spring.
James Haslam of the Vermont Workers Center, which spearheaded a campaign under the banner "Health Care Is A Human Right," said the legislation wouldn't have passed without the grass-roots support.
"If other people want this in their states, they have to start organizing their neighbors," he said.
The bill indicates that the state would "maximize the receipt of federal funds" to help pay for the new health care system. But Vermont's prospects of receiving federal money are uncertain amid efforts by Republicans in Congress to chip away at the federal overhaul.
"The big hole in Vermont's plan has always been its failure to specify a funding source," said Shawn Shouldice of the National Federation of Independent Business, which opposes the legislation. "The only clearly defined funding element was the federal grant money ... and now that could vanish, as well."
William Hsiao, a Harvard health care economist and consultant to the drafters of Vermont's legislation, has called for a payroll tax shared by employers and workers. But lawmakers put off a decision on that, some saying they wanted a way to tax non-wage income to support the program as well.
There are also doubts the bill really will move Vermont toward a genuine single-payer system. It leaves room for people to buy supplemental insurance, and among the big questions is whether workers at IBM and some of the major employers in the state, whose self-insurance systems are regulated under federal law, will be allowed to be absorbed into Vermont's system.
In a move crucial to the project's success, backers say, the board will design and administer new cost-control measures, including "global budgeting" for hospitals and other health care providers. Instead of the traditional "fee-for-service" system in which doctors are paid by the patient visit or procedure performed, the new system will be designed to pay for providing necessary health care to a given population.
A senior health researcher at the conservative Heritage Foundation in Washington warned, though, that Vermont may want to be careful in playing with the financial incentives that can influence how health care systems develop over time.
In some other countries, Ed Haislmaier of Heritage said, the sort of "global budgeting" Vermont envisions ends up with less acutely ill patients with longer hospital stays. "Hospitals turn into nursing homes," he said.
The bill calls for maintaining and expanding the state's Blueprint for Health program, which is designed to streamline and provide better preventive care to people with chronic conditions like heart disease and diabetes.
Rep. Mark Larson, chairman of the Health Care Committee in the Vermont House and a key architect of the legislation, acknowledged that the bill is really a planning document and that its supporters have much left to prove.
After the House gave the bill final approval 94-49 Thursday, he said, "I think today's vote reflects people saying, 'OK, you've made your case. Now show me.'"
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DAVE GRAM 05/11/11 02:46 PM ET Associated Press