A new year and a new legislative session have begun,
and it sounds a bit like a broken record: a mid-year budget deficit and an even
bigger deficit looming for the coming fiscal year. We just keep on passing
budgets that spend more than the economy is expected to grow, and should hardly
be surprised by the outcome.
The chair of my Health Care Committee took a moment
for reflection, nonetheless, to ground us for our work ahead, reminding us of
the “extraordinary ongoing experiment in democracy” that we are participating
in.
Imagine the concept, he said, of people deciding to
have every town elect someone from among themselves – just another ordinary lay
person without any special expertise – to send to Montpelier to try to make
decisions about what is best for the town and the state.
We’ve only been trying it for a few hundred years,
and it’s not a perfect system, but it’s what we’ve got and it’s better than the
alternatives other folks have tried.
For the 11 of us around the table in the Health Care
Committee room – six Democrats, three Republicans, one Progressive and one
Independent – it was a time to remember that we share the common purpose of
trying to make Vermont a better place for us all and future generations, even
if we don’t agree on how to best get there.
Our Chair, Bill Lippert, suggested that in the midst
of the turmoil of pressing issues of the months ahead, we keep in mind our
goals and aspirations for a better system for the delivery of health care, even
if they cannot or will not be achieved in the short term.
***
What are those most pressing short term issues?
Medicaid
Headlines have been telling us that a third of
Vermonters are now on Medicaid, and that we hadn’t projected the size of the
Obamacare increase, driving our tax burden to unsustainable levels.
That’s not fully accurate; the devil is always in
the details.
About a quarter of Vermonters now have Medicaid as
their primary form of health insurance. The rest of those leading to the “one
third” number are those who receive some level of financial help through
Medicaid for their regular health insurance: premium assistance for insurance
bought through the health exchange, for example, or Medicaid as a secondary
payer while on Medicare but financially needy.
Our forecasters were actually pretty accurate about
how many persons would be eligible for help, but the numbers of which persons would
fall into which category were off. More people were eligible for regular
Medicaid as a result of both the economy (lower incomes) and the changes in
federal definitions of what constitutes “income.”
Fewer ended up on premium assistance, and the cost
ended up $52 million higher than expected this year. Of that, $23 million is
the state’s share.
That $23 million shortfall is the largest, but not
the only increase in health care spending being proposed for this mid-year
adjustment to the current year’s budget. The “$1 million here, $2 million
there” other increases (called “upward pressures” in government bureaucrat
language) bring the total shortfall to $35 million.
That, of course, will carry forward into the needs
in the budget for the year ahead.
***
All
Payer Model
When the governor decided last year what some of us
had known for a long time – that Vermont couldn’t go it alone to create a
universal health care system – our Green Mountain Care Board began exploring
other mechanisms to achieve payment reforms that would create a fairer and more
sustainable way of financing our health care.
The Green Mountain Care Board was created by the
legislature to lead health care reform, and this five-member board was vested
with significant power to regulate hospital and private insurance rates.
Many parts of the Affordable Care Act (Obamacare)
are still rolling out. Medicaid expansion was only one piece. The federal
government is in particular pushing for cost containment measures for Medicare.
(Refresher: Medicaid is health care funded by the state and federal government
for those with low income; Medicare is the federal health insurance paid for
through payroll deductions for the elderly and persons with disabilities.)
One of its tools is the “Accountable Care
Organization” – ACOs – which are a lot like old managed care companies except
that the management of care and costs is done by the provider organizations
themselves, rather than an insurance company. Many Vermonters are not even
aware that their Medicare is now being managed by an ACO.
The ACO gets paid for the Medicare services
delivered, and if, through better management of patient care, it costs Medicare
less than the estimate of what it would have cost otherwise, the ACO gets to
split the savings with the government.
In our current payment system, care providers are
paid differently by private insurance, Medicare, and Medicaid. One of the
things that drive health insurance premiums up so high is that Medicaid doesn’t
pay its full share of costs, so that cost is transferred to private payers,
something called the “cost shift” that amounts to a hidden tax to pay for
Medicaid.
The vision of the “all payer model” is for Vermont
to set payment amounts for all providers: payments by Medicaid (which it
already does); by private insurance (which it does indirectly, through its
insurance rate-setting authority); and for Medicare (which would require
federal approval, called a “waiver.”)
An ACO could then manage care for all the patients
it serves without receiving different rates for different patients. The actual
services a patient receives would remain controlled by existing law. In other
words, if Vermont obtained a “Medicare waiver” in order to build an all-payer
model, it could not touch the benefits that Medicare recipients are entitled
to, but it could set the rates that are paid to the ACO.
The Achilles heel in this that isn’t discussed much
is that an all payer model would mean Vermont would have to start bringing
Medicaid rates up to even off into a similar range as the other two payers.
Where would that money come from?
This whole idea needs a great deal of care and
thought, but right now, under Vermont and federal law, the state can seek the
Medicare waiver without the consent of the legislature.
Another member of the Health Care Committee – Paul
Poirier, an Independent from Barre City – and I are having a bill drafted to
require legislative approval before a waiver could be signed with the federal
government.
This model may actually prove to be a valuable tool
for payment reform, but it is full of potential pitfalls as well. We need to
have the scrutiny and the confidence of much more oversight if we are going to
take this plunge.
***
The
Health Exchange
Much more out of the public eye these days is
Vermont Health Connect, the exchange for signing up for health insurance that
was such a fiasco in its first year of attempted operation.
It’s doing better, but it’s far from functioning
smoothly or the way intended, and new glitches keep erupting.
One of the new “glitches” has to do with people who
discover their insurance has been cancelled because they didn’t pay their
premium by the due date, even after receiving a grace period.
Nothing wrong with that, it would seem.
Except that we are cashing their checks!
Usually, in business, if your check is cashed it
means acceptance of a late payment.
The state says it plans on fixing this, not cashing
checks if a person is being cancelled, but it isn’t a priority. There are too
many other priorities – other “glitches – that are ahead of it in line.
That gives an idea of how much work is still ahead.
***
Thanks
for the honor of representing you! You can contact me or Rep. Patti Lewis by email
(counterp@tds.net for me; pattijlewis@myfairpoint.net
for Patti) or by leaving a message at the statehouse at 828-2228. We
welcome your feedback and input.
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