When you do surveys or polling, expertise and how questions are asked can heavily influence its accuracy. But if you ask the exact same questions over time, even if the questions are not hitting on the exactly right point, the ways the responses change can still provide valuable insights.
That’s how I look at the newly released results of Vermont’s Household Health Insurance Survey, something we have been conducting every three years or so since 2005. My House Health Care Committee heard a presentation on the new numbers this past week. It is based on in-depth interviews with more than 3,000 Vermonters. If you’d like to look at it directly, it’s at www.healthvermont.gov/stats/surveys/household-health-insurance-survey
So what does it tell us, and what does it fail to tell us? Some of the key “good news” components are that we have continued to maintain the level of 97% insurance coverage in the state. In addition, of the 70,000 or so Vermonters who lost jobs during COVID, 84% were able to maintain health coverage.
On the not-so-good news front, the number of Vermonters under age 65 who are underinsured has risen from 36 to 40 percent in the past seven years, despite all the increases in financial supports. In addition, the number of those who are on Medicare without having any coverage beyond the basic Parts A and B is 64%. Those are both important numbers but require a much deeper dive. I’ll try at least sharing a shallow dive.
What does “underinsured” mean? Broadly defined it means that based upon one’s income, a person cannot get the level of health care they need because their insurance does not cover enough of the costs to protect them. A simple example would be a plan that has a $10,000 deductible for someone making $40,000 a year. They would have to pay one fourth of their income in health costs before their insurance would start paying. If almost all Vermonters have insurance but a significant percentage of them still can’t access health care, the high level of insurance coverage is not exactly comforting.
The flaw is in trying to define underinsured, so that it isn’t just based on subjective perception. The survey uses a formula. Underinsured means that either the deductible is more than 5% of household income, or current medical expenses (co-pays and deductibles paid) are greater than 10% of income for those at 200% of poverty or more or 5% of income for those below 200% of poverty. (For a single person in 2021, 200% was $25,760; for a family of four, it was $53,000.) Even though it is considered the best available definition, it’s flawed for several reasons.
First, it does not include the amount you are paying for your insurance premiums. If you are paying a staggering amount for coverage and as a result your out-of-pocket co-pays and deductibles are lower, that doesn’t get considered in the overall cost-burden of your health care. It also includes costs for health care that are not routinely covered by insurance at all which can skew the comparison of out-of-pocket costs. Finally, it doesn’t capture health savings accounts that are funded (fully or partially) by employers. If your insurance has really high co-pays but you have an HSA that covers most of them, you might still be counted as underinsured.
However, since we are using the same flawed formula every time, the relative change over the years still gives us important information. If under any definition those who fit under it are growing as a percentage, it is not good news in assessing whether our health care system is accessible and affordable.
Better Definitions?
It seems to me that in order to tackle a problem, we need to define the goal. Otherwise, if our goal is “affordable and accessible,” how do we know if we are getting closer to meeting it?
Last summer and fall, I was on our legislative study committee that was aptly titled a Task Force on Accessible, Affordable Health Care. Several of us pushed for the need to develop a definition as a first step, and there was general agreement. We had a consulting firm that was doing the legwork for our evaluation, and it began straying more into subtopics that identified various projects that might help reduce system costs, thereby impacting affordability. Setting a standard fell by the wayside. For that reason, as well as the Medicare issue that I will discuss in a moment, I voted against adopting the consultant report as our Task Force Report.
Who Are They?
Even without a definition, one would think we could identify the subgroups of people who have the least access to affordable coverage and target our problem-solving towards them. But we can’t, because much of it goes back to the fact that so much of our health coverage is employer-based. As per the updates from this year’s survey, 24% of Vermonters get their primary insurance from Medicaid, 22% from Medicare, and 49% through private companies.
Given our aging demographics, it’s no surprise that the Medicare percentage has gone from 15 to 22% since 2005. The Medicaid increase from 15 to 24% may be slightly off in this year’s data because the federal rules have forbidden reassessments of eligibility during COVID. However, much of it relates to the Affordable Care Act expansion of coverage. Of the private insurance group – which has dropped from 59% in 2005 to the current 49% in 2021 -- 10% are individual buyers on the health exchange (“Vermont Health Connect”.) Right now, as long as the increased subsidies from the federal government are in effect, most of them have some of the best accessibility. For all the remainder, who are getting insurance through their employer, we have no way of identifying what level of coverage they are receiving.
Under the Affordable Care Act, you can switch to the health exchange if your employer’s insurance is not considered “affordable,” which is defined as a premium share that is greater than 9.6% of your income. Once again, this is not a rational standard. If your premium is low because of a huge deductible and huge co-pays, tough luck; you can’t opt for the much lower costs on the exchange. The formula looks solely at the premium you pay.
There is a worse problem that affects families directly. The affordability standard is based on the single employee, without including the costs for the rest of a family, even if the employer contributes nothing towards that. This “family glitch” can leave families paying 20 percent of their income for health coverage but still without access to the exchange. One of the brightest bits of news to come out of Washington this past week is that the administration has filed for a rule change for that particular definition.
The Medicare Problem
We don’t know about employer plans, but we do know about Medicare – and it’s a disgrace. Anyone who thinks “Medicare for All” is a grand solution doesn’t know enough about Medicare. And anyone who thinks Vermont is particularly generous in health care for those with very low income doesn’t know about Medicare in Vermont.
The typical person turning 65 faces complex decisions about an array of options that will determine their coverage for the rest of their lives. Basic Medicare leaves someone with high-cost risk, because although 80% of costs are covered in general, there is no upper limit to what a person may have to pay. At a bit over $2,000 a year for “Part B”, what it does cover may be a good deal for the money, but this is already a steep price if you are on a low fixed income, and prescription coverage is extra. If you delay paying for Part B, a permanent increase of 10% a year in cost is imposed for every year of delay.
If you can afford another $3,000 or so a year, you can get very comprehensive “gap” insurance. You can also trade it all in for an “Advantage Plan” which ranges in cost from just your existing Part B premium to an added premium. Instead of having no limits on possible out-of-pocket totals, these limit them to a range around $7,500. Your provider network is also restricted. It is a good approach for some folks, but once you choose it and finish a trial period, you can lock yourself out from the full “gap” coverage option forever, or at minimum, are locked into paying a much higher premium.
The number I referenced at the start – that 64% of those on Medicare only have basic A and B coverage – is much scarier when you realize how unprotected those folks actually are. And here’s the issue if you are low income: if you at the very lowest end, you are eligible to have Medicaid on top of your Medicare. But if you are at the higher end of current Medicaid eligibility (in other words, still quite low income) and you turn 65, you lose Medicaid protection, because we change the standard to a lower income level.
You turn 65, and we drop you off the proverbial cliff – you become another of that subgroup of folks who end up paying as much as 20% of their income for health coverage. There is some assistance available to pay your premium, but Vermont offers a lot less than some other states. Our Household Insurance Survey only reviewed underinsurance among those under age 65, as if it was never an issue for those on Medicare, so we don’t know how many folks may be at this level of severe need. We have our heads in the sand.
To me, this is a huge affordability and access issue, and I pushed all last fall to include it in our Task Force study. Our consultants fell down on the job on it – which was the other reason I voted against adopting the report. This past week, my Health Care Committee voted out a bill that will focus on Medicare for the first time, looking at how to help Vermonters understand their options and what tools we may have, given that this is a totally federal program.
I pressed for an amendment that we added to this Senate bill, instructing our Department of Financial Regulation to review the “cliff” group, and what other states do to help. It might give us a first window on steps to address this particular inequity in accessible, affordable health care.
This is all only about regular health care, not about the costs of long-term care that isn’t covered at all by Medicare – a massive looming crisis as our population ages.
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Please contact me or Rep. Ken Goslant at any time with comments or input at adonahue@leg.state.vt.us or kgoslant@leg.state.vt.us. It is an honor to represent you.
All of my legislative updates are archived at representativeannedonahue.blogspot.com
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