House Health Care passes expansive health reform bill

This week the House Health Care Committee took decisive action to make health care in Vermont more affordable, accessible, and equitable. The Committee voted 7-2-2 to fund a wide-sweeping package of health care reform initiatives, funded with a 0.3% payroll tax and a two cent-per-ounce tax on sugary drinks.

One of the most notable initiatives funded by the committee is increasing Medicaid reimbursement rates to bring them closer to the actual cost of care. Currently Medicaid pays about 50 cents for every dollar of care, and folks who get private insurance though their employers or Vermont Health Connect are left to pick up the difference. A benefit of moving to more equal payments is that people with private insurance will see a reduction in premium costs. To achieve this goal the bill leverages tens of millions of federal dollars to more than match the state’s investment.

Increased Medicaid reimbursements could also help more Vermonters access care. Right now it is sometimes hard for folks on Medicaid to find doctors who will take their insurance. Bringing Medicaid rates closer to the actual cost of care will incentivize more providers to see Medicaid patients.

The bill also makes health care more affordable for Vermonters who receive subsides for their Vermont Health Connect plans. The bill brings all plans for people up to 300% of the poverty level ($35,000 for an individual, $72,000 for a family of four) to an 87 percent actuarial level. The practical impact of this change is that when these individuals go to get care, their insurance will cover approximately 87 percent of the costs.

Another important aspect of the bill is that it funds future work of the Green Mountain Care Board to reform the health care system. The funding would allow the board to go forward with their work to set consistent pricing in our health care system and to develop plans to transition our system from one that pays providers for the value of care, not the volume of care. If these initiatives are successfully implemented the state could see billions of dollars of savings over the next decade.

Finally, the bill requires the board to examine how to make health care price information available to consumers. Currently, it is difficult for consumers to find out the price of their care until they get their bill. Insurance providers and the Board currently have access to the information that could inform consumers about these prices. The bill requires the Board to report to the legislature by October on how they will make this information available to consumers.

To pay for these investments the committee adopted two funding sources. The first funding source is a 0.3% payroll tax on Vermont business. The second source of funds is a two cent-per-ounce tax on sugary beverages. The tax on sugary beverages accomplishes two goals simultaneously by raising funds for necessary health care investments, and helping to curb consumption of beverages that are responsible for a wide verity of major public health problems including obesity and diabetes.

The bill now moves to the House Ways and Means Committee where they will focus on funding sources proposed in the bill.