MIDDLEBURY — The Senate Health and Welfare Committee this week will begin reviewing a House-passed measure to establish a federally mandated “health benefits exchange” that would, according to proponents, make health insurance more accessible and affordable in Vermont.
At issue is H.559, a bill that according to Rep. Mike Fisher, D-Lincoln, would enable Vermont households (making up to $92,200) to tap into federal tax credits to help purchase health insurance. The health benefits exchange would also ensure that no household making $56,625 or less would pay more than 9.5 percent of its income for health insurance.
“The combination of this bill and the (federal) Affordable Care Act … will lead to a real change in insurance products for Vermonters and for Vermont businesses,” Fisher, chairman of the House Health Care Committee, said. “After 2014, businesses under 50 (employees) have a new freedom to both make sure that their employees are covered and shed the responsibility of keeping up with double-digit increases in premiums every year.”
Passed by the Vermont House late last month by an 88-38 tally, H.599 sets up a health benefits exchange that would specifically:
• Allow customers to enroll in “qualified health plans” online, by phone or by mail, using a uniform paper form. Qualified health plans are ones that provide the essential health benefit package set forth in the Affordable Care Act. Those essential benefits must include emergency care, maternity and newborn care, laboratory services, prescription drugs, mental health care and hospitalization.
• Provide service to citizens who do not have employee-sponsored insurance and small employers (50 workers or less) that offer coverage to all full-time employees.
The Shumlin administration estimates the exchange could include as many as 96,000 Vermonters. Health benefits exchanges must be operational in all 50 states by Jan. 1, 2014.
The new law imposes deductible limits for individual and family plans.
But Fisher believes the new system would save employers — especially the smaller ones that already provide health benefits — a lot of money.
“The estimate is that small businesses in Vermont spend $98 million a year on premiums,” Fisher said. “Many of the individuals covered by those premiums will do better going through the exchange as individuals, rather than getting their health care through business plans.
“I want businesses and entrepreneurs to focus on what they do best — create jobs,” he added. “I feel happy to help bring about a change where they can be freed up from dealing with the burden of health insurance.”
And Fisher said the exchange will make individuals’ health care premiums more predictable.
For example, he presented a chart showing that an individual with an annual income of $25,000 would have a premium of $132 per month. That premium escalates gradually based on income up to $44,000 for an individual ($354 per month), according to Fisher. Federal tax credits would flow to the insurance company to make up the difference of the true cost of the policy, Fisher said.
“The exchange will offer some new flexibility for individuals to define what kind of coverage they want,” Fisher said. He noted that clients would be able to switch from a low-cost premium/high-deductible policy to one with a high-cost premium/low deductible.
And he stressed that the insurance carriers involved in the exchange would be private enterprises, and that people happy with their current health insurance polices or Medicare would not be required to join the exchange.
Fisher acknowledged that the exchange is not without controversy. Critics, he noted, have wanted to give businesses the option of choosing providers outside of the exchange.
But Fisher disagrees, saying the exchange — aside from being a federal mandate — will protect consumers from rapid spikes in premiums and from being suddenly dropped by companies.
“It brings more people into a shared risk pool,” Fisher said. “It creates a bigger, more stable pool.”
It will also create financial equilibrium for health care providers, according to Fisher.
“It is moving people for whom reimbursement for care is below cost into a marketplace where reimbursement is negotiated between the carrier and the provider,” Fisher said. “It will increase reimbursement for doctors and reduce the cost-shift.”
The bill now goes to the Senate, where Health and Welfare Committee Chairwoman Claire Ayer, D-Addison, will get a close look at it. She said her panel will consider the health care aspects of the bill, while the Senate Finance and Appropriations committees will examine its financial implications before bringing a recommendation to the full Senate.
“I don’t think there will be much controversy between the House and the Senate on this,” Ayer said.
Gov. Peter Shumlin is a strong backer of the legislation.
Reporter John Flowers is at [email protected]