Cost of health care transistion is still unclear

WHITING — With 2017 fast approaching, Addison County residents are pressing lawmakers to estimate the cost of Vermont’s proposed conversion to a single-payer health care system. Act 48, passed by the Legislature in 2011, called for a detailed plan for a single-payer health system by 2017, and a financing scheme was due last year.
“We’ve been promised that we were going to understand the funding mechanism for this for a long time — how much it is going to cost,” said Larry Rogers, one of around 30 people who attended Monday’s Legislative Breakfast in Whiting. “Do any of you feel you will have anything concrete before the elections this November, or is this something that is going to be put off?”
Legislators at the breakfast replied they don’t yet have the cost information — though it is likely to be in the “billions” — and it might not be ready for a while. Sen. Claire Ayer, D-Addison and chairwoman of the Senate Health and Welfare Committee, said the General Assembly is expecting a “financing proposal” from the Shumlin administration by early 2015.
“We won’t know anything definite, I think, before the elections,” Ayer said. “What we are trying to settle on right now is a number; how much revenue would we have to raise from taxes to replace what we now pay in (health) insurance), for those of us who still buy insurance for ourselves or have it for our employees.”
And Ayer said cost estimates will only become clear once Vermont is certain of the range of health care it will be buying.
“There are going to have to be some limits on what we decide we want to pay for — what would be in the health care package,” Ayer said. “We can’t do everything.”
At the same time, Ayer said lawmakers don’t want to start out with a cost estimate and pre-determine what will be covered by a payroll tax or luxury tax or other financing mechanism.
“We need to know who the taxes hit,” Ayer said. “We don’t want to burden people who are already struggling, people who are poor or who are on fixed incomes more than we would burden people who are comfortable.”
Vermont, like other states, is going through the growing pains of implementing a health insurance exchange mandated through the federal Affordable Care Act. The resulting Vermont Health Connect provides an insurance network through which individuals and small businesses are currently selecting coverage. Low-income citizens can qualify for subsidies to help buy their insurance through the exchange.
But state lawmakers want to take Vermont a step further — to a single-payer health care system, which the Legislature would like to see in place by 2017. Ayer explained the new system would be contingent on the federal government allowing Vermont to control the health care subsidies — such as Medicare and Medicaid funds — that are currently used to assist Vermonters.
“We want to propose to the government, ‘Give us all that money you would have given us before … and let us run our own health care program for the same money,’” Ayer said.
Rep. Willem Jewett, D-Ripton, said Vermont can’t sustain the current health insurance system, which is consistently producing annual premium increases that exceed inflation.
“Right now, we are paying roughly $1 out of every $5 of economic activity in the state to go to health care,” Jewett said. “That number has been increasing unrelentingly for decades.”
He said the Affordable Care Act will prove futile unless states get control over health care costs.
“We cannot sustain 20-percent — and growing — of gross state product,” Jewett said. “For me, the stress is the sheer cost.”
Reporter John Flowers is at [email protected].

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