Shap Smith: Health care reforms a top priority

MIDDLEBURY — Education finance reform and the estimated $112 million revenue shortfall continue to get the most attention in Montpelier, but Vermont House Speaker Shap Smith said he and his colleagues are committed to passing health care reforms aimed at closing the cost-shift in Medicaid funding and recruiting more primary care physicians to the state.
Smith was speaking on health care issues at Porter Medical Center’s annual meeting on Monday at Middlebury College’s McCardell Bicentennial Hall.
The Morrisville Democrat updated the assembled medical professionals on a health care reform effort he acknowledged looks much different now than folks had expected just a few months ago. It was in December that Gov. Peter Shumlin pulled the plug on the state’s move to a single-payer health care system after the release of a report showing the cost to be beyond the means of Vermont taxpayers.
At the same time, Smith said provisions of the federal Affordable Care Act (ACA) and Vermont Health Connect — the state’s health care exchange — have been taking effect, with glitches along the way.
“Let’s be candid, that (Vermont Health Connect) roll-out has been a real challenge, and that’s probably as charitably as I could describe it,” Smith said. “I think it has diminished people’s confidence in whether government is able to engage in the larger purpose of health care reform.”
But Smith stressed that the state’s health care financing problems have not been solved as a result of the decision to at least table the transition to a single-payer system.
“We still find ourselves with a health care finance morass,” Smith said.
That morass, he noted, is largely a product of the federal underfunding of Medicaid and Medicare services. As a result that is threatening the financial stability of some hospitals and physicians’ practices by shifting the burden to them; they must cover services for the poor and elderly without being fully reimbursed by the government for the full cost of those services.
Smith pointed out that his spouse, Melissa Volansky, is a family practice physician who leads a Federally Qualified Health Center. And he also gets frequent updates from throughout the state on the challenges facing the medical community. The biggest challenges in Vermont, according to Smith, include:
•  The transition to Vermont Health Connect by people who used to be covered under other Vermont health care subsidies — such as the Vermont Health Access Plan and Catamount Health.
“They are facing significantly higher premiums or co-pays that are causing some concerns about people’s ability to access care,” he said.
•  The growing shortage of primary care physicians. The latest statistics show that Vermont is more than 100 physicians short of meeting the demand for primary care services.
“It is actually a problem that exists throughout rural America,” Smith said of the shortage. “We are still facing an emptying out of rural America and people are still migrating toward urban and suburban cities.”
•  The Medicaid cost-shift.
“It is a significant hidden cost in your premiums,” Smith said. “It is a challenge, particularly for health care institutions that have large populations of Medicaid patients. You are providing care for people at a cost that does not support your cost structure.”
Lawmakers, Smith said, are trying to address the challenges he cited at Monday’s Porter gathering.
As an example, he said, the House Health Care Committee last week endorsed a 2-cents-per-ounce tax on sugar-sweetened beverages that he said would raise more than $20 million annually.
That money, he said, would be used for subsidies for low-income citizens transitioning to ACA health insurance plans, for more reimbursement money for primary care providers and the state’s Blueprint for Health initiatives, and for more resources to apply to recruiting primary care providers to Vermont.
Smith conceded that the proposed tax on sugar-sweetened beverages has generated controversy. But he said House Health Care Committee members pointed to the tax’s dual benefit of generating more health care dollars while also discouraging the purchase of sugary drinks.
The Health Committee bill also included a proposed payroll tax of 0.3 percent to decrease the Medicaid cost-shift.
“I have gotten a lot of grief for supporting the payroll tax,” Smith said. “That’s fair. I told a reporter that if I still had as friends my wife and two children at the end of the session, I would have been successful in this session, because I think this could be a pretty rough one, overall.”
But Smith said the current Medicaid cost-shift is in reality a hidden tax that people pay through their private insurance premiums. A payroll tax, he argued, would get it out into the open.
“The question is, do we want to have a hidden tax or do we want to have a rational tax?” he said. “Do we want to rationally see how we’re going to reimburse things, or do we just want it hidden? That’s a choice that we’re going to have to make. It may be that people would rather have the hidden one and pretend that there’s no tax. I happen to think that’s not fair.”
Maintaining the Medicaid cost-shift, Smith said, will continue to deter primary care physicians from establishing practices in Vermont.
“I think this is something that we should all be concerned about,” Smith said.
But not all of the state’s health care news is bad, according to Smith. He pointed to statistics showing that more than 96 percent of Vermonters have some form of health insurance, either publicly financed or private coverage.
“That means 3.7 percent of Vermonters are uninsured,” Smith said. “The national average is around 12 percent.”
Smith believes the state should celebrate its proximity to universal coverage.
“When you think about what’s happening in many other states that have refused to engage on the ACA, I think we can be proud of ourselves,” Smith said. “I am very disappointed when I talk to my colleagues (in other states) who refuse to authorize Medicaid expansions, because when they do that, they are basically denying access to health care to people who are between 100 percent and 130 percent of poverty. These are people who … are too ‘rich’ to qualify for Medicaid and too poor to get the subsidies under the ACA.”
Smith added he’s pleased that Vermont’s rate of health care inflation — particularly the rate of hospital inflation — is “significantly down. I think that is a testament to not only the regulatory framework, but the good work the hospitals are doing.”
Reporter John Flowers is at [email protected].

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