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Lawmakers: Health reform is on track, but new taxes loom

SHOREHAM — “It’s been extraordinarily frustrating,” Rep. Diane Lanpher said of Vermont Health Connect’s track record to date. The Vergennes Democrat gave those remarks during a discussion with other local lawmakers of the state’s health care exchange at a Legislative Breakfast in Shoreham Monday morning.
“What started as really good policy at the federal level could not be rolled out in a way that … met where the policy was going,” Lanpher added.
Gov. Peter Shumlin has already recommended the state pull the plug on Vermont Health Connect (VHC) and let the federal government step in, if organizers cannot correct glitches in the VHC website and health insurance outreach effort. State health care exchanges are among the mandates of the federal Affordable Care Act.
Lanpher said the recurring technical problems with VHC have unfortunately soured people’s attitudes toward health care reform.
“This very disappointing result has forced all of us to take a little pause in having confidence to do big and bold things,” she said.
But lawmakers have been buoyed by the performance of a company called Optum that was called in to take over the operation of VHC, according to Lanpher. A company called CGI had been in charge of Vermont Health Connect rollout. She expressed confidence now that Lawrence Miller — the founder of Middlebury-based Otter Creek Brewing — has been put in charge of spearheading the state’s health care reform effort.
“I have a great deal of confidence in Lawrence and his business ability,” Lanpher said.
And business acumen will be essential in furthering VHC, as the federal funding pipeline — which had funneled $200 million for VHC, to date — is closing, Lanpher noted.
“Beginning Jan. 1, 2015, the state has had to take on a lot of the operational costs,” she said.
Still, Vermont continues to be in a better position in complying with the Affordable Care Act than other states, she added.
“Other states that chose to not build their exchanges … they are scrambling now to put in bills to try and build this,” Lanpher said. “They are not going to be able to do that in the time frame they want to. And they are not going to have any federal assistance with that.”
Lanpher believes the state’s difficulties in establishing VHC could provide a valuable lesson to those states that are not as far along in designing their respective health care exchanges.
Rep. David Sharpe, D-Bristol, provided a reminder that there are some more looming financial challenges associated with health care. He said the ACA includes an excise tax provision or penalty for insured groups benefitting from so-called Cadillac insurance policies.
“The requirement was put into the Affordable Care Act that plans could only be so generous — 87 percent of actuarial value,” Sharpe said. “What that means is of the whole group — if Vermont, for example, were one group — that the insurance would only pay 87 percent of the cost and the members of that group, one way or another, would pay 13 percent.”
But right now, 65 percent of Vermonters are covered by plans exceeding that 87 percent actuarial threshold, according to Sharpe. Among those vulnerable to the excise tax are the state of Vermont and local school districts, due to the health care policies they offer.
“This is a huge problem for school boards across the state,” Sharpe said. “I am determined to find a way to deal with this federal excise tax so we can move forward with teacher contracts in a way that school boards don’t end up seeing what I understand to be a fairly hefty federal tax just for offering decent health care to their employees.”
Reporter John Flowers is at johnf@addisonindependent.com.

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