Lawmakers consider plans for the underinsured

12/13/07 7:50AM By Bob Kinzel
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(Host intro) When lawmakers return to Montpelier next month, they'll consider several proposals to expand state health care programs.

While previous plans have focused on uninsured Vermonters, the new efforts will target the underinsured - people who have expensive policies and huge deductibles.

As VPRs Bob Kinzel reports in this week's series on the Future of Health Care.

(sound of legislature adjourning)

(Kinzel) Catamount Health, the plan to cover more of the uninsured in Vermont, was passed only after a difficult legislative compromise.

There's talk about expanding health care programs in 2008, and to win approval, Democrats and Republican Governor Jim Douglas will most likely have to join together once again.

A special Commission on Health Care Reform wants to offer affordable coverage to small businesses that have expensive, catastrophic policies.

The Commission hopes to reduce costs, in part, by requiring all employees to enroll in wellness and disease management programs.

Mendon Rep. Harry Chen is a member of the Commission:

(Chen) "We understand that large businesses have an advantage obviously in what they're able to offer their companies and it's the small businesses that really have the challenge in the small group market of paying very high premiums and not getting much in terms of health care coverage."

(Kinzel) This expansion is projected to cost between 7 and 15 million dollars - the Commission hasn't identified a revenue source to pay for it.

Not everyone wants to expand the state's role. John McClaughry is the president of the Ethan Allen Institute - a free market think tank located in the Northeast Kingdom.

McClaughry blames the current health care crisis on a law passed in the early 1990s that imposed a community rating system in Vermont.

This system requires insurance companies to charge the same premium regardless of a person's age or health condition. Before community rating, rates for young, healthy people were much lower.

McClaughry says this law drove most health insurance companies out of the state. He says repealing community rating will make coverage much more affordable for many Vermonters:

(McClaughry) "The point is when you insure against risk you can't exclude major risk factors from the underwriting process or you'll be economically unreal and if you gave a 40 year old's premium to a 70 life insurance customer you'd be broke pretty soon well you can legislate away the realities of life."

(Kinzel) To date, Democratic legislative leaders have shown no interest in repealing the community rating law because they say it would dramatically increase premiums for many older and less healthy Vermonters.

At the same time, there are some people who want the state to get more involved in health care. Deb Richter is a Cambridge physician who strongly backs a new bill that would provide all Vermonters with hospital coverage -it would be financed using state tax dollars:

(Richter) "Premiums could be cut by 40 % everyone would be guaranteed hospital care so you would never have to worry if you had an appendectomy you were going to lose your home."

(Kinzel) Bea Grause is the president of the Vermont Association of Hospitals and Health Systems. She argues that this legislation won't save any money - it just changes the financing.

Grause also has concerns about expanding Catamount because she's worried that the projected cost savings of the program won't materialize before it incurs huge deficits:

(Grause) "I think as they are looking to make changes to Catamount health I think they need to be very mindful of the reality that our health care system in the long term is built on a financial house of cards."

Middlebury Rep. Steve Maier is the chairman of the House Health Care committee.

He agrees that health care inflation must be reduced if state coverage is to be expanded:

(Maier) "The affordability issue will hit us as a state government just as strongly as it hit other businesses and individuals if we can't get a handle on these costs."

(sounds of the Bridge Street Café)

(Kinzel) So how will what happens in Montpelier affect a small business ?

So we return to the place where we started this series the Bridge Street Cafe in Richmond. Owner Marvin Carpenter is sitting at table in the corner expressing enormous frustration with his current situation. A year ago he provided his 7 employees with health care insurance. At the time, he could only afford a policy with a very high deductible.

He thought he was doing something good for his workers - now he's not so sure.

That's because this fall, the state began offering a much better benefit package under Catamount Health, at a lower cost, but the Café's employees aren't eligible for Catamount because the program requires most individuals to go a year without coverage before they can sign up.

The health care crisis has caused Carpenter to rethink his feelings about the role of government in providing coverage:

(Carpenter) "I have never been a proponent of big government programs but health care has just gone crazy it's out of control the normal person can't handle it anymore.........and they need to come up with some way for small businesses to be able to tap into this."

Carpenter will keep a close eye on the health care debate this winter. He hopes lawmakers will find a way to help his employees.

For VPR News I'm Bob Kinzel.

 

AP Photo/University of Vermont

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