State Legislator Says Health Care Proposal Will Shift Costs To Private Policies
01/31/11 5:50PM By Bob Kinzel  Download MP3
(Host) There's concern at the Statehouse that some of Governor Peter Shumlin's health care budget proposals will increase rates for people with private health insurance policies.
Shumlin says his plan will have a small impact on private policies, but he says his approach is needed because Vermont's health care system is broken.
VPR's Bob Kinzel reports:
(Kinzel) Franklin County senator Randy Brock says he's concerned about two elements of the Governor's budget. The first is a package of new taxes on hospitals, dentists, nursing homes and managed care organizations.
The second is the Governor's decision to end Catamount Health Care and transfer its 12,000 enrollees to the state's Medicaid program, known as VHAP.
This change will dramatically lower payments to health care providers and increase deductibles for participants.
Brock says these proposals will shift costs over to private insurance companies because the state's health care system has to recoup this money from somewhere, and in past years, private policies have been the source:
(Brock) "Those providers, the insurance companies, the dentists, can't get the money back from Medicaid billings and so I think it is going to increase the cost shift. It's going to increase the cost of health care. The other issue that we see also is the VHAP plan pays providers substantially less. I think that will place further burdens on providers and again increase the cost shift to private insurance plans."
(Kinzel) The Governor acknowledges that his plans will increase the cost shift to private policies but he thinks the overall impact will be small.
(Shumlin) "There's no question that I'm not doing anything to help the cost shift. And as I've said many times, if we stick with the current system that we have we will bankrupt ourselves...I plead guilty to my contribution, although it's small to the overall problem."
(Kinzel) Shumlin says Catamount needs to be terminated because it's not financially sustainable.
(Shumlin) "Is it a failure? Well sure. It's a failure in containing costs, it's a promise that can't be kept unless taxpayers find endless money somewhere that we don't think they're going to find. The stark reality is our health care system is broken. When you're spending a million dollars a day in this little state more than you were the day before - that's broken."
(Kinzel) Senator Brock wonders if the Governor's approach is really an effort to make the status quo as unattractive as possible.
(Brock) "Whether or not this is an attempt by the Administration to simply make it more difficult and more costly - more difficult for providers to provide care and more costly for people who use the health care system - as a means to push us further towards a single payer... that's I think a distinct possibility here."
(Kinzel) Administration officials say there is no truth to Brock's assertions and that the changes reflect the need to totally transform the state's health care system.
For VPR News, I'm Bob Kinzel in Montpelier.