Health Care Debate Includes Many New Definitions
01/25/12 7:34AM By Bob Kinzel
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(Host) When we say "gold" "bronze" and "silver," we think about Olympic medals.
But this year, those words will have a new meaning.
They'll be part of the language of health care planning in the Vermont Legislature.
As VPR's Bob Kinzel reports, in order to understand the debate, we'll have to tune our ears to a lot of new definitions.
(Kinzel) The first concept that you're going to hear a lot about is the so called health care "exchange." Under federal law, all states are required to have an exchange up and operating by 2014.
The exchange is designed to be a marketplace where individuals and businesses can compare health care policies that have similar benefit packages. The idea is that competition will help keep premiums lower.
Under Act 48, the health care reform law that passed last year, Vermont's exchange must have "at least two" insurance carriers but Essex Orleans Senator Vincent Illuzzi is concerned that this will lead to very little competition:
(Illuzzi) "It's been clearly stated that the reason that they want only one or two policies and only be able to purchase those on the exchange is because it is a stepping stone to single payer."
(Kinzel) Michael Fisher is the chairman of the House Health Care committee. He says there are no limitations on the number of insurance companies that can be in the exchange:
(Fisher) "Any carrier that is interested doing business in Vermont believes it can make a profit or do good business here covering lives in Vermont can choose to offer a plan inside the exchange."
(Kinzel) Then there are the terms used to describe the various benefit packages that will be available. There's platinum, gold, and silver and if Illuzzi has his way a fourth category known as bronze.
Here's what these terms mean. For a platinum policy, the insurance companies will be expected to pick up 90 percent of the coverage costs and policy holders will pay 10 percent in the form of premiums, co pays and deductibles.
The ratio at the gold level is 80/20, and it's the 70/30 at the silver level. Some states are considering a "bronze" level where the ratio would be 60/40 but lawmakers excluded this option in last year's bill.
Illuzzi wants to bring the bronze level back so that larger companies can continue to offer high deductible, low premium, health savings accounts to their employees:
(Illuzzi) "A combination of those things has allowed them to really manage below the cost of inflation. As the bill has now been proposed by the Administration, health savings accounts are all but ruled out."
(Kinzel) Robin Lunge is the governor's director of health care reform. She says the bronze category was dropped last year because it created too great a financial exposure for policy holders.
And she argues that health savings accounts can still be offered at the "silver" level where insurance companies are responsible for 70 percent of the costs and:
(Lunge) "The consumer is responsible for 30 percent. So you can have at the "silver" level a high deductible plan with let's say a $1,500 or $2,000 deductible and that plan will have a premium which is on the lower side."
(Kinzel) There's also a disagreement over the definition what constitutes a small business. States are allowed to draw the line at either 50 or 100 employees.
The Administration has chosen the larger number to increase the size of the insurance pool but senator Illuzzi and several business groups are pushing for the smaller definition so that fewer businesses will come under the scope of the legislation.
For VPR News, I'm Bob Kinzel in Montpelier.