Dramatic Cost Increases Expected for Some in VT Health Exchange

by Vermonters for Health Care Freedom

VT Exchange Plans Studied; More Work Needed . . .

On Thursday the Green Mountain Care Board received revised recommendations for the six Health Care Benefit Exchange plan designs, first presented last month and released to the public with much fanfare. At that time the Board asked for several analyses showing how the plan designs would impact specific individuals and families. Five scenarios were studied ranging from a 27 year old single pregnant woman with emergency complications in delivery, to a family of four where every member has either an acute or chronic health care need. All five examples featured unusually high users of health care services. The analysis shows that across the platinum, gold, silver and bronze plan levels out of pocket costs for deductibles, copays and coinsurance range from several hundred to over $6,000 per year, not including premiums.

Two critical questions were asked by members of the public in attendance. First, since the vast majority of insured individuals and families rarely require health care services at these levels, what would the costs look like for a more typical example where the insured required fewer services? And second, how do these out of pocket costs compare to those required by the most popular plans now in effect? Newsletter believes the Green Mountain Care Board should seek a much wider range of real-life examples and answer both of these questions before approving any plan designs.

Vermont has unfortunately outlawed private insurance plans outside the exchange, so starting in 2014 Vermonters will be forced to drop their current coverage and choose from among the extremely limited offerings now under consideration, and perhaps a few more. The Board and the public deserve to know what we will face when that day comes.

The DVHA revised recommendations are available for review here: http://gmcboard.vermont.gov/sites/gmcboard/files/PlanDesignRec_090612.pdf

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. . . But the Proposed Coverage will Dramatically Increase Costs for Some

On the second point mentioned above – how do these costs compare with those required under current insurance plans – an analysis performed by the state’s actuarial consultant dated June 25, 2012 provides some guidance. The analysis indicates that for the ‘silver’ plan levels – the level closest to where most government and private enrollees are now – some members will see cost share increases of up to 271% for emergency room visits, 255% for ‘preferred’ drugs and 457% for ‘non-preferred’ drugs. Of particular concern is the drug coverage for the non-preferred category because the requirement of 50% coinsurance at the platinum, gold and silver levels and 60% at the bronze level are much higher than the amounts required under Medicare Part D and most employer sponsored coverage.

The consultant’s presentation is available here, with the results mentioned above contained in a table on slide 17: http://dvha.vermont.gov/administration/hbe-silver-level-options-2012-06-24.pdf

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DVHA Seeks “Flexibility” in Mandatory Plan Designs

In Thursday’s presentation DVHA Commissioner Mark Larson made a new request of the Green Mountain Care Board. DVHA is now seeking the authority to ‘modify’ the Board’s approved plan designs in response to forthcoming federal guidance. In other words, the Federal Department of Health and Human Services will issue guidance on the types of plan designs states may require within the Exchange and the fear is the plans that have been recommended and are now under consideration at the Board may not quite meet the federal requirements. DVHA requested flexibility to adjust copays by up to $15, coinsurance by up to 5 percent and deductibles by up to $200. Changes of this magnitude may not sound like much but when applied to real world examples in the aggregate they can have a substantial impact on the total out of pocket exposure to the insured.

Newsletter suggests that a better approach would be to suspend action on the proposed plans until the federal government decides exactly what they will allow. Furthermore the federal government is expected to release a calculator that will estimate the actuarial value of various plan designs. If the estimates prepared by Vermont’s consultant disagree with the calculator, additional adjustments may be required.

Expectations that this suggestion will be embraced are not very high, given that the lack of a budget or funding plan for the $5 billion Green Mountain Care single payer program has not prevented the administration or the legislature from moving at warp speed to implement that program.

The DVHA request is on slide 10 of the presentation found here: http://gmcboard.vermont.gov/sites/gmcboard/files/PlanDesignRec_090612.pdf

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Watch This Number: 80,000 118,000

One more tidbit from the DVHA presentation. Commissioner Larson defended DVHA’s decision not to recommend inclusion of adult dental benefits for the reason stated here a few weeks ago – cost. Their analysis shows that depending on the level of dental services covered, costs to the State of Vermont could range from $16 to $87 million per year.

But contained on the summary slide was the following assumption: “Costs based on an estimated 118,000 Exchange enrollees in 2014.” An alert attendee at the meeting pointed out that all prior analyses assumed about 80,000 enrollees. Why did the number change? The answer was simply that further analysis has been done and this is the number that they are most comfortable with now. It may also change again in the future.

This represents an increase of nearly 50%. As Newsletter has explained in the past, the state stands to reap massive financial benefits from the federal government to help prop up Green Mountain Care single payer starting in 2017 if they can force large numbers of Vermonters into the Exchange in 2014, 2015 and 2016. The yet-to-be-released economics of Green Mountain Care will be improved if this number – 80,000 or 118,000 or whatever – is as big as possible.

VHCF will seek a more detailed explanation for the changed assumption to ensure that it is being driven by reasonable facts and not wishful economics.

The new assumption appears on slide 27 of the document at this link: http://gmcboard.vermont.gov/sites/gmcboard/files/PlanDesignRec_090612.pdf

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Brock Releases Health Care Plan

Gubernatorial candidate Randy Brock released his health care plan for Vermont this week. Not surprisingly, the plan begins with the repeal of Green Mountain Care single payer. Senator Brock has been one of the most outspoken and consistent critics of Green Mountain Care over the last two years.

The plan offers both vision and some specifics under the categories of adopting consumer-driven health care, empowering patients, protecting patients with reasonable rules, making health insurance understandable and encouraging clinical reforms.

The plan offers some real meat for those interested in a patient-centered alternative path to the shared goals of universal coverage and effective cost containment. It is available here: http://randybrock.com/health-care

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Health Care Outcomes and Costs Challenged in Canada

Troy Media published a column by Gwyn Morgan detailing reasons for Canada to reform their single payer government monopoly health care system. Morgan rebuts a defense of the government monopoly point-by-point citing evidence that government-forced rationing through excessive waiting times for critical services is killing Canadians and wasting money. On that last point he writes:

“Ontario is the poster boy for this reality. The Drummond report projects that spending on Ontario’s health care system, which already devours almost half of provincial spending, will rise to 80 per cent over the next two decades, leaving all other programs with an impossibly meager 20 per cent. The report’s authors wrote: “We challenge the government to open the door more widely for private sector involvement, not only to improve efficiencies, but also to capitalize on the huge economic potential in building a vibrant health care sector in Ontario.”

The need for Canada to join all other countries in allowing mixed public/private healthcare funding couldn’t be clearer. If we don’t act now, not only will those dependent on other government social programs face drastic cutbacks, but those counting upon no cost public health care will suffer ever longer waiting lists.” 

The Troy Media column is here: http://www.troymedia.com/2012/09/04/the-need-for-publicprivate-healthcare-in-canada-is-clear/