‘Exchange’ Recommendations Severely Limit Plans Available to Vermonters
The Department of Vermont Health Access has presented to the Green Mountain Care Board its recommendations for insurance plan designs under Vermont’s mandatory Health Benefits Exchange. A couple of weeks ago DVHA presented their recommendation for the benefits the Exchange plans should cover, and on Tuesday they proposed the combination of deductibles, co-pays and coinsurances they think the plans should require. Plan premiums would be determined by the participating insurers once final benefits and designs are approved by the GMC Board.
The Exchange is being created under the federal Affordable Care Act but in Vermont it is only a transitional step toward the government monopoly Green Mountain Care single payer program, scheduled to start in 2017. Pursuant to both federal and state law, four levels of plans are being proposed, nicknamed for metals. ‘Platinum’ plans are designed to cover 90% of the cost of health care services, ‘gold’ plans cover 80%, ‘silver’ plans cover 70% and ‘bronze’ plans cover 60%. The insured is expected to cover the remaining percentage under each plan.
But with deductibles, copays and coinsurance there are multiple ways to structure each plan level to achieve the desired coverage percentages. On Tuesday DVHA made its recommendations for the number of plans and mix of deductibles, copays and coinsurance. Included are 1 platinum plan, 1 gold plan, 2 silver plans and 2 bronze plans. In addition, DVHA is proposing to allow insurers the opportunity to offer one “Choice Plan” at the gold, silver and bronze levels. “Choice” designs will allow insurers more flexibility in plan design but will require that certain parameters be met. A discussion of what these parameters might require or allow will take place on September 6th.
Several concerns jump off the page. The first is, why so few options? The consultant who prepared the analysis examined and presented 13 different plan designs and there are currently 50 plans available to the small group market in Vermont, according to the 2011 BISHCA “Vermont Consumer Handbook.”
Why is there only one platinum option and no “Choice” opportunity within this level? Certainly there are a wide variety of options for subscribers within the ‘richest’ category of plans.
According to written summaries of stakeholder comments during the deliberative process leading up to these recommendations, Blue Cross Blue Shield of Vermont stated several times that the most popular plan in the small group market offers a $2,500 deductible and that there are a very large number of employers and individuals who use Health Savings Accounts (HSAs) as a means of mitigating the exposure to the deductibles and giving subscribers more control over their health care dollars. In fact, Vermont leads the nation in participation in HSA based plans at nearly 20% of all insured. So why is the highest allowed deductible capped at $2,000 for an individual?
The federal Affordable Care Act places limits on the deductibles allowed in Exchange plans of $2,000 for individuals and $4,000 for families. With an HSA, the employer or subscriber can select a higher deductible, but must make contributions sufficient to meet these limits if the plan is offered thorough the Exchange. In other words, a $2,500 deductible can be offered but only if the employer contributes at least $500 to the employee’s HSA. But the federal Employee Retirement and Insurance Security Act (ERISA) prohibits states from ordering employers to offer these HSA-type benefits. So the state cannot offer a state-mandated plan in the Exchange that matches the most popular plan design currently in the market.
Newsletter hopes that the recommendation to allow “Choice” plans will reopen the opportunity for these plan designs in Vermont. But the situation illustrates the folly of the Shumlin Administration’s demand that the legislature outlaw the private health insurance market outside the Exchange. Everywhere else in the nation limitations on the plans offered within the Exchange will not prevent anyone from keeping their current health insurance plan, because the private insurance market will continue to exist. Only in Vermont will we be forced to drop our existing coverage and select from the very limited options within the Exchange.
The next questions are how well do these combinations of cost sharing options match up with the plans now available in the marketplace, and how will the insurers rate each design to determine the premiums they will require. The Green Mountain Care Board has scheduled a meeting on September 6th running from 10:00 am to 5:00 pm, and a good part of the meeting will be devoted to a discussion of these recommendations.
A 2-page summary of the DVHA recommendation is available here: http://gmcboard.vermont.gov/sites/gmcboard/files/HB_ExcPlanDesign_Overview082112.pdf
A series of tables showing the various combinations of deductibles, co-pays and coinsurances analyzed for DVHA consideration is here: http://gmcboard.vermont.gov/sites/gmcboard/files/Plan_Designs_20120821.pdf
A copy of the PowerPoint presented by Robin Lunge to the Green Mountain Care Board containing DVHA’s recommendations is here: http://gmcboard.vermont.gov/sites/gmcboard/files/Plan_Design082112.pdf
The VTDIgger report is here: http://vtdigger.org/2012/08/22/details-emerge-on-cost-of-health-care-plans-under-the-vermont-exchange/
Single Payer Advocates Cranky over Administration Recommendations
Advocates for single payer health care are finding a good deal to dislike in the Shumlin Administrations’ recommendations for benchmark essential health benefits and plan designs within the Health Benefits Exchange. A few weeks ago the Department of Vermont Health Access (DVHA) recommended Blue Cross Blue Shield of Vermont as the benchmark for basic health benefits to be provided by all plans offered through the mandatory Vermont health Benefits Exchange. Immediately following the announcement advocates decried the failure to include adult dental care as a mandated benefit, and organized a campaign to encourage the Green Mountain Care Board to include them in their final decision.
The problem facing the administration is money. The federal Affordable Care Act guarantees subsidies for low and middle income folks who purchase insurance through the Exchange. If Vermont adds a required benefit to the preexisting mandatory list Vermont must provide the subsidy, which in the case of adult dental benefits would be enormous.
This week DVHA presented their recommendations for insurance plan designs (see article above). The six mandated plans contain a variety of deductibles, copays and coinsurance requirements, almost none of which are sitting well with the advocate community. One attendee at the presentation said “the advocates were criticizing everything.”
The problem stems from the fact that the single payer advocates have convinced themselves – and too many others – that universal health care should be free. So when they are confronted with the reality that every benefit carries a cost and that those costs are reasonably reflected by the current insurance market we get a visceral reaction. “Just fire all those fat cat insurance CEOs with $9 million salaries,” or, “Just get rid of all that duplicative private insurance overhead and replace it with a perfectly efficient government bureaucracy,” or, “Just tax the rich,” echoes from the ranks of the advocates when forced to face economic reality.
It would be particularly helpful if the Shumlin Administration would present an actual baseline budget for Green Mountain Care and propose how Vermont might find the approximately $3 billion needed to pay for it. This is the economic reality we should have confronted before starting down this path and had we done so Newsletter contends our expectations would be dramatically different today.
Canadian Study Shows U.S. Best at Bringing New Oncology Drugs to Market
A new study by the Canadian Fraser Institute compares approvals of new oncology drugs in Canada, the United States and European countries, and finds that the U.S. has the best performance. This is consistent with cancer mortality rates reported in a Concord study from 2008 which show that for high incidence cancers U.S. residents have the highest survival rates – dramatically better than many socialized medicine nations.
John Goodman’s Health Policy Blog summary is here: http://healthblog.ncpa.org/single-payer-drug-coverage/
Fraser Institute report is here: http://www.fraserinstitute.org/research-news/display.aspx?id=18744
Concord study results table is here: vthealthcarefreedom.org/sites/default/files/Concord study Cancer Mortality Table.jpg
Vermont’s Government Takeover of Health Care Getting Attention Down South
The New South Conservative published a short piece by Curtis Coleman asking “Are We All Headed for Vermont?” No, he was not speaking about vacation destinations – we are talking about the direction of national health policy:
“The State of Vermont gives us a glimpse into that frightening future. In May 2011, the State created the Green Mountain Care Board and gave the Board the power to take over responsibility for virtually every aspect of health care in the State. The Board is authorized (and this should give you flu-like chills) to improve “the health care of Vermonters through a variety of regulatory and planning tools.”
The New South Conservative opinion piece is here: http://031331b.netsolhost.com/blog1/2012/08/15/are-we-all-headed-for-vermont/
Does the Government Own Doctors?
Dr. Hal Schertz published a commentary on Townhall.com titled, “Obama Says: Doctor, You Did Not Graduate from Medical School.” Schertz maintains that the structure of the ACA and the president’s statements belie a philosophy that treats doctors as a resource created by the government and not through the individual effort, sacrifice and achievement of the doctors themselves.
“Obamacare is rooted in this philosophy. The doctors who are being counted upon to care for patients are merely footnotes in this massive new bureaucracy. The healthcare system is being turned upside down with the federal government in charge of deciding who gets what kind of care, by whom, where and how much they will pay for it. Those who engineered Obamacare believe that they can do this because they feel that they own a piece of every doctor in America and that the government has a right to this work. . .
On the current path, the worst is yet to come. Doctors are quitting in anticipation of government controlling their practices. Doctor shortages are here, but will soon reach epic proportions. Covert rationing of care is coming because there will not be enough doctors to see patients.”
Vermont has taken this view to the extreme through government monopoly Green Mountain Care, and the doctor shortages predicted by Schertz are likely to be felt first and most powerfully here.
Townhall.com commentary is here: http://townhall.com/columnists/halscherz/2012/08/18/obama_says_doctor_you_did_not_graduate_from_medical_school
Another Call for Reform of Canada’s Single Payer Government Monopoly Health Care
Canadians continue their debate over whether their government monopoly single payer health care system is ready to be reformed. The Globe and Mail published a commentary by Gwen Morgan titled, “Politicians must heed the public need for two-tier health care” calling for the government to embrace allowing providers to offer services outside the government operated system and patients to pay for these services directly.
Illustrating this need Morgan retells the story of Vancouver Dr. Brian Day who is suing the province for ordering him to cease the practice of providing services and billing patients directly. Morgan writes:
“Supporting Dr. Day’s lawsuit are four patients who received treatment at his clinics after suffering long waits in the public system. One of those patients is 36-year-old Mandy Martens, who was told she would have to wait nine months for a colonoscopy after blood was detected in her stool and an ultrasound detected three masses in her liver. After an expedited colonoscopy at Dr. Day’s clinic confirmed metastasizing colon cancer, she was finally able to access lifesaving treatment.”
Vermont’s Green Mountain Care single payer health care monopoly is modeled after the Canadian system, and VHCF continues to encourage policy makers and Vermonters at large to become educated about the problems plaguing that system.
The Globe and Mail commentary is here: http://www.theglobeandmail.com/report-on-business/politicians-must-heed-the-public-need-for-two-tier-health-care/article4477825/