by Robert Maynard
Despite the best efforts of Vermont’s political leaders to destroy the private health insurance industry, Vermonters under 65 are opting for health savings account/high-deductible health plans at the highest rate in the nation. Back in 2005 the Council for Affordable Health Insurance and The Heartland Institute published a study entitled “Destroying Insurance Markets: How Guaranteed Issue and Community Rating Destroyed the Individual Health Insurance Market in Eight States.” Here is their take on the Vermont’s early 1990’s effort at health care reform:
Dean’s effort to make health insurance universally available in Vermont has in many ways backfired. What has really become “universal” in the state are high health insurance premiums and a heavy tax burden needed to support the growing number of Vermonters covered not by private insurance, but by government-run Medicaid. Moreover, the number of uninsured Vermonters has increased, not fallen, since Dean’s reforms took effect.
Guaranteed issue and community rating have wreaked havoc on Vermont’s small group and individual insurance markets, just as they have in states across the country. The percentage of the state’s population that is uninsured has actually increased since the mandates were imposed; premium rates have increased; and more Vermonters than ever are having to settle for government-run Medicaid in order to get insurance. Vermont is now second in the nation, after Tennessee, in the proportion of its under-65 population covered by Medicaid (21 percent).
Ironically enough, the failure of government controlled health care reform was used as an excuse to go further down the path of putting government in control of health related decisions. In 2009 the George Soros funded “Health Care For America Now“ did a study that linked high health insurance premiums to the lack of competition among insurers in Vermont. This study was used as an excuse to push for single payer with HCAN using Vermont as the tip of the spear for a national effort aimed at more government control over health care.
While our political class in Montpelier seems to be determined to drive private insurers out of the state and centralize health care decision making into the hands of the government, individual Vermonters seem to be opting for patient choice at a higher rate than the national average. In January 2013 a census showed the growing number of people covered by Health Savings Account/High-Deductible Health Plans (HSA/HDHPs). This is an approach that allows patients to invest their money in accounts to be used for health care related issues. They would pay a low premium for a high deductible plan that covered major issues, but pay for everyday care out of the health savings account. That would leave the decisions making process on many health related issues strictly between a patient and his/her doctor. For those under 65, Vermonters have chosen this option at a rate higher than any other state in the country: “States with the highest percentage of HSA/HDHP enrollees among their under-65 populations with private health insurance were: Vermont (15 percent), Minnesota (14 percent), Utah (12 percent), Montana (12 percent), Illinois and Connecticut (10 percent).”
Again, the attraction to HSAs is related to patient choice and decision making control: “The funds in the HSA are owned by the individual and may be rolled over from year to year.” The realization of what is driving this trend has prompted insurance companies to further maximize choice: “Many health plans offering HSA-qualified HDHPs have created online tools to help members manage their HSA accounts online, access information about their health conditions and medical services as well as health care costs (e.g. negotiated rates for procedures and drugs), and obtain clear information about the cost and quality of health services in their area.” It is our government leaders who seem to be oblivious to the expressed preference for patient choice on the part of a growing number of Vermonters. On the other hand, our political leaders may very well be aware of the preference, but figure that the they know what is best for the rest of us. Ignorance can be cured by information, but such arrogance presents a much bigger problem.