Small Businesses have valid concerns about VT’s Health Care Exchange

by Shawn Shouldice

The Shumlin administration announced cheerfully last Tuesday that it had received an $18 million federal grant to build a health care exchange as part of its plan to replace the private insurance market with a system managed entirely by government. Under the single carrier “exchange” envisioned by the Governor, private insurers would be forced out of the health care business. This would be the first step to his promise that Vermont consumers would have access to an online selection of options, and all health care providers would be reimbursed by a new government-run payment system.

The soaring cost of health care in Vermont and across our nation has given political momentum to the single-payer model. Indeed, the cost of health care in the U.S. is substantially higher than anywhere else and, according to most of the data, the medical outcomes are not correspondingly better. There is no doubt that the current system is encumbered by inefficiencies. Many experts would argue, however, that they are caused by the very sort of government interference that Vermont is pursuing.

Nevertheless, we are hurtling toward the unknown.

NFIB\VT agrees with single-payer advocates who argue “doing nothing is not an option.” But the single payer boosters also argue that private insurance companies spend dollars on marketing, administration, legal expenses and other non-medical costs that are passed on to consumers in the form of higher premiums. By shoving the few insurers out, they say, we could spend that money on medical care and reduce the overall cost. That assumes, of course, that the government can make good on that promise.

Then there’s the matter of the “exchange” itself. The health care exchange is mandated under the federal Patient Protection and Affordable Care Act (PPACA), President Obama’s health care reform law that is facing a Supreme Court challenge. The law mandates the states create an “exchange;” a one-stop online clearinghouse to allow consumers to compare the features and costs of multiple plans offered by multiple carriers.

But Vermont is heading down a very different path – one benefit plan, and one carrier.

The Deputy Commissioner of Department of Vermont Health Access (DVHA) is busily working to build the benefit plan that will include two levels of out-of-pocket limits, so the Green Mountain Care Board can give its stamp of approval. Your out-of-pocket expense, by the way, is the only choice you’ll be offered.

Why wouldn’t this simple, yet extraordinarily inadequate choice, be posted to the DVHA website for all to see rather than spending $18 million dollars to build an “Expedia” site that contains no choice?

So, really where will the $18 million in federal dollars going to be spent?

Certainly not to develop an “exchange” that provides a “robust marketplace,” designed to “increase choice” among “competing health issuers and health plans.” No, the Administration will spend $18 million to hire more government workers and to develop a web-portal, enrollment function, IT systems and risk adjustment modeling – or maybe better defined as a new government check book.

There’s no more personal decision than which kind and how much health insurance a consumer may choose. Vermont’s approach is to make it easier to choose – by taking away all the options. Simpler, no doubt; but better, not likely. And certainly not what Congress intended in PPACA.

Small business owners across Vermont are in the trenches producing goods and services that generate taxes to fill state coffers. They have valid concerns, yet they are being ignored. This debate has paralyzed business owners trying to decide whether to add or cut jobs in the near-term and in the future.

NFIB/VT urges Governor Shumlin to insist that Vermont make good on the Obama promise and deliver to its citizens an “exchange” that provides a “robust marketplace,” designed to “increase choice” among “competing health issuers and health plans.” Governor Shumlin’s current plan heads us down the wrong path with no alternative.

Shawn Shouldice serves as the Vermont State Director for the National Federation of Independent Business (NFIB), the voice of small business with more than 1,800 members across Vermont.