The Hsiao Report: Quick Hits

by Rob Roper  

How is it going to be paid for? Through a payroll tax levied on employers of 12% to 13% and on employees of 5.5% to 5.6%.   There will be exemptions for “low wage” employers and employees who earn less than 200% of the federal poverty level.

How is it going to be administered? Through an appointed board made up of “a broad base of stakeholders” who will make recommendations to the legislature and the governor.

Who is expected to benefit? According to the report, the uninsured, the underinsured, most employers and workers will pay less, and most primary care providers will receive more net income.

Who is hurt? Private heath insurance organizations will be largely eliminated. Sales, marketing and underwriting personnel will lose their jobs. Employers who do not offer insurance or offer little insurance now will pay more. Two high income earners in a single household will now pay twice. The new benefit package will represent the current state average, so those currently receiving benefits above the state average will have poorer coverage moving forward.*

* During his press conference, Dr. Hsiao indicated that teachers and state employees will be taken care of with “wrap around” policies allowing them to keep their premium benefits packages, “at least initially.”

What’s unchanged? Medicare will not be affected, and none of this applies to Vermonters over sixty five.

Some New Questions Raised

How will the state deal with Vermonters currently insured privately under federal ERISA laws? Or Veterans who receive federal health care benefits?

How will the state deal with Vermonters who are not employed by Vermont companies? Vermont does not have the legal authority to levy a payroll tax on out of state employers.

The plan calls for a uniform payment system in order to establish efficiencies and realize savings. However, Vermont Dr’s and hospitals will continue to have to administer different insurance regulations from out of state patents, Medicare patients, and from Vermonters who opt to purchase private, supplemental insurance polices. Given this dynamic, how can the needed savings materialize?

Many more questions need to be asked and answered on this issue. Share yours!

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