The health-care quagmire

Mark Curran, who owns Black River Produce in Springfield, says he favors a new and more equitable system in which businesses don’t have to shoulder such a large portion of the cost of health insurance.
http://www.rutlandherald.com/article/20120904/BUSINESS07/709049957

Published September 4, 2012 in the Rutland Herald The health-care quagmire After Supreme Court vote, cost of health reform remains the issue By GARETH HENDERSON Following a landmark U.S. Supreme Court decision on health-care reform, businesses in Vermont still have the same question about a state-sponsored single-payer system: How much will it cost? That’s the question that Governor Peter Shumlin and his administration must answer in January, when the Vermont Legislature reconvenes and continues on the path to health-care reform. This deadline was laid out in previous legislation, and Shumlin contends his health-care team will be able to roll out a financial plan for single-payer at that time. The recent U.S. Supreme Court vote of 5-4 upheld the federal Affordable Care Act, which allows states to set up their own health-care exchanges. These exchanges are virtual marketplaces that would allow consumers to choose their own health coverage from participating insurers. The Affordable Care Act also allocates $400 million per year to subsidize health-care premiums for low- to moderate-income Vermonters. In Vermont, the hope is that the single-payer program will attract more Vermonters to pay into the health insurance marketplace, thereby reducing the cost of coverage statewide. According to Harvard economist Dr. William Hsaio, who advised the Vermont Legislature on health-care reform, this new system is expected to save the state $490 million in its first year. These savings would enable businesses burdened by health care costs to create 5,000 new jobs in Vermont, said Hsaio. Mark Curran, who owns Black River Produce in Springfield, VT, said he favors a new and more equitable system in which businesses don’t have to shoulder such a large portion of the cost of health insurance. “One of my concerns would be cost,” said Curran of a statewide single-payer system. “Are we going to look at covering everybody, or are we going to look at cutting cost?” Curran, also a board member of Vermont Businesses for Social Responsibility, pointed out that some people don’t work for employers that supply health coverage. For instance, “It’s pretty rare to have a restaurant that supplies health insurance,” he said. However, a number of steps need to be taken before businesses can compare health plans under a single-payer system. The governor-appointed Green Mountain Care Board is planning the exact benefits offered under such a program, but that announcement won’t be forthcoming for several months. “You can’t determine the cost [of the program] until you know what the plan is and what’s going to be covered,” said Tom Torti, president of the Lake Champlain Regional Chamber of Commerce. The chamber, said Torti, wants to be sure that the end result is health coverage that businesses can afford: “We don’t want to see a grand experiment in offering all sorts of new programs to be covered.” As the administration’s plan stands now, Vermont would set up its health-care exchange in 2014, and businesses with 50 employees or less would be eligible to participate in the exchange that same year. Businesses with 100 employees or less would be eligible in 2016, and all other businesses would receive their eligibility by 2017. Shumlin said a single-payer system would reduce health-care costs for businesses by taking the growing financial burden off of employers. “If health-care costs continue to rise in the next three years, by 2015 we’ll be spending $2,500 per year out of the pockets of every living Vermonter, and most of that falls on the backs of businesses,” Shumlin said. The Green Mountain Health Care Board is tasked with creating the single-payer system. Board chair Anya Rader Wallack said the Supreme Court decision wouldn’t have changed the board’s plans, as cost-containment and payment reform are still at the top of its priority list. However, the Supreme Court vote “did create more certainty around the legal framework under which we’re operating, and brings significant federal assistance to Vermont health reform,” she said. Despite an infusion of $400 million of federal funding, State Rep. Jim Eckhardt of Chittenden said the plan shouldn’t lean on this assistance, noting the possibility of future cutbacks at the federal level. “I worry about how much Vermont’s going to rely on federal aid to do the single-payer,” Eckhardt said. He also expressed concerns that the new system would result in new costs to businesses to pay for the reforms. Many employers and residents in his district look skeptically on the law, he said. “They want to hear more,” he said. “They’re not sure it’s going to work.” State Rep. Alison Clarkson of Woodstock said many of her constituents applauded the U.S. Supreme Court decision. “They’re thrilled that Vermont will be able to continue its reforms,” Clarkson said. Although Shumlin’s critics cite concerns about the cost of single-payer, Clarkson said it would be more costly to continue with the current system. Local businesses, she said, often cite rising health-care costs as one of their greatest burdens. “Its [cost] escalation is killing them,” Clarkson said. Cost has also been on the minds of health-care providers throughout Vermont. “Vermont must ensure that it does not allow the political process to simply expand access without ensuring that providers are paid fairly for their services,” said Kevin Robinson, communications director at Southwestern Vermont Medical Center. “A failure in this area could push many physicians to leave Vermont.” The single-payer model is only part of the health-care reform picture, noted Robinson. “Regardless of how Vermont pays for health care, health-care costs will continue to rise unless and until we address the rising demand for health care driven by an aging population and unhealthy lifestyles, such as smoking, obesity, and lack of regular physical activity,” he said. The Affordable Care Act was passed in 2010, one year before the Vermont Legislature passed Act 48, which paved the way for single-payer in the state and created the Green Mountain Care Board. The annual rate of growth of health-care costs in Vermont outpaces the national rate, according to statistics released by the board earlier this year. Between 2009 and 2010, those costs in Vermont grew by 4.8 percent, while the national rate was 4 percent. Statewide, Vermonters are spending nearly 20 cents of every dollar on health care – up from 13 cents in 2000, according to Wallack. v