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Plan to pay for hospital care draws praise, criticism

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November 29, 2007

By CYRUS LEVESQUE

MIDDLEBURY — Discussion of a bill before the Vermont House that would create a single-payer health insurance system to pay hospital bills for all Vermonters met with mixed reaction in Middlebury on Tuesday.

The group Vermont Health Care for All played a large role in the discussion of bill H.304, the Vermont Hospital Security Plan, which was held at Ilsley Public Library. State Rep. Topper McFaun, R-Barre, one of three co-sponsors of the bill, said that health care costs are shooting up throughout the country and Vermont has to make major changes to how it pays for its citizens’ health care.

“Something has to be done that’s more than what we’re doing,” McFaun said at the meeting, which was called to raise support for the effort. H.304 would create the Vermont Hospital Security Trust Fund, he said, that would be used to pay hospital bills for all Vermonters.

Dr. Deb Richter, president of Vermont Health Care for All, said that a major driver of the growing costs of health care is mounting administrative costs from many different health care providers dealing with many different private insurance companies and overlapping plans. This bill would greatly reduce that growth, she said.

The tidal wave of paperwork was familiar to those at Tuesday’s meeting. One woman at the forum brought a stack of dozens of bills from recent emergency surgery to the meeting. Some should have gone to her insurance company in the first place, she said; some were from the hospital itself while others were from an individual specialist, and one apparently charged different rates for the same test on different days.

“I’m spending hours and hours going through these,” she said.

Under H.304, the dozens or hundreds of billing addresses hospitals now need to track would be reduced to one: the state.

Vermont Health Care for All estimates that implementing H.304 would cost the state about $710 million, but Richter argued at the meeting that without the bill, overall spending would rise by the same amount or more in both direct and indirect ways, like increased insurance premiums and growing administrative costs.

H.304 would make individual insurance unnecessary for hospital care for Vermont residents, but hospital fees only make up about 40 percent of all health care expenditures. The rest goes to prescription drugs, physicians in private practice, nursing homes and similar expenses, and H.304 would not affect the need for insurance for those.

According to Richter, H.304 would result in a decrease in health insurance premiums of about 40 percent to all Vermonters, because of a regulation by the Vermont Department of Banking, Insurance, Securities and Health Care Administration that requires premiums to drop in proportion to any drop in insurance coverage.

PROBLEM SOLVED?

About 40 area residents attended the meeting, which grew heated at times. The proposed bill was not without critics, such as Rep. Steven Maier, D-Middlebury, chair of the health care committee in the House.

“It won’t solve the problems that were being presented,” Maier said after the meeting.

Maier argued that an increase in chronic conditions like obesity in recent decades is more responsible for the increase in national health care costs than administration or other factors. Richter acknowledged later that that is a factor, but said it can’t explain the growth in costs on its own.

In addition, Maier said that a major problem with H.304 is its vagueness on funding methods. “I don’t think it begins to answer questions about how it would work,”

Maier said H.304 calls for a committee to recommend a funding source and suggests a number of possibilities including an income tax, a payroll tax or an annual hospital care fee, but the bill itself includes nothing more definite than that.

H.304 was introduced to the House Committee on Health Care last year. Several at the meeting criticized Maier’s hesitation to pursue the matter. “Thank you for giving us Catamount Health, but there are many of us that are getting left out,” said one woman at the meeting, who said she used to be self-insured but could no longer afford to buy family policies in recent years.

Maier said he agrees with the goals of H.304, but he argued that this bill and any other equally comprehensive one would inevitably meet with a veto by Gov. James Douglas, and without sufficient votes to override a veto, it would be a waste of time to push such bills.

In some ways, the Vermont Hospital Security Plan would represent a sweeping change. Richter compared it to the Catamount Health insurance program, which went into effect on Oct. 1 to provide comprehensive health coverage on a sliding scale of premiums based on income. About 2,000 Vermont residents have signed up for Catamount Health in the two months since its inception, but Vermont Health Care for All says that H.304 would provide similar coverage for all 600,000 Vermont residents.

But from another perspective, H.304 is an incremental change over the status quo, said Rep. Michael Fisher, D-Lincoln.

“If I had my way, we’d be more aggressive,” Fisher said.

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