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New health care law pumps money, benefits into Vermont

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Posted on March 25, 2010 |
By Andy Kirkaldy



MIDDLEBURY — The massive health care reform bill passed by the U.S. House of Representatives on Sunday and signed into law by President Obama on Tuesday represents an important step forward but falls short of perfection, say Vermonters familiar with the legislation.

The new law will not only add many Vermonters to the rolls of the insured and give the state $100 million to support Medicaid here, according to Congressman Peter Welch, state Rep. Steve Maier and administrators at Middlebury’s Porter Hospital. But it also will support existing Vermont health care initiatives, including the Catamount Health Plan and the Blueprint for Health.

“It really is complementary. The programs in place will stay in place,” said Welch in a Monday conference call.

Welch, a Democrat who voted for the bill, addressed the big picture in that call. The bill, he said, takes “incremental steps” towards universal coverage while ending insurance companies “grossly discriminatory underwriting practices.” (See related story for more on the bill and numbers detailing its potential impact on Vermont residents.)

Welch listed what he believes are the bill’s strong points, that it will:

• Quickly forbid insurance firms from denying coverage based on clients’ pre-existing conditions, ending ailing customers’ coverage, or capping annual or lifetime benefits. Welch also cited the provision that allows unemployed children to stay on family policies until the age of 26.

• Provide for insurance for “95 or 96 percent” of Americans. Medicaid will be expanded to allow about 15 million more to participate, bringing the total to about 65 million. Another 17 million are expected to join business plans or be required to buy individual plans, often with the support of tax credits.

• Buttress Medicare by getting rid of the “doughnut hole” in drug coverage which calls for increased co-payments after a certain threshold, and by allowing seniors to get free preventative care, such as colonoscopies, mammograms and physicals.

Overall spending on Medicare will be cut through elimination of Medicare Advantage premiums, and foes of the bill questioned whether Medicare is being strengthened.

• Close the budget deficit by $138 billion. Republican opponents of the legislation remain skeptical of deficit-reduction claims, although they were provided by the non-partisan Congressional Budget Office.

On Monday, Welch also cited the bill’s “glaring deficiencies” — it lacks a public insurance option, does not force drug makers to negotiate prices with federal purchasers, and does not end the health insurance industry’s anti-trust exemption.

In the end, Welch said he was willing to support a bill without those provisions, given the realities in Washington.

“It was a very, very difficult political fight,” he said.

IN-STATE PERSPECTIVE

Maier, a Middlebury Democrat and the chairman of the Vermont House’s Health Care Committee, has reservations but is pleased with the federal law’s move toward universal health care. He also agrees with Welch about its impact in Vermont, especially for the Catamount plan, which, among other things, offers low-income Vermonters help in buying health insurance.

“I am convinced that there will be some very important benefits for Vermont overall, as there are for all Americans generally, but more specifically to Vermont’s ongoing health reform initiatives,” Maier said.

Maier said by 2014 he believes federal money should supplement state funds that now pay for Catamount premium subsidies. He can even see Vermont experimenting with and expanding the Catamount plan.

“We’re hoping and presuming we’ll be able to keep the state monies in the system, but add federal money in and therefore really morph our Catamount plans and open them up more broadly ... They’re still largely confined to the uninsured,” he said. “That will sort of open that up over time to additional groups of people and perhaps become our version of a public option.”

The Blueprint for Health remains more of a work in progress, according to both Maier and Porter Hospital spokesman Ron Hallman. The overall concept is that eventually doctors and hospitals will be paid to keep people well, not just to treat them when they become sick.

Under the Blueprint now, Maier said insurance companies are beginning to fund teams of “complementary wellness professionals” — nurses, therapists, social workers and others — to support all the primary care providers in Vermont towns. The goal is to make that a statewide practice within three years.

“The (federal) legislation itself is ... supportive of public health and prevention programs, of developing support for primary care,” he said. “The Blueprint for Health is a program that really supports the delivery of primary care in our communities in a completely different way.”

Hallman agreed that the federal bill would back Catamount, and that its emphasis on wellness could eventually boost — with some effort — the Blueprint.

“Catamount is an expansion of Medicaid, so I assume the expansion of Medicaid at the federal level will probably support ... Catamount,” Hallman said. “The Blueprint is a little trickier because it’s a vision for a system of care that is still under construction ... I still think there are a lot of details that need to be filled in.”

FINANCES

Porter President Jim Daily also applauded the move toward universal health care, but being ultimately responsible for Porter’s bottom line, is concerned about funding.

Daily noted that Medicaid does not pay the entire cost of the services that the Porter provides. In December, Medicaid paid just 19 cents for every dollar of services provided by Porter, he said. The new law’s assumption is that having more patients covered and in the system will generate more revenue, and that if patients have insurance they will get care before they need more expensive emergency treatment.

Daily would have preferred more concrete payments, either from Medicaid or for assuring wellness of patients on a per capita basis, plus incentives for individuals to make healthier lifestyle choices.

“It would have been a stronger bill if there were more incentives for wellness, both individual responsibility-driven as well as structured payments to providers,” Daily said. “It is not a sound strategy, though, to increase access and not pay the cost of the increased access.”

Hallman and Daily agreed the existing system is unsustainable. Daily hopes the new system will turn out to be more sustainable, given that health care delivery remains labor- and technology-intensive.

“Over the next nine or 10 years if we add 32 million people to the system, is there verifiable, substantial proof that we’re off that unsustainable cost curve?” Daily said. “Reform has to mean more than, OK, we’re going to pay you guys 98 percent of what we paid you last year, assuming you’re going to do the same amount of stuff.”

Maier hopes the Blueprint, with support from the new legislation, will eventually address those concerns.

“The basic problem with our current health care system as it relates to payment is that we pay almost exclusively on process or volume, when a doctor sees you face to face or you fill a bed in a hospital,” he said. “A hospital doesn’t get paid to keep you out of a hospital, for example, to keep you healthy. In the Blueprint ... we are doing supplemental per person, per month payments for each doctor that they get whether that person comes in the door or not.”

Eventually, Maier foresees working under the bill toward both per capita and fee-for-service payments.

“Some sort of blended system is what’s ultimately going to make sense here,” he said. “That’s still a few years off in Vermont.”

Given the nature of the challenge — one that Maier likened to fixing an airplane while keeping it in the air — the three local experts saw the legislation as a good start.

“We’re generally supportive of all the positive things, but it’s not a perfect bill, and there’s going to be other things that we’re going to hope for and push for,” Hallman said. “But it’s huge, one-sixth of the economy, with many variables. You can’t fix them all at once. I think it’s pretty amazing that they were able to pass a bill that addresses as many things as it did address.”

Reporter Andy Kirkaldy is at andyk@addisonindependent.com.

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