Before the program can take effect, it has a long road to travel. Signing H.202, also referred to as Act 48, set up the broad perimeters for the single-payer system, and established steps that need to be taken before it goes into effect. The first step is creating a health care exchange, as required under the Affordable Care Act of 2010. States are required to create health care exchanges by January 2014, and Vermont is focusing on an online approach.
According to Robin Lunge, Vermont’s Director of Health Care Reform, the state is creating a web-based portal from which insurance companies will offer private insurance plans that meet specific federal requirements. These requirements include an essential health benefit package, co-pays, and deductibles that meet actuarial levels, or in other words, the minimum amount of coverage people must have to satisfy the requirement that they be insured or pay a federal tax penalty beginning in 2014.
The people who can buy the insurance through the web portal are those individuals who don’t have a health care plan sponsored by an employer or a small business with 50 employees or fewer. The plans in the web exchange will be defined by the split between what an individual pays in their premium and what an individual pays in their deductible and co-pay. Four plans will be offered in the exchange, categorized as platinum, gold, silver, and bronze, based upon this split.
As Lunge explains, “The plans really define how you pay. Consumers in the insurance market really have a choice of how much risk they want to bear. If you want to pay for it month-to-month in your premium so that when you do need services you have very little cost, you can, or if you want you can take a risk and pay less in your premium month to-month and pay when you get your coverage.”
Lunge also says the exchange web portal creates an easy way for Vermonters to shop for insurance. “Think about it like Orbitz or Kayak but instead of buying a plane ticket, you’re buying insurance. It’s a mechanism that makes it much easier for people to buy insurance, and it will make it much easier to compare insurance products and carriers.”
Dental policies will be included on the exchange, however they will remain a separate policy. Currently with private insurance, dental care is considered a separate product from health care, not a traditional coverage service. While the federal government requires that children’s dental and vision care be included in major medical policies, some advocates have pushed for Vermont to include adult dental care to federal essential health benefit packages. According to Lunge, if Vermont was to cover dental care for adults, the state would be required to pay for it through 100% state funds.
The group tasked with setting up and approving the designs of Green Mountain Care, is the Green Mountain Care Board (GMCB). Created by the Legislature in 2011, the GMCB is an independent group of Vermonters charged with ensuring that changes in the health system improve quality while stabilizing costs. The board acts as an independent review board, and has final approval over the planning of Vermont’s health care system.
In Act 48, the GMCB was granted immediate jurisdiction around benefit design, cost containment, hospital budgets, insurance rate reviews, and certificate needs. Through Act 48, the executive branch creates proposals, and presents them to the GMCB, which has the final say over what stays in the plan.
The single-payer system is on pace to begin in January 2017. According to Lunge, Vermont has conducted three studies over the last 10-15 years to figure out the most cost efficient and effective way to organize the health care system, and all have pointed to a single-payer system.
Such an overhaul of Vermont’s health care system will take years of planning and design. Rep. John Moran believes the slow process will lead to a better future for Vermont communities. “In my community every now and then someone has a serious health crisis and the community gets together and fundraises to pay the medical bills, and that’s a failed system. We should have an equitable system so that you don’t have to have fund drives. I can appreciate the generosity of the community, but health care should be universal assistance. There should be health care as a human right.”
Moran says now the issue is how to fund the health care system. Over the past year, Gov. Shumlin’s office has been working on finance plans for the single-payer system and those reports are due to the Legislature in January. Those planning the system have held two rounds of listening sessions in five different regions of the state, asking Vermonters to give input on designing a benefit package as well as financing.
Moran believes a step away from a system of insurance through employment is a key component. “The issue here now is to fund it equitably and fairly, and one of the ways to do that is to get away from the work-insurance nexus. We need to have a separate system from one’s place and condition of employment. It’s not only good for everyone who may be unemployed and can’t afford insurance, but it’s also good for businesses. If you have an even playing field in Vermont then businesses won’t have to compete with each other over health care benefits because it’s already taken care of.”
To implement single-payer health care the state will have to acquire a waiver from the federal government to move away from having a health benefit exchange. The waiver would allow the state to start their plan, Green Mountain Care, in January 2017. Under federal law, in order to move to single-payer, the state would have to stop using a private insurance exchange. As Lunge explains, an exchange and a single-payer health care system living together make no sense. “You can’t really have a single-payer system and multiple insurance companies.”
Another part of the single-payer transition is payment reform. The GMCB is in charge of creating incentives for payment reform and delivery system reform. One plan in the works includes bundle payments, which would enumerate all the costs of an operation or other procedure in one bill. This would mean, for example, if an individual had knee surgery, they would be given one bill rather than one each from a radiologist, surgeon, anesthesiologist, and so on. Lunge hopes to have bundling implemented before single-payer.
Over the last 10 years, insurance rates have doubled and Lunge says Vermonters just can’t pay for it. “The system is going to sink under its own weight,” says Lunge. “Single payer will provide Vermonters with stability and certainty. We all know people who have lost insurance when they went through life changes, so single-payer provides certainty that people will always have coverage.”
Lunge also said that currently health care is paid for in a way that is complicated and not transparent. While individuals might know what they pay out of their paychecks, they don’t know what their employer pays, or they don’t know how much of their taxes go toward health care, whether their own or others’. “If you move to a public system, that can be more transparent and the costs become more apparent, and so individuals have a much more direct relationship to their coverage and the cost of it.”
As Moran summarized, “We’re turning around an aircraft carrier here, and it’s a slow process. With every step we’re heading toward the direction we need to be in.”