Heath care in Vermont is in transition. Vermont Health Connect, Vermont’s own health care exchange, will begin on January 1 and the hope is that Vermont’s single payer system will begin in 2017. While the Vermont Legislature and administration have devised a rough road map of how to get there from here, there is a great deal of uncertainty as to whether we’ll be able to hold the course and how we will pay for it. Interrelated problems need to be thoroughly understood before the final goal can be reached. Looking ahead, Vermont needs to keep its options open and not close off new ideas that might help us make the grade. One such idea is the introduction of Vermont Health Co-op, a new provider that intends to insure Vermonters under a cooperative organizational structure.
It is against this background that commissioner Susan Donegan’s rejection of the Vermont Health Co-op should be viewed. It is true that there were a number of flaws in the Co-op’s application, but these flaws should not be insurmountable. More to the point, the concept of introducing an additional health care provider, particularly a co-op run by and for Vermonters, has real merit.
Currently there are only two health insurance companies that sell policies in Vermont, Blue Cross Blue Shield VT, which has approximately 85% of the market, and MVP (out of New York) which has the other 15%. Unless things change, these are the only providers that will sell policies on the exchange. The fact that so many lives may remain outside the exchange and the eventual single payer system makes spreading the risks within our own insurance pool more difficult and potentially more expensive. Further, MVP recently backed out of insuring lower income Vermonters under Catamount, citing excessive costs. There is no assurance that MVP will remain a Vermont insurer for long.
Even though each health provider is to offer products on the exchange with similar services and benefits, there will be differences among them as to price and how administration and customer service is handled. Presumably, this competition will lead to improved results while keeping rates down. Vermont’s experience with the formation of the health care exchange is already producing strong benefits for Vermonters. Competition has exposed the high rates/poor coverage that a number of group association policies have offered. Some have effectively been bilking their membership on behalf of the parent organizations.
It is by no means a foregone conclusion that we will have a publicly funded health care system by 2017. The Legislature may not be able to agree on a tax package to fund it. The federal government may not grant Vermont permission to proceed, which would mean a loss of essential federal subsidies.
Yet, commissioner Donegan’s rejection of the Vermont Health Co-op seems based on the assumption that by 2017 we will have a Medicare type structure where everyone is covered under the same statewide policy and that both payment and administration is handled under a single bureaucracy. Yet, this approach fails to account for what will happen to existing insurers, Blue Cross Blue Shield in particular. BCBS currently operates out of a large modern edifice in Berlin and another in Williston where around 350 employees report to work each day.
Are they simply to fade away, or does Blue Cross intend to become the state’s single administrator? Are we assured that BCBS would be the best party to fulfill this role?
It would be good for Vermont if the Vermont Health Co-op and Commissioner Donegan could reach a rapprochement such that the Co-op begin operations and then flourishes. Vermont has had good experience with cooperatives. There are examples all around us that frequently provide high quality products and services at better than competitive rates. And, during this uncertain time of health care upheaval, having new organizations at work and a part of the solution is an inherently good idea.
It would be a shame if the co-op has to fold up shop before it really begins.
Representative Jim Masland