March 10, 2013
From the Rutland Herald and Barre-Montpelier Times Argus
Vermont has been successful in recent years in extending health insurance coverage to more and more Vermonters. As state officials move to widen coverage even further through the creation of a health care exchange, the challenge will be to make sure coverage continues to be affordable.
Figures released last week by the Green Mountain Care Board show that the number of Vermonters without coverage fell between 2005 and 2012 from more than 61,000 people to 42,760. The percentage of those uncovered fell from 9.8 to 6.8 percent.
These gains came from the expansion of government programs. Medicaid, which serves people with low incomes, grew by 21,000, reflecting the hard times brought on by the recession. The number of people in Medicare, the program for the elderly, grew by 10,000, reflecting the aging of the population.
One of the significant gains came in the creation of Catamount Health, which has 10,000 subscribers. These are people who make too much to qualify for Medicaid but who do not have insurance through their employers and cannot afford insurance on their own. It provides assistance in paying for premiums up to a household of five earning $74,556. Above that income level, coverage is available without the help of subsidies.
With the subsidy, the cost for a family of five is $185 a month. At the other end of the scale, Catamount provides coverage for a household of one, earning $20,904 for a cost of $65 a month.
The Green Mountain Care Board is working to establish the new health care exchange under the federal health care law that would allow the state to tap into federal money to help subsidize Vermonters who choose a coverage plan from the exchange. But there is a glitch that could catch some middle-income Vermonters now on Catamount.
At the new year Catamount is due to expire, and those with Catamount plans are expected to choose a coverage plan from the new exchange. The problem is that the subsidies going to the exchange to make coverage affordable are not sufficient to hold harmless those making the shift. In other words, some Vermonters may be faced with a significant increase in their monthly premiums, totaling about $20 million.
Lawmakers are wrestling with this difficulty. It would be a bitter pill to swallow for Vermont to eviscerate a program that is working for the sake of establishing a program that is more burdensome to Vermonters. It is important for the exchange to attract as many people as possible in order to establish a broad risk pool. But if the price of the policies is too high, two bad results may follow: People may decide to go uninsured, and the risk pool may remain stunted.
Gov. Peter Shumlin has suggested that people might have to tough it out and pay more. But there are alternatives. Those pushing the penny-per-ounce tax on sugary beverages say that revenue from that tax could cover the Catamount gap, spreading the cost broadly rather than forcing high insurance costs on individual households.
Shumlin argues that there isn’t enough money to pay for everything — the Catamount gap, as well as his other initiatives, such as expanded day care and energy efficiency. Advocates from a wide range of groups argue the contrary. They say there is enough money. It is just a question of where you go to get it.
Shumlin is hoping to get money to pay for his programs from poor and middle-income residents. To pay for the Catamount gap he will depend on those middle-income Catamount recipients to cough up the extra money. To pay for expanded day care, he would take money from working Vermonters who receive the earned income tax credit. To top it off, he is hoping to scrounge about $8 million from the poorest of all by imposing destructive time limits on people receiving benefits from Reach Up, Vermont’s welfare-to-work program.
Obviously, there is money. Shumlin proposes to go after it by chiseling away at the meager benefits supporting people who are already struggling. But he could go after it in other places. The sugary beverage tax is an obvious one. Though poor people drink sugary soda and would have to pay an extra 20 cents for a 20-ounce bottle of Coke, the Vermont Low Income Advocacy Council believes the tax would benefit the poor by discouraging them from consuming a product that, drunk to excess, damages health.
Shumlin acknowledges the money is there. He has big plans for it. But if we are to carry forward plans for the good works he proposes, we ought to get the money from a source that can afford to give it up. The tax-writing committees ought to be scouring the tax code for better places to find it.