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Press ReleaseFor Immediate ReleaseOctober 17, 2005
Vermont Medical Society Releases Health Care Reform Plan MONTPELIER, Vt. -- To protect the health of its citizens and ensure equal access to health care services, the state of Vermont should require all residents to carry health insurance coverage, the Vermont Medical Society said today. The health insurance requirement is part of a comprehensive health care reform plan adopted by the Vermont Medical Society and released at a public summit held today by Gov. Jim Douglas in Killington. The VMS plan is designed to ensure universal health care coverage, reduce administrative costs, preserve Medicaid benefits, and stabilize health care insurance premiums for Vermonters. Several laws have been passed in Vermont to encourage healthy living and save lives, including a ban on smoking in public places and mandating the use of seat belts and motorcycle helmets. But Vermonters’ health continues to be in jeopardy without insurance that pays for preventive care and treatment of chronic conditions. “Requiring health insurance coverage is the greatest single thing we can do to improve the health status of Vermonters,” said Harvey Reich, M.D., a critical care physician in Rutland and immediate past president of the Vermont Medical Society. The second major goal of the VMS plan is to eliminate the strain that Medicaid cost-shifting is placing on the health care system. Medicaid pays about half of what it costs to care for its beneficiaries, which are one-quarter of the state’s population. The unpaid costs are shifted onto commercial health insurance plans, which in turn makes commercial insurance more difficult to afford for employers and their employees. Physicians squeezed by Medicaid’s insufficient reimbursement have no choice but to limit the number of Medicaid patients in their practices. “The state is not acting responsibly in its Medicaid underpayment, and it’s putting the rest of the health care system at risk,” said Dr. Reich. “The VMS plan is about preserving both Medicaid patients’ access to doctors and employer-sponsored insurance,” he said. Under the plan, all Vermonters would be required to carry a minimum level of health insurance coverage. Proof of health care insurance would be required to receive certain government benefits, such as a Vermont driver’s license or an income tax refund. Most Vermonters would meet the health insurance requirement through existing coverage provided by government programs, such as Medicaid and Medicare, or commercial insurance. Of the estimated 65,000 Vermonters who do not have health insurance, 27,000 are eligible for Medicaid coverage and could meet the insurance requirement by enrolling in the program. Of the remaining 38,000 people, it is estimated that at least half would receive financial assistance in purchasing insurance through a new publicly-funded premium subsidy program. Carriers in the individual insurance market would be required to offer a new Vermont basic benefit plan, developed by an independent commission appointed by the General Assembly and the governor. The basic benefit plan would include full coverage for chronic illness care, as well as providing preventive care and protection against catastrophic illnesses. The basic benefit plan must recognize that health care is neither an unlimited resource nor cost free, Dr. Reich said. “The commission must, therefore, strive to balance the moral, ethical, and economic desires of Vermonters when determining the nature and extent of the plan’s health benefits,” he said. The commission, with the assistance of an organization such as the Vermont Ethics Network, should engage Vermonters in a statewide discussion of the principle of distributive justice in the design of the basic benefit plan, Dr. Reich said. The independent commission would ensure that the basic benefit plan is affordable for Vermonters earning the average per capita income. One way of doing this is by creating a publicly-funded reinsurance mechanism, which would be designed to pay claims that exceed a certain dollar amount. By limiting commercial insurers’ claims exposure, premium costs would be lower for Vermonters purchasing the plan. New tax incentives would be offered to employers to encourage them to provide and maintain insurance benefits to their employees and their dependents. The Vermont Medical Society plan would require the Medicaid program to negotiate a new fee schedule with health care provider bargaining groups, which would result in reasonable and fair payments for services and reduce cost-shifting. The General Assembly would fund the Medicaid program at a level consistent with the negotiated fee schedule. To fund the various reforms, the Vermont Medical Society recommends that public health-related tax increases be instituted. Those could include:
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Increasing Vermont’s cigarette
tax from $1.19 per pack to $2.00 per pack (estimated revenue $19.6 million a
year); The $33.3 million in new state revenue would be supplemented by an estimated $47.5 million in additional federal Medicaid funding through the new Global Commitment waiver. In return for committing more state and federal funding to the health care system, Vermonters can expect to see their health care insurance premiums stabilize in future years, Reich said. To maximize the percentage of health care dollars that go directly to patient care, the VMS recommends that the state bring physicians, hospitals, and insurers together to reduce administrative costs by standardizing payment codes, prescription drug formularies, insurance plan designs, claims submission requirements, credentialing procedures, and regulatory practices. Rapidly-increasing medical malpractice insurance costs are also placing a strain on the health care system, as physicians are being forced to retire early and limit the services they can provide. Physicians worried about the possibility of a malpractice lawsuit tend to order more tests, which drives up the cost of health care. To alleviate this strain, the VMS plan recommends adopting several measures such as caps on non-economic damages, safe apology protections, and pre-trial screening panels. To encourage Vermonters to take responsibility for their own health and their use of the health care system’s resources, the VMS recommends allowing premium discounts of up to 15 percent for people who adhere to health promotion and disease prevention programs. Driven by the combination of an aging population, increased prevalence of obesity, and lifestyle habits such as poor nutrition, physical inactivity, and tobacco use, the needs of Vermonters with chronic conditions will be the primary driver of the demand for health care and the resulting costs for the foreseeable future. The VMS recommends that the Legislature fully fund the Vermont Blueprint for Chronic Health Care Initiative to ensure that chronic diseases, such as diabetes, asthma, depression, and heart disease are treated properly and efficiently, and individuals are engaged in efforts to protect their own health. The Vermont Medical Society represents more than 1,500 physicians licensed in Vermont. The mission of the Vermont Medical Society is to serve the public by facilitating and enhancing physicians’ individual and collective commitments, capabilities and efforts to improve the quality of life for the people of Vermont through the provision of accessible and appropriate health care services. -30- For more information,
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