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Comprehensive Health Care Comprehensive Health Care Reform in Vermont:Reform in Vermont:

The Policy and PoliticsThe Policy and Politics

Jim Maxwell, PhDJim Maxwell, PhDHerb Olson, JDHerb Olson, JD

JSI Research & Training Institute, Inc.JSI Research & Training Institute, Inc.

Vermont Department of Banking, Insurance, Securities and Vermont Department of Banking, Insurance, Securities and Health Care AdministrationHealth Care Administration

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OverviewOverview

• Context for 2006 health care reform• Program elements• Implementation status and

challenges• Lessons for state and national reform

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• Vermont is “unique,” but has many similarities to other states

– Health care costs rising faster than the national average

– Obesity, smoking, and substance abuse major cost drivers

– Uninsured rate rising– Higher deductible plans increasingly

attractive to small businesses– Medicaid program facing fiscal sustainability

problems

Policy ContextPolicy Context

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• 2006 reform result of compromise between democratic legislature and republican governor

• Key compromise: to rely on private rather than public insurance programs

2006 Catamount Health Reforms

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• Medicaid Access Initiatives

– Premiums for children have been reduced by 50%

– Premiums for Medicaid adults have been reduced by 35%

– Education, outreach, and marketing to Medicaid eligible

Program Components

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• ESI Premium Assistance Program

– Uninsured Vermonters with income less than 300% of the Federal Poverty Level (FPL) may apply for assistance with employer-sponsored insurance (ESI) premiums

– ESI plans must offer comprehensive benefits in order for the individual to receive premium assistance

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• Catamount Health

– A non-group insurance product for uninsured Vermont residents with comprehensive benefits

– Offered as a Preferred Provider Organization (PPO) Plan by private insurers beginning October 1, 2007

– Individuals may choose which insurer they would like to use

– If income is between 150% FPL and 300% FPL, then receive state premium assistance

– If income is greater than 300% FPL, then pay entire premium

*300% of FPL is $30,630 for one person and $61,950 for a family of four

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• Chronic Disease Management and Wellness Initiatives

– Comprehensive chronic disease management and wellness initiatives

– Apply to both private and public sectors– Use financial incentives for providers and

individual consumers

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FinancingFinancing- Increase in tobacco tax by 60 cents per pack- Federal matching of Medicaid dollars- State General Fund appropriations- Employers pay a fee based on number of

uninsured employees- Catamount Health Plan: Individuals pay sliding

scale premiums based on income

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Figure 3: Increases in Enrollment in First 6 Figure 3: Increases in Enrollment in First 6 Months (11/07 - 4/08) Months (11/07 - 4/08)

554

252

3187

224

1821

0

500

1000

1500

2000

2500

3000

3500

Medicaid w/oESI

Medicaid w/ESI ESI CatamountHealth w/Premium

Assistance

CatamountHealth w/oPremium

Assistance

Implementation Status

1111

Figure 4: Projected v. Actual Enrollment Figure 4: Projected v. Actual Enrollment (through 4/30/08)(through 4/30/08)

2535

5655

315

1011

244

3507

273

589

0 1000 2000 3000 4000 5000 6000

Catamount Health w/o PremiumAssistance

Catamount Health w/ PremiumAssistance

ESI

Medicaid w/ ESI

Projected Actual

1122

– Mixed incentives for Medicaid expansion• Adequacy of Medicaid enrollment “carrots”

– Achieving voluntary buy-in to costly plan (Catamount Health)

– Federal financial participation – Complexity of implementing system

change

Implementation Challenges

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Lessons for State Lessons for State and National Reformand National Reform

• Vermont combines coverage expansion with cost control and health programs

• Combination broadens public support for health reform generally

• Public health and disease management gain new traction

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Contacts Contacts

Jim Maxwell, PhDJim Maxwell, PhDDirector of Health Policy & Management ResearchDirector of Health Policy & Management Research

JSI Research & Training Institute, Inc. JSI Research & Training Institute, Inc. maxwell@jsi.commaxwell@jsi.com

617-482-9485617-482-9485

Herbert W. Olson, JDHerbert W. Olson, JDGeneral CounselGeneral Counsel

Vermont Department of Banking, InsuranceVermont Department of Banking, InsuranceSecurities and Health Care AdministrationSecurities and Health Care Administration

hwolson@bishca.state.vt.ushwolson@bishca.state.vt.us802-828-1316802-828-1316