1 Comprehensive Health Care Reform in Vermont: The Policy and Politics Jim Maxwell, PhDHerb Olson, JD JSI Research & Training Institute, Inc. Vermont Department of Banking, Insurance, Securities and Health Care Administration

2Overview Context for 2006 health care reform Program elements Implementation status and challenges Lessons for state and national reform

3 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 Context Policy Context

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

5 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

6 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

7 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

8 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

9 Financing Financing -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

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

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

12 –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

13 Lessons for State and 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

14 Contacts Jim Maxwell, PhD Director of Health Policy & Management Research JSI Research & Training Institute, Inc Herbert W. Olson, JD General Counsel Vermont Department of Banking, Insurance Securities and Health Care Administration