BRATTLEBORO — As Vermont races toward creating its own affordable-health-care system, while dodging hurdles constructed of federal red tape, is the state creating a less affordable system for low- and middle-income Vermonters?
Consumer advocate Peter Sterling, executive director of the Vermont Campaign for Health Care Security (VCHCS), says upcoming federally mandated changes to Vermont's state-run health insurance plans could result in more uninsured people living in the state.
That's unless Gov. Peter Shumlin agrees to find additional revenue to subsidize premiums and out-of-pocket expenses, said Sterling.
VCHCS is a nonprofit organization focused on educating Vermonters about, and assisting them in enrolling in, the state's health-care programs.
“Our goal is to see that every Vermonter is covered by affordable health insurance,” Sterling said.
Sterling visited Brattleboro on Feb. 7 for a public education session on upcoming changes to the state's health-care landscape.
Vermont aims to construct its own single-payer heath-care system that covers all residents, but the federal government requires that the state cool its heels on this plan until 2017.
In the meantime, the federal Patient Protection and Affordable Care Act (ACA), commonly called “Obamacare,” requires that states establish health-care exchanges in 2014. In these exchanges, individuals choose insurance from a variety of providers.
Enacting the exchange will dissolve the state's current health plans for low- and middle-income Vermonters: Vermont Health Access Program (VHAP) and Catamount Health.
According to Sterling, these state plans will disappear because of changes in the funding structure from the federal and state governments.
He and his colleagues at VCHCS are “very concerned about Obamacare,” Sterling said, adding that Vermont shouldn't use implementing ACA as an excuse for not supporting affordable health care.
Sterling believes the state can find other revenue streams to subsidize the premiums of people in the exchange who would otherwise have qualified for VHAP or Catamount.
If this transition to 2017 doesn't work, he said, then the state's plans to implement the single-payer model might fail, too, if people will have lost faith in government-run health care in the meantime.
Increasing to unaffordable
According to Sterling, out-of-pocket expenses for Vermonters currently enrolled in VHAP or Catamount will increase to potentially unaffordable levels.
“[The changes are] creating a whole new class of underinsured (or uninsured) Vermonters,” he said.
Adhering to the federal plan is a significant step backwards for the state, said Sterling.
The Affordable Care Act (ACA) represents huge leaps forward in affordable health care for some parts of the country, said Sterling.
But Vermont, by comparison, with its single-payer plan, was already leaps ahead of the ACA, he said.
According to the 2009 Vermont Household Health Insurance Survey conducted by the state Department of Financial Regulation, the cost of health insurance premiums is a top reason why people remain uninsured.
In the survey, 61.1 percent (29,018) said cost was “absolutely the only reason” a respondent was not covered by health insurance.
By comparison, only 9.9 percent of respondents (4,708) said cost was “not much of a factor.”
Sterling estimates, at present, that 42,000 Vermonters are uninsured. Of that number, 20,000 qualify for one of the state's programs, but they don't enroll because of cost.
“I think people make very nuts-and-bolts decisions [about costs],” he said.
The ACA and exchanges in 2014 will let people buy health insurance on a sliding scale, said Sterling - but the ACA will not be as sensitive as Green Mountain Care now is.
According to VCHCS, an individual on a state health-care plan who has a household income of $17,244, about 150 percent of the federal poverty level, pays less than $600 annually for premiums and out-of-pocket expenses.
This same individual, if he or she switches to a ACA-mandated silver plan next year, will pay $431 more - $1,031 - in premiums and out-of-pocket expenses annually.
For an individual on a state plan with a household income of $34,488, annual premiums and out-of-pocket expenses will increase $1,713 in the exchange.
A couple with a household income of $46,548 will see an increase of $1,632 annually, or about $816 per person.
Couples earning 350 percent of the federal poverty level - $54,306 - represent the only demographic to save money in the exchange, when their annual premium costs drop $1,200.
Sterling said he feared the cost increases would force people living on tight incomes to choose between necessities.
According to Sterling, the Shumlin administration had included funds in the fiscal 2014 budget to subsidize premiums and out-of-pocket expenses.
But the Centers for Medicaid and Medicare Services, the federal agency that administers those programs, said it would not match what the state was paying toward the uncovered expenses.
CMS did agree to match the state's premium subsidies. But, said Sterling, the state is still millions short to keep premiums from inflating for low- and middle-income earners.
As a result, said Sterling, Shumlin is cutting his original subsidy.
Other streams of revenue
When the Legislature developed Act 48, an act ensuring a universal health care system, it included in the 2011 law the concept that health care was a right, not a privilege.
In his 2012 election victory speech, Shumlin echoed that theme, saying, “We're going to be the first to have a sensible, affordable single-payer health care system where health care is a right not a privilege. We're going to do it together.”
But the current administration isn't applying the principle of health care as a right to the exchange, said Sterling.
Although some funding sources for Catamount and VHAP will disappear with the ACA, like the federal Medicaid match, Sterling said other revenue exists, pointing to pots of money such as Vermont's tobacco trust fund.
Sterling also supports a penny-per-ounce tax on sugary beverages. The tax would raise about $28 million toward subsidizing premiums for low- and middle-income Vermonters in the exchange.
But as things stand now, Sterling says, lower-income Vermonters are looking at a step backward.
“It's terrible,” said Sterling. “Basically, as long as you never get sick, you'll be okay.”