THE VERMONT HOSPITAL SECURITY PLAN

THE VERMONT HOSPITAL SECURITY PLAN
By
Richard Davis

GUILFORD- Once in awhile a piece of proposed legislation comes along that seems so right, so sensible in many ways, that one almost begins to believe that it will pass on the first try. A bill introduced by Francis “Topper” McFaun-R- Barre Town with sponsors Michael Obuchowski-D- Rockingham and Hilda Ojibway-D-Hartford, The Vermont Hospital Security Plan, is such a bill.
Then political reality sets in. That is why this bill, H.304 has barely seen the light of day in three years. Things may be about to change. Thanks to the hard work of McFaun, who is perhaps the most non-partisan politician I have ever met, the bill may get a fair hearing when the new legislative session begins in January.
A fair hearing means that the chair of the House Health Care Committee, Steve Maier-D- Middlebury will schedule committee discussion and solicit public testimony early in the session when there is time to act. Then it will be up to the public to put pressure on their legislators to push the bill forward. Things can actually happen that way in Vermont if a critical mass comes together.
If there ever was a time for a critical mass to get results then it should happen with McFaun’s bill. The usual political barriers are still operational and that means that partisan politics, budget constraints and the art of perception over reality may win the day.
So what would this bill do? It would guarantee that all Vermonters have access to and payment for inpatient and outpatient hospital services. This would mean that whether or not you were insured, you would not have to worry about co-pays and deductibles if you needed hospital care.
McFaun got the state’s Joint Fiscal Office (JFO) to run some numbers and they have determined that insurance premiums could be cut by 43% if they allowed this new bill’s plan to take over. The tab for this plan would be $700 million, but we already need to raise $760 million in premiums, property taxes and out of pocket payments just to provide the current level of hospital care for Vermonters.
Estimates also indicate that if every Vermonter paid about $1300 a year they would have complete hospital coverage. Not everyone can afford that level of cost-sharing but even if people paid according to their ability this program could also be funded from other sources and still cost most people less than they pay now for hospital care.
Let’s say you have a decent insurance policy now and you pay $10,000 a year for two people with minimal out of pocket costs. That premium would be reduced to $5700 and you would pay an additional $2600 for hospital care. A couple would save $1700 a year and have even more financial security than most insurance policies provide. Anyone with a high deductible policy would save more and no longer live in fear of actually having to use their health insurance.
The bill doesn’t get into funding specifics but options include a payroll tax, income tax, cost-sharing measures, a value added tax, consumption taxes or an annual hospital fee. Most people would spend less than they do now for health care and health insurance. If things were set up well, then the hospital plan could dovetail with existing coverage.
Of course, all is not as simple as it sounds. This would be an incredibly complex undertaking and it would eliminate a few hospital jobs in billing departments because there would be a new and simpler system of financial administration.
The genius of this bill is that it could work financially if everyone pays according to their ability. My bias is toward an income tax dedicated to hospital care. Money needed but not raised in that way could be supplemented through some of the other measures already mentioned.
Consider some facts. The biggest chunk of health care cost is for hospital care. Half of all bankruptcies occur because of medical bills and 75% of those people who go bankrupt already have health insurance. More and more people, whether insured or not, are living in fear of what the next illness will do to them financially.
Imagine living in world that allowed us to think about dealing with our illness first instead of having to be consumed with how we will pay for our treatment. The hospital bill wouldn’t be a perfect cure for this problem, but it would be a good first step and we are still crawling when it comes to these issues.