One of the issues with Gov. Shumlin’s health care plan was how poor and working class Vermonters would fare in the transition from Catamount and VHAP to the new health care exchange. As things stand, their health care costs would increase substantially; the state would have to spend an estimated $18 million to hold those Vermonters harmless.
Well, the Governor’s 2014 budget provided $10.3 million — a little more than half the needed funds. But at a media briefing on the budget, Administration Secretary Jeb Spaulding practically leaped out of his chair in his haste to explain that the $10.3M was more than enough to close the gap. That’s because FY 2014 runs from July 1 to June 30, and the exchange goes online January 1, 2014 — halfway through the fiscal year. And since $10.3M is more than half of $18M, nobody would suffer in the transition.
Case closed, right?
Well, not quite. VTDigger’s Andrew Stein went digging, and found some significant holes in the Governor’s plan. The article is very wonky, but well worth your time and attention if you want to stay informed about the Shumlin Administration’s top priority.
(This story is a terrific illustration of why we need a robust Statehouse media presence, and why anybody with a spare shekel or two should consider a donation to VTDigger.)
In January 2014, some 110,000 Vermonters who aren’t enrolled in Medicaid will have to buy health insurance through the exchange. The $10.3M will hold many of them harmless — but not all. And some could be hit hard by out-of-pocket expenses. The two issues, as explained by Digger:
1. The Shumlin plan includes a new way of calculating health care premiums based on income. The change, according to Administration officials, is designed to match the methods used in the Affordable Care Act. As they say, the old system is going away, and therefore we can’t hold onto the old formulas.
The new calculations will benefit some, while others will see premium increases. Those hikes are very modest, but for the working poor, every dollar is precious. Example: An individual earning 150% of the 2013 poverty line would see a premium increase of $35 a year. Without the $10.3M adjustment, the cost increase would have been $294 a year, so the Shumlin plan closes virtually all of that gap.
The bigger problem is…
2. Higher out-of-pocket expenses for those who actually need health care. This affects Vermonters earning between 133 and 300 percent of the federal poverty line. Example: A couple earning 300% of the poverty line would enjoy a $1250 decrease in their annual health care premiums — but their annual maximum out-of-pocket expenses would rise from $2100 under Catamount to $5,000 in the exchange.
In short, as long as you stay healthy, you win big. If you get sick, you could be stuck with substantially higher bills.
One more thing. Remember that $18M figure? The amount needed to hold the working poor harmless? Well, apparently that’s no longer the actual number:
…Mark Larson, commissioner of the Department of Vermont Health Access, replied, “Our estimates have evolved.” He wasn’t sure, however, exactly how much money would be necessary to hold all of these Vermonters harmless.
He “wasn’t sure,” or he “didn’t want to say”? It’s hard to believe the Administration really doesn’t know.
To be fair, the Administration has gone a very long way to ease the transition. The proposed system is a lot better than it would have been without the $10.3M. But, as always, the devil is in the details, and it’s best to read the fine print.