Governor Shumlin's Healthcare Reform Plan and H.202/S.57

OVERVIEW

Governor Shumlin's healthcare system reform plan, as presented to the Vermont Legislature by his Special Assistant for Health Care, Anya Rader Wallack, in a joint hearing of the House Health Care and Senate Health and Welfare committees on Tuesday, 8 February 2011, is a plan designed to move Vermont toward a universal, “single payer” healthcare system over a period of between three and six years.

The plan has three stages.

  1. The first stage (beginning July 2011 and running through 2013) has four components:
    1. establishment of a five-member Vermont Health Reform Board, the general purpose of which is to develop mechanisms for reducing the rate of growth of healthcare spending;
    2. establishment of a Health Benefit Exchange for Vermont (under the Department of Vermont Health Access), in accordance with the federal Patient Protection and Affordable Care Act (ACA);
    3. planning and studies;
    4. other immediate initiatives.
  2. The second stage (2014) consists of implementing (beginning to enroll people in) the exchange.
  3. The third stage (2017 -- or 2014 if federal law permits) is the transition of the exchange to a “single-payer” healthcare system, Green Mountain Care.*

*The term “single payer” is something of a misnomer, since the system would not fully integrate all coverage plans — notably TRICARE, the Veteran’s Administration and non-state residents.

H.202

The legislation that would begin this process is H.202. (An identical companion bill in the Senate is S.57.) As introduced, the bill contains thirty-one sections.

Section 1 enumerates the principles of H.202, which are largely the same as those defined in Act 128 to guide that Act's healthcare system design process. As introduced, H.202 does nothing but state these principles (unlike Act 128 which references its principles as standards for the healthcare system design work that it called for).

Section 2 of H.202 outlines the plan for unifying Vermont's healthcare system. It describes actions, tasks and responsibilities that are spelled out more fully in later sections of the bill.

The bill's ostensible goal is to begin moving the state toward the eventual creation, subject to the state's receiving the necessary waivers from federal law, of a universal “single-payer” healthcare system, Green Mountain Care.

As mentioned above, a health reform board would initially focus mainly on developing mechanism for reducing the rate of growth of healthcare system costs. (See Section 3 below for additional details.)

In 2014, when it becomes operational, a health benefit exchange will include employers with fewer than 100 workers, along with state and municipal workers. It will also integrate Medicaid, Medicare and workers' compensation. The bill calls for including larger employers by 2017. All individual and small group health insurance plans will be sold though this exchange. Large group plans will have to be aligned with the administrative requirements and essential benefits required in the exchange.

Responsibilities for carrying out or overseeing (supervising) the detailed planning necessary to implement the general plan described in the bill are given to the Secretary of Administration and, to a much smaller extent, to the Commissioner of the Department of Banking, Insurance, Securities and Health Care Administration. These plans (due 15 January 2012, with exceptions noted below) include:

  • integrating (in the case of individual and small group plans) and aligning (in the case of large group plans) all health insurance plans with the health benefit exchange (1 January 2014);
  • integration of multiple payers into the health benefit exchange;
  • financing (15 January 2013);
  • health information technology;
  • unification of healthcare system planning, regulation and public health;
  • provider payment reform;
  • ensuring an adequate primary care workforce;
  • retraining of workers displaced by simplification of healthcare administration;
  • medical malpractice reform.

The detailed requirements for this planning work are spelled out in Sections 8-14 of the bill. (The subjects of those sections are listed later in this document.)

The Secretary of Administration (or designee) would also be responsible for obtaining waivers, exemptions, agreements or legislation ensuring that federal healthcare money for programs such as Medicaid, Medicare and the exchange is consolidated in Green Mountain Care.

Section 3 of H.202 creates the Vermont health reform board and defines its composition and duties.

The board would consist of a full-time chair and four half-time members, all appointed by the governor, with advice and consent of the Senate, for six-year terms. The members of the board would be:

  • an expert in health policy or finance
  • a practicing physician
  • a hospital representative
  • a representative of employers
  • a representative of consumers.

The board's objectives are defined (notably without reference to the principles of Section 1) as follows:

  1. improve the health of the population;
  2. enhance the patient experience of care, including quality, access and reliability;
  3. reduce or control the total cost of healthcare;
  4. in its planning, to the extent feasible:
    1. improve health care delivery and health outcomes, including by promoting integrated care, care coordination, prevention and wellness, and quality and efficiency improvement;
    2. protect and improve individuals’ access to necessary and evidence-based health care;
    3. target reductions in costs to sources of excess cost growth;
    4. consider the effects on individuals of any changes in payments to health care professionals and suppliers;
    5. consider the effects of payment reform on health care professionals; and
    6. consider the unique needs of individuals who are eligible for both Medicare and Medicaid.

The board's specific duties develop over the course of the three stages of implementation of the healthcare system.

  1. Initially (1 October 2011), the board's responsibilities are largely related to planning: reviewing and recommending changes in the law affecting regulation of hospitals; developing and approving payment reform pilot projects (1 by 1 January 2012, additional 2 or more by 1 July 2012); developing payment methods and amounts, and approving health insurance rate increases.
  2. In preparation for the implementation of the health benefit exchange (1 July 2013), the board's responsibilities grow significantly. These additional responsibilities relate to paying providers, approving benefit packages and evaluating system performance.
  3. Once Green Mountain Care is implemented, the board would gain the additional responsibilities of approving the benefit package and budget and recommending appropriations necessary to fund the system.

Section 4 of H.202 creates the Vermont health benefit exchange (as a division of the Department of Vermont Health Access), in accordance with ACA. The exchange would be responsible for managing four general areas:

  1. benefits (essential and additional) within the exchange and cost sharing provisions;
  2. administrative structures and policies (claims processing and payment, data collection and fiscal oversight);
  3. paying providers;
  4. compiling quality metrics (medical care, efficiency, access and satisfaction of patients and providers).

Section 4 also defines Green Mountain Care and specifies implementation upon receipt of a waiver for "state innovation" from the ACA. At that time, Green Mountain Care would replace the health benefit exchange.

Sections 5-6 specify the addition of an eligibility unit and the health benefit exchange to the Department of Vermont Health Access and migration of healthcare eligibility resources from the Department of Children and Families to the Department of Vermont Health Access.

Section 7 creates a Consumer and Health Care Professional Advisory (to commissioner of DVHA) Board/Committee, appointed by the commissioner for three-year terms, beginning 1 January 2014.

Section 8: integration plan

Section 9: financing plans (2):

  • exchange
  • Green Mountain Care

Section 10: health information technology plan

Section 11: health system planning, regulation and public health

Section 12: payment reform, regulatory processes

Section 13: workforce issues

Section 14: medical malpractice study

Section 15: insurance rate review

Section 16: employer benefit information (requiring employees to be given an annual statement of health benefit costs)

Sections 17-24: statewide preferred drug list (formulary)

Section 25-30: conforming amendments

Section 31: effective dates

CONCLUSION

For our human rights assessment of the initial version of H.202 and our recommendations for improving the bill, go here.