Comprehensive Health Care Reform in Vermont:

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

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

3. Policy Context • 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

4. 2006 Catamount Health Reforms • 2006 reform result of compromise between democratic legislature and republican governor • Key compromise: to rely on private rather than public insurance programs

5. Program Components • 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

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 • 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. Implementation Challenges • 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

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, PhDDirector of Health Policy & Management ResearchJSI Research & Training Institute, Inc. maxwell@jsi.com617-482-9485Herbert W. Olson, JDGeneral CounselVermont Department of Banking, InsuranceSecurities and Health Care Administrationhwolson@bishca.state.vt.us802-828-1316