Vermonters for Health Care Freedom is a 501 (c) (4) organization of individuals and businesses who are deeply concerned about health care reforms being implemented by Governor Shumlin, and seek patient-centered reforms that protect the traditional doctor-patient relationship.

Newsletter - May 17, 2013

Special Edition: Legislature Ends


> Health Freedom Victory: Premium Tax Defeated
> Legislature Approves Ponzi Funding for Vermont Health Connect



Health Freedom Victory: Premium Tax Defeated

Vermont is essentially under one-party rule, so any victory for the minority party is noteworthy. Of significant note in 2013 was the successful defeat of the proposed “premium tax” to fund the Vermont health benefits exchange, Vermont Health Connect. After Governor Shumlin’s proposed “claims assessment” was rejected by the legislature as a way to generate the $18.4 million needed to operate Vermont Health Connect, a replacement had to be found. Many in the administration and the legislature seized upon a very simple idea – tax all health insurance premiums 1 percent.

Of course this contradicted their stated goal of bringing down health insurance premium costs, but hey, nearly every other health-related legislative mandate or reform initiative has already had the effect of driving costs higher, so what is another 1 percent?

But there was another ‘benefit’ in the tax scheme: The federal government would be paying a share of the cost. That is because hundreds of millions in federal exchange plan subsidies will flow to Vermont to help low income Vermonters afford their premiums. So if the feds pay half the premium, for example, they pay half the tax. Except that there is a strict prohibition against federal dollars being used for this purpose. No worry, said Shumlin’s folks, we will simply hide the tax in the premium rather than show it as a separate item like a sales tax.

Opposition to the plan came from just about everywhere. And as businesses and individuals learned that their premiums will go up dramatically next year (largely as a result of health care reform) the support for a new tax was essentially nonexistent.

The Burlington Free Press noted the victory:

“Republicans agreed to allow a health care bill to go in return for cutting a $2 million health care surcharge that was proposed for those who would buy health insurance through the new exchange.

“It is a huge win for Republicans and consumers,” declared Darcie Johnston, head of Vermonters for Health Care Freedom and a critic of federal and state health reform initiatives. The proposed surcharge would have been a hidden tax since it would have been part of the premium consumers in the new health insurance marketplace would pay, she said. She suggested, too, that Democrats backed away from the surcharge because it wasn’t going to be an allowed means of paying for the exchange.”

The Free Press wrap up is here:



Legislature Approves Ponzi Funding for Vermont Health Connect

Since Governor Shumlin presented his budget in January the legislature has wrestled with how to fund Vermont Health Connect, the health benefits exchange that the administration projects will cost $18.4 million annually. The governor’s ‘claims assessment’ was rejected as being unfair, excessive and counterproductive, but a revenue source had to be found or else the federal Center for Medicare and Medicaid Services (CMS) would likely reject Vermont’s exchange. This would in turn prevent the $160 million exchange ‘marketplace’ from going online by January 1, 2014, the date when 118,000 Vermonters will be forced to purchase insurance through the exchange.

In the waning hours of the session representatives and senators settled upon a solution that works a bit like a Ponzi scheme and it will be interesting to see whether CMS is willing to buy in. But before settling upon the “employer assessment” as the funding mechanism another idea – a 1 percent tax on health insurance premiums – was defeated thanks in large part to Republican opposition and VHCF advocacy. See the story above for details.

The winning plan is the “employer assessment,” a tax assessed on employers who fail to provide health insurance to their employees. The assessment was originally enacted to help fund Catamount Health, the Vermont insurance program designed to provide affordable coverage for the working poor. When Act 48 was passed in 2011 and Catamount Health was targeted for repeal as of January 2014, businesses and their associations sought to have the assessment repealed as well. But the Shumlin Administration and legislative leaders steadfastly refused, saying that their massive government ‘reform’ would require this money and much, much more.

It turns out that they were right on both counts. In the end, the former “Catamount Assessment,” now called the “employer assessment,” is expected to raise $14.4 million in 2015. But wait a minute – if the assessment raises $14.4 million and the exchange costs $18.4 million isn’t there a $4 gap? Not according to the Shumlin Administration. Here is the explanation from

“In fiscal year (FY) 2015, the Joint Fiscal Office estimates that the assessment will raise $14.4 million. In FY 2016, the office estimates that number will go up to $15.9 million.

The state won’t begin funding the operational costs of the exchange until calendar year 2015, which falls in the middle of FY 2015. Therefore, the administration estimates that the state needs $9.2 million in FY 2015 to run the exchange. This would result in a surplus of $5.2 million moving into FY 2016, if the state only needs $18.4 million.”

The Shumlin Administration says that the exchange funding plan need only cover the costs until 2017 because that is when Green Mountain Care single payer kicks in and the ObamaCare exchange disappears.

So the ‘sustainability’ of the exchange funding depends upon the successful implementation of Green Mountain Care in 2017. But to do that the governor and the legislature must enact $1.6 billion in new taxes in 2015. $1.6 billion from sources that have not even been identified, much less analyzed. And given the gyrations the 2013 legislature suffered through to find a lousy $18.4 – er, $14.4 million, what is the likelihood that ‘sustainable’ funding in the amount of $1.6 billion will be enacted?

Whether CMS shares this concern will be interesting to watch.

The article can be found here:


Vermonters for Health Care Freedom provides a weekly summary of news and opinion each Friday. For daily news and updates click “LIKE” on our Facebook page ( and visit often.

Earlier this month, a few dozen Vermonters gathered at the University of Vermont for a seminar billed as “Healthcare 101.” But first, they had to wait for a half hour in the fluorescently lit hallways of the George D. Aiken Center for a security guard to open the reserved classroom.

“This is what’s going to happen,” quipped one sardonic attendee, trying the door handle. “You’ll show up for health care and the doors will be locked.”

- Seven Days Newspaper; full article HERE.

  • Employers pay 40% of the healthcare costs – and were never consulted.
  • An appointed board will determine benefits, coverage, funding, deductibles, co-pays, premiums, technology, provider payments, etc.
  • Under this law, you will not be allowed to purchase insurance outside of the Vermont Health Benefit Exchange.