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.

Vermonters for Health Care Freedom Newsletter #51

Vermonters For Health Care Freedom is a reliable source of candid and insightful critiques of Vermont’s health care reform efforts. Through research and our own network of experts, VHCF regularly updates Vermonters on the state’s latest health care reform efforts. VHCF is proud to have played a significant role in exposing the pitfalls of a government-run single payer health care system, which fortunately met its demise at the end of 2014.

In 2015, we focus on the impacts of the Shumlin administration’s continued push for a government-run health care system. We inform our readers about the facts that even the Shumlin administration would prefer not to reveal. No other Vermont organization is dedicated solely to this work.

Legislative Roundup: Health Care Still In Disarray

For this 2015 legislative wrap-up edition, Vermonters For Health Care Freedom would like to express our sincere gratitude to Republican Representatives Cynthia Browning, Mary Morrissey, Don Turner, Doug Gage and many others, for their input to this issue and for their ceaseless efforts to protect the health care freedom of all Vermonters.

Breaking News:

  • VHC "Release 1" Will Not Work on May 31st

In This Issue:

  • 2015 Health Care Legislation
  • Shumlin Continues Effort To Take Over Vermonters’ Medicare
  • Good News: Legislature Finally Takes Charge of VHC

Quotes of the Week:

"This is too much power for an unelected and unaccountable bureaucracy."
Rep. Cynthia Browning, D- Arlington, on whether the Green Mountain Care Board should control Vermonters’ Medicare payment rates

"Vermont Democrats seemingly ignore the basic fact that many Vermonters are struggling dearly and can’t afford to live in the state that they love so much."
House Minority Leader Don Turner, R-Milton

"Let’s be honest. That’s going to look good compared to what businesses are used to."
Governor Peter Shumlin, commenting on Blue Cross Blue Shield’s 8.4% premium increase

Breaking News: VHC "Release 1" Will Not Work on May 31: Sources close to Vermont Health Connect (VHC) tell Vermonters For Health Care Freedom (VHCF) that Release 1 will not work by the May 31, 2015 deadline. The major problem with change of circumstances remains. Even with their "fix" the system has many workarounds and patches and is still not automated. VHC employees have pages of instructions for these workarounds, but even those instructions are being replaced minute by minute as errors are discovered in the instructions. Change of circumstance fixes will continue to be made manually -resulting in errors, delays and cost overruns.

Another problem is with Exeter, the subcontractor responsible for Medicaid eligibility and reconciliation. Exeter was initially a subcontractor to CGI and responsible for much of the early development and interfacing work that was copied/borrowed from Hawaii's failed exchange. The software package from Exeter apparently does not work, and as a result, VHC is not able to reconcile Medicaid enrollment. This is the same failure of enrollment and reconciliation function that plagues VHC’s exchange health plan operations, as reported by State Auditor Doug Hoffer in his April 2015 audit findings.

According to VHCF’s sources, there are about 20 workarounds and patches in place to try to make the program work. Our sources say that the Shumlin administration will declare on May 31 that the Release 1 does “work”, since the shortcomings will not be evident to the public. We also understand that the Governor is aware of the Medicaid enrollment and reconciliation problem, and has agreed not to require reconciliation of the Medicaid enrollment. That would not surprise us, if true. Shumlin has shown a remarkable tendency to dismiss critical functional requirements as “nothing-burgers” in his zeal to declare that the exchange actually “works."

The administration owes the legislative health care committees a monthly report on the progress of the upcoming VHC “Release 1” including, “whether any critical path items did not meet their milestone dates...” Wonder what they will report about the Exeter contract problems?

2015 Health Care Legislation: After all the hoopla of the past four months, 2015 health care reform ended not with a bang, but with a whimper. As House Speaker Shap Smith stated, there was "a certain amount of health care fatigue, quite frankly." Not enough, however, to keep the Shumlin administration from furthering its quest for a government takeover of health care.

After pulling the plug on his grandiose scheme for a single-payer health care system, the Governor eventually backed down on his latest big idea - a new $90m payroll tax to address the Medicaid cost shift. Not without a lot of sound and fury, of course - but he had no choice – the Legislature just wasn’t buying it. After searching far and wide, legislators realized that they could not raise the money. In the end the $90m tax was trimmed down to $3.3m, all of which will come from a 33 cent increase in tobacco taxes.

The future of the Medicaid "cost-shift" looks bleaker than before. Vermont Digger reports that in fiscal year 2017 (next year, folks), Medicaid will face a $40m shortfall caused by declining federal match rates. In addition, Rep. Anne Donahue (R-Northfield), ranking member of the House Health Care Committee reported on May 17th, “At the same time, we learned that Medicaid cost from use of services is "running hot" at about $15 million over budget in the current year, and projected to continue at that rate next year. That was not included in the fiscal year 2016 budget we just passed."

The Shumlin administration happily expanded Medicaid to cover more individuals as part of their single-payer scheme to cover all Vermonters. At that time, Vermont was the recipient of what is euphemistically referred to as the "Leahy bump" - enhanced federal payments for Medicaid. These enhanced payments are now sunsetting. In order to continue the Medicaid expansion, Vermonters will have to pick up the slack.

Apparently no one looked down the road far enough to figure out that Vermont cannot afford to fund its share of the Medicaid expansion. In fact, the Governor recently crowed, "We're proud that we’ve cut our uninsured rate in half since I’ve been Governor. We do that….by signing folks up for Medicaid and then we say to providers ‘but we’re not going to pay you for it."

Well, duh. Then why expand it when we had no way to pay for it? Was that a rational decision? And why was it accepted by the legislative majority? When and where does this end? Hopefully in November at the polls.

State Continues Effort to Take over Vermonters’ Medicare: Although the Governor recently said that a renewed push for a single-payer system is a "dead horse," and in the same breath he declared, “We’ve got a lot more work to do in the future."

While many Vermonters had hoped that the state would finally stop tinkering with their health care when single- payer bit the dust, the Shumlin administration is quietly pursuing more subtle forms of encroachment behind the scenes. S.139, the health care bill passed by the Legislature, provides funding for elements of this ongoing health care power grab, including:

All-Payer Waiver: Remember the major brouhaha last year when word leaked that the Shumlin administration was trying to pull Vermonters’ Medicare into their single payer health care scheme? The administration roundly denied it over - and over - and over again. Robin Lunge, Shumlin’s Director of Health Care Reform must have denied it ten different ways; most notably, "We’re not going to change Vermonters’ Medicare benefits." Well yes, you are. And here’s how.

The Shumlin administration has been pursuing an "All-Payer Waiver" from the Feds for at least the past year. The waiver would eliminate the current fee-for-service payment model used by physicians. All payment rates, including Medicare’s, would be rolled into a single payment system run by the Green Mountain Care Board. The GMCB would control Vermonters’ Medicare funds, and would set the rates that Medicare will reimburse docs and hospitals. This system would replace the current Federal Medicare payment system for Vermont's seniors.

VHCF believes that an all-payer waiver is a slippery slope to a single payer health care system. Under single payer, the state would provide the only health care plan that residents could use. Under an all-payer waiver, private insurance plans would remain, but provider reimbursement rates would be set at the same level for all plans.
There is a very real concern that Vermont seniors will not be able to find the care they need here in Vermont, because the state’s all-payer waiver and tinkering with Medicare reimbursements will drive out physicians, who can practice in other states without the restraints.

Additionally, if the state controlled Medicare funds, what would happen to seniors who travel or seek health care out of state? Docs and hospitals across the country will take “regular” Federal Medicare, but would they accept "Vermont" Medicare, which is likely to pay less? Would they even know what "Vermont" Medicare is? Don’t forget – the whole idea is for Vermont to pay less than would otherwise be paid.

The Shumlin administration is well-known for dealing in half-truths. The half- truth here is that sure, we won‘t change your Medicare benefits, but good luck getting those benefits either in Vermont or elsewhere in the country. Vermont seniors deserve the assurance that no matter where they go, their Medicare benefits are safe and intact.
S.139 includes $862,767 in funds to pursue an all-payer waiver, of which $184,636 is General Fund money. The Green Mountain Care Board’s authority is increased and it gets another three positions.

On April 30th Reps.. Morrissey and Browning offered an amendment to S.139 to strip from Act 48 the requirement that "Green Mountain Care shall assume responsibility for the benefits and services previously paid for by the federal programs, including Medicare." The Democrats and Progressives defeated it on almost a straight party line vote 54-85.

Universal Primary Care: Not to be deterred by the just-proven unaffordability of a publicly funded universal health care system, the Legislature this year appropriated $200,000 to study the cost of a government run, publicly funded “universal primary care” system.

The Joint Fiscal Office is required by October 15, 2015, to provide "an estimate of the costs of providing primary care to all Vermont residents, with and without cost-sharing by the patient, beginning on January 1, 2017." "Universal primary care" covers health services provided by health care professionals including "pediatrics, internal and family medicine, gynecology, and primary mental health services. . ."

Here we go again. Rather than address our current longstanding health care problems, the Legislature is off pursuing more speculative and risky future reforms. Does anyone really think that this latest boondoggle will come in at an affordable price? Why throw good money after bad? And why spend another $200k when we've already paid for the Gruber Report, which, if we believe it, should contain this information already?

Good News: Legislature Finally Takes Charge: Going forward, the legislature will perform significantly greater oversight of Vermont Health Connect. It should have happened sooner, but at least it is happening. All feasible alternatives to Vermont Health Connect (VHC) will be studied by the Joint Fiscal Office. The administration must report monthly on (1) the current risks in VHC’s implementation; (2) actions taken to address the findings of Auditor Hoffer’s report; and (3) their analysis of the alternatives to VHC. If the administration fails to meet any deadlines including the May 31 “Release 1”, it must begin exploring with the Feds a transition to a federally supported state-based marketplace (FSSBM). In addition, individuals not receiving VHC subsidies will now be able to purchase health insurance directly from carriers.

State-Run Health Care Exchanges Are Financially Collapsing: Nearly half of the 17 states that set up their own health care exchanges are struggling financially. States are considering higher taxes, higher user fees, sharing costs with other states, and moving all or part of their marketplaces to the Federal exchange, which now works smoothly

Colorado's health exchange manager wants to max out a market assessment on insurers this year, and hike fees on exchange customers. Their exchange has more than 118 technical glitches, 78 of them critical. Sound familiar to Vermont’s Hoffer report? Hawaii is the most recent state to throw in the towel and move to the Federal exchange. Exchanges in Oregon and Nevada have already moved to FSSBM. Massachusetts, Maryland, Nevada, New Mexico, and Minnesota are in serious trouble.

Ironically these are states that received hundreds of millions of dollars in Federal funds, most of which has now been wasted. . In all, the Feds have doled out $5 billion in taxpayer-funded Federal grants to 17 states to establish their own exchanges. Vermont is rapidly blowing through its’ $200m allotment, with a still non-functioning exchange. Hawaii spent $205m in federal funds, all now wasted. Maryland, New Mexico and Nevada collectively spent $405m in federal funds.

The Obamacare exchanges are not holding down health care costs, either. Insurers in the six states where rate requests have already been filed are seeking to raise rates an average of 18.6% next year. Blue Cross Blue Shield of Tennessee is seeking a 36.3% premium increase for its members who comprise 70% of the market. Humana in Tennessee is asking for a 15.8% increase. Maryland’s CareFirst is seeking nearly 30% more for the 80% of exchange members it covers. Oregon insurers are seeking an average 23% rate increase.

In Vermont, Blue Cross and Blue Shield is seeking increases that range between 4.7% and 14.3%, with an average of 8.4%. However, Vermont’s exchange premiums are some of the highest in the country, and already unaffordable for many.

Your continued support:

There are many well-funded groups on the other side who are spending a lot of money to support health care reform. VHCF is a grass-roots organization that relies completely on supporter donations to remain in business. We receive no funding from the big-money groups.

There is no doubt that the well-funded (VT NEA, VPIRG and VT Hospital Association) groups and this Governor would like to see VHCF go away. But we cannot and, with your help, we will not.

We are grateful for the support we have had, but without continuing support from grassroots Vermonters like you, we cannot continue to be effective at exposing Governor Shumlin failures with Vermont Health Connect and the consequences of the All Payer Waiver on Vermonters especially those on Medicare.

Our efforts and your support helped to stop single payer, but we are still a long way from restoring freedom of choice in health care and keeping the government from getting between you and your doctor.

Please take a moment now to give generously by clicking the link at the top of the page, or sending a contribution to: Vermonters for Health Care Freedom, PO Box 1515, Montpelier, VT 05601. Thank you.

Darcie L. Johnston
Founder, VHCF

"It amazes me to hear politicians say the present Vermont health care system is completely "broken" when by most national measures Vermont's health and healthcare always come out at the very top of the 50 states. Having served nearly thirty years in a solo orthopedic surgical practice involving call every night and 7 day a week coverage for Gifford Medical Center I proudly treated every patient whether they could pay or not - some even at home. My colleagues, nurses and staff at Gifford Medical Center equally serve their fellow Vermonters 24/7 without regard to ability to pay. It denigrates us all when our efforts are so callously categorized for political advantage in pursuit of the Holy Grail of a single payer which may or may not help solve the problems of health care funding."

William Minsinger MD, Randolph, Vermont

  • 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.