Health Care Exchange Heads to Senate Floor

April 23, 2012

Rutland Herald

By Peter Hirschfeld
Vermont Press Bureau
MONTPELIER — The Senate this week is on course to approve a health care bill that could soon change the way thousands of Vermonters purchase insurance.

Sen. Claire Ayer, chairwoman of the Senate Committee on Health and Welfare, said Sunday that she expects a floor debate either today or Tuesday on legislation establishing the so-called “health benefits exchange.”

Likened to a health insurance version of the Hotwire travel deals website, the federally mandated exchange will, according to supporters, create a highly regulated marketplace designed to offer consumers an array of quality, affordable options.

Federal law makes the exchange voluntary, preserving the ability of businesses and individuals to purchase less-regulated plans sold outside it. Not so in Vermont, where the Shumlin administration says it wants to use Vermont’s exchange as a bridge to a single-payer health care system.

Legislation headed to the Senate floor this week (a similar bill passed easily in the House earlier in the session) would require individuals and businesses with fewer than 50 employees to purchase insurance from the exchange. Those requirements would place slightly more than 90,000 people in the exchange when it comes online in 2014.

Ayer, an Addison County Democrat, said that by making membership in the exchange mandatory, Vermont will be able to use the exchange infrastructure as a forerunner to the publicly funded, universal system of care envisioned in the single-payer legislation passed last year.

“We’re using the (exchange) as a pivot point to move into the single-pipe system,” Ayer said. “One of the really important things about our path forward is realizing the savings we have calculated in administrative costs. And having as many people inside the exchange as possible will allow us to move toward that single administrative structure.”

Ayer said there are other benefits to being inside the exchange, such as the availability of federal tax credits for individuals making less than 400 percent of the poverty level — about $90,000 for a family of four.

But the small-business mandates in the Senate bill have generated opposition from key industry trade groups, including the Vermont Chamber of Commerce. Those groups say that by forcing small businesses into the exchange — about 16,500 Vermont businesses fall into the 50-or-fewer employees category — Vermont unnecessarily constrains the range of options available to business owners.

Jeff Wennberg, executive director of the anti-single-payer group Vermonters for Health Care Freedom, has said that Vermont businesses currently can choose from scores of health plans.

Under the Senate proposal, he said, the number of options will be cut to fewer than 18.