What are the Vermont health care financing plans, and why are there two?

In 2011, the Legislature enacted a plan for moving toward a single payer system in Vermont. Act 48 put in place the broad outline of a plan for universal coverage, created the Green Mountain Care Board to address health care costs, and created the Exchange as a stepping-stone toward Green Mountain Care, a system of universal coverage for Vermonters.
The financing plans required by Act 48 are posted here: http://hcr.vermont.gov/library
The administration delivered two plans to the Legislature Thursday afternoon.
o The first plan (the 2014 plan), lays out proposals for implementing the federal Affordable Care Act by fully-developing and fully-funding the Exchange.
o The second plan (the 2017 plan) describes costs and potential funding sources for Green Mountain Care.
The 2014 financing plan
The 2014 plan addresses three funding needs:
1. Funding of Vermonts Exchange (Vermont Health Connect), including resources to support Vermonters in understanding the Exchange and their choices for coverage;
o Federal funds to design and establish Vermont Health Connect already have been secured full state cost begins in 2015
o Minimal additional funding for SFY 2014 - $400,000 for Navigators
o Full state responsibility for Exchange costs in 2015.
2. Funding to assure that coverage through Vermont Health Connect will be affordable for low and middle-income Vermonters, including those who have been covered previously by VHAP and Catamount Health;
o The Affordable Care Act (ACA) provides significant subsidies for low and middle-income Vermonters.
o However, the Administration recommends an additional $10.5 million in SFY 2014 to assure affordability of coverage for Vermonters purchasing coverage through Vermont Health Connect.
3. Funding to address the cost shift between Medicaid and private payers.
o The Administration is proposing to alleviate pressure on private insurance premiums by almost $25 million in SFY 2014 during the transition to a more equitable publicly-financed universal health care system.
Overall, the Administration is able to fund these measures through a mix of savings resulting from the Affordable Care Act and minor revenue increases.
The 2017 financing plan
Vermont is developing a plan to provide universal health care coverage to all residents (primarily through Green Mountain Care) beginning in 2017.
Key conclusions and recommendations of the 2017 plan are:
 The current distribution of health care costs in Vermont is inequitable and is rising at an unsustainable rate. We cant afford to continue todays system.
 Today we release a report which will show that all Vermonters can have quality, comprehensive health care at a lower cost and pay health care providers fairly
o Green Mountain Care will:
 Cover the uninsured
 Provide better coverage for Vermonters, including those on Medicare
 Reduce out-of-pocket costs for many Vermonters
 Right now, some Vermonters pay almost 50 percent of the costs of their care ON TOP OF premiums
 Pay providers more fairly, eliminate the cost-shifting, reduce the administrative burden on providers
 And still save $281 million over the first three years
The estimated cost of GMC is
 $3.5 billion
 Only $1.61 billion would need to be financed at the state level due to predicted federal contributions
 This is far less than the approximately $3 billion Vermonters and their employers spend on premiums and out-of-pocket costs today
Moving Forward
 The administration is not asking the legislature to endorse a specific financing plan this session.
o We expected to get the ACA waiver date moved from 2017 to 2014 no Congressional action
o Given that, it is too early to create a plan now.
 We have outlined potential revenue sources and considerations for choosing revenue sources in the report.
 We need to gather broad input on financing. Publicly-financed health coverage will make sense to most Vermonters, but we have to explain it and we need input on how best to spread the cost burden.
 Many Vermonters have questions about how single payer financing will work, and many people do not understand health care financing under the current system.
 The administration will announce on February 15th its public process for moving forward in the discussion of how to finance universal coverage in 2017.
January 24, 2013