Blue Cross Blue Shield Vermont
LEGISLATIVE REPORT
Special for Thursday, May 11, 2006

The 2005-2006 Vermont General Assembly adjourned for the biennium late Wednesday night after resolution of key legislation, including health care reform and a FY2007 spending bill that includes scholarships for Vermont college students. Disagreements between Governor James Douglas and the legislature over health care reform and scholarship funding had threatened to delay adjournment.

A breakthrough agreement Tuesday between the legislature and the Governor on health care broke the logjam and cleared the way for agreements on other issues and adjournment.

Douglas late Friday had vowed to veto the legislature’s conference committee report on health care reform (H.861) unless changes were made to accommodate his demand that an initiative in H.861 to deliver health benefits to uninsured Vermonters (Catamount Health) be through a private market rather than operated as a state program.

Legislative leaders and administration officials engaged in a last ditch effort over the weekend and Monday to reach a compromise and announced an agreement at a Tuesday afternoon joint press conference in the Governor’s ceremonial State House office before a crowd of interested media, legislators and lobbyists. For procedural reasons, the compromise agreement was introduced as a separate bill (H.895) to amend H.861.

The agreement calls for Catamount Health to be a separately rated insurance pool for people who are not currently insured and cannot obtain coverage through an employer sponsored plan. The legislation will provide premium subsidies on a sliding scale for those with low incomes, and also establishes the benefits that will be offered. Additionally, it sets reimbursement rates to providers at 110 percent of Medicare payments. A key point of the compromise allows the commissioner of BISHCA to require the participation of Blue Cross and Blue Shield of Vermont and MVP Health Plan in the new Catamount Health program, on a risk basis, if those companies do not voluntarily participate. Both organizations had previously indicated to legislative conferees that they intend to participate in Catamount Health. The new benefits will become available to the uninsured by October 1, 2007.

The health care reform plan passed in H.861 and H.895 also:

  • Centralizes health care reform activities under the management of the Administration Agency;
  • Requires development and implementation of a five-year strategic plan for the “Blueprint for Health,” the chronic care model that is designed to become part of the care management protocols of insurers, providers and the state;
  • Creates a premium subsidy program to assist enrollees in the Vermont Health Access Plan and uninsured people with access to employer-sponsored insurance (ESI) to enroll in their group health insurance programs;
  • Creates the Catamount Health program, described above;
    • This includes the following provision: “Premium rates shall be actuarially determined considering differences in the demographics of the populations and the different levels and methods of reimbursements for health care professionals . . . A rate shall be approved if it is sufficient not the threaten the financial safety and soundness of the insurer . . . “
  • Creates a health care reform commission to monitor the effectiveness of Catamount Health and recommend to the Legislature further changes that may be required to achieve universal health care coverage in Vermont;
  • Creates a task force to identify ways to reduce the cost-shift from government programs and uninsured individuals to private health insurance rates, and to assure than any reductions in the cost shift are captured in lower health care costs;
  • Creates a state sponsored reinsurance pool for non-group coverage, providing reinsurance for 5 percent of the claims costs for each carrier’s non-group population;
  • Requires a study of how to rationalize the non-group market segment by eliminating the segmentation that currently exists, i.e, elimination of the Vermont Safety Net program and imposition of a single regulatory structure for non-group carriers;
  • Lays the groundwork for a mandate that all Vermonters acquire health benefits by 1/1/2011 if 96 percent of the population is not covered by 2010;
  • Allows small group carriers to vary from their community rates by providing “healthy lifestyle” discounts when appropriate;
  • Requires a contribution in lieu of premium payments for employers who do not provide group health insurance for their members. Initially, the assessment would be $365 per year for each employee. Employers would not be charged the assessment on their first eight employees;
  • Creates processes for administrative simplification through the development of common claims forms and processes and provider credentialing activities.
This will be the last regular Legislative Report this year. A final report listing key legislation impacting health benefits plans and health insurers enacted in the 2006 session will be issued once the constitutional time frames for gubernatorial signings and vetoes have passed.

For more information on legislative proposals, visit the Blue Cross and Blue Shield of Vermont website at www.bcbsvt.com or call Leigh Tofferi at (802) 223-6131 or Kathy Parry at (802) 371-3205. If you wish to discontinue receiving these updates or know of anyone else who would like to receive it, please call Kathy Parry or send an e-mail to webmail@bcbsvt.com
Blue Cross Blue Shield Vermont