(05/15/06) The press prophesizes that compromise on bills between Gov. Douglas and the legislature serves Vermonters best. But the recent health care reform compromise, modeled partially after the Massachusetts misfire, doesn’t make health insurance affordable. Rather it is government run health care in disguise that’s unconstrained by reality.

Why aren’t the government incentives in the Catamount Health Plan compromise the solution to our health care problems? It seems their incentives are in the wrong place. Five numbers stand out in today’s reform package:

1. $365, the annual penalty per worker an employer must pay who doesn’t offer employee health insurance. $365 is affordable; who wouldn’t like to purchase health insurance for that amount. If that’s what it costs that’s great and nobody would be uninsured.

2. $250, the individual deductible on the state subsidized health-insurance policy under the reform bill. $250 represents how much a person is responsible for out of pocket costs; they are insulated from the real costs of health costs.

3. $720, the annual premium if your income is less than or equal to 200% of the Federal Poverty Level. $720 represents the annual individual’s contribution for the lowest cost plan for those making ~$20K or less.

4. $6,200, the average annual expenditure on health care for a Vermont resident in 2006. $6,200 is the cost for health care today in Vermont that insures we get the best care that money can provide.

It’s a great policy if you can get it, but someone has to pay the bill and that’s you, the taxpayer. Anyone who faces a $250 deductible has no incentive to restrain spending. This plan protects all existing government mandates, creates a bureaucracy to manage a new taxpayer subsidized insurance product with a similar plan design that is bankrupting major corporations like Ford and General Motors.

What’s lacking is a reward for doing the right thing. With patients being immune from costs that are paid by a third party payer, there’s no incentive to spend less and spend wisely.

Health insurance costs in this state for a single person costs about $400 a month compared to $100 a month in Iowa and Wyoming. Nothing in the health care reform package will reduce the costs of health insurance to those levels; it’s will increase the gap further.

A more innovative solution would be to deregulate the health insurance market, allow the sale of a basic policy without mandates and make insurance so affordable that it will attract the 2 percent of Vermonters who are uninsured either because they can’t afford private coverage or earn too much to qualify for Medicaid.

The person rather than government should be responsible for their care and this approach should be the foundation for health care reform, whether it’s for Medicaid or private health insurance. After years of debate, hiring health care facilitators in the legislature and dozens of conferences and studies, is this the best lawmakers can do?

Vermonters want affordable health care but not a raid on their checkbook by the government. Only when the size of the tax increase becomes clear will Vermonters realize they have paying the bill. We already lead the nation in total state taxes per capita. When will people say enough?

Employers, insurers and Congress are leading the way to a consumer driven system that expands coverage, increases choices and reduces costs. The compromise Catamount plan doesn’t achieve that objective. It’s not reform, but a costly boomerang that will come back to bite us.

Frank Mazur
South Burlington

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Frank Mazur, a small business owner and former state representative, is chair of the advisory board of Vermont FreedomWorks.