Calvin Coolidge once said that social progress is more likely to end with a government program than begin with a government program. Vermont is fast approaching universal access for health care through government financed health care but, in the process, it is shifting the cost of this care to the business and individual market which is reflected in double digit insurance premium increases. In the last two years alone, the cost of health insurance for state employees has almost doubled.

Current health care policy is also adversely affecting our economy. The growing burden caused by mandates and cost shifting has destroyed the small group and individual market and insurance carriers refuse to do business in Vermont. We’re proceeding down a slippery slope of more government reliance and less self-sufficiency.

A sound reform of health care in Vermont is required which will revive a competitive health insurance market. Also, a market driven consumer health care policy will create the innovative solutions that address utilization, at a price consumers are willing to pay. Consumers would be encouraged to live healthy lifestyles and be rewarded for maintaining wellness.

I introduced a bipartisan health insurance reform bill in the House with 75 co-sponsors, which will create an approach to bring more people back into the marketplace. The bill reflects the free market health care principles recently agreed to by Speaker Walter Freed and Senate President Peter Shumlin. It probably won’t reduce insurance premiums dramatically, but will decrease the increases.

The bill relaxes community rating so that insurers can reward healthy lifestyles and penalize those who smoke. It will offer lower rates to the young and permit higher charges to customers with bad health or dangerous occupations. To address the uninsured and the 1% who suffer from a pre-existing condition which would cause high insurance rates, a high-risk pool will be established to keep premiums affordable.

Another provision will allow insurers to offer a basic and affordable policy without state mandates and require carriers to offer catastrophic coverage with a high deductible. This will reduce premiums, motivate consumers to not only manage health care usage but also make prudent health care decisions. This approach also has far reaching implications because the state could offer vouchers to those who receive government insurance coverage and require them to purchase insurance from private carriers.

To open our insurance markets even further, the bill proposes a multi-state insurance pool, provided those states adopt similar regulations. Also, disclosures about hospitals, insurers and professional providers are offered so consumers can take charge of their health care needs and make prudent cost-effective decisions.

The key to all these reforms is to increase insurance pools, thereby spreading the risk to more people and reducing rates. This will allow insurers more leeway to develop new product offerings with higher deductibles.

To address the Medicaid cost shift, our Joint Fiscal Office will look at our co-payment structure as well as benefit package. Increased co-payments for government coverage will be required to manage utilization and the benefit packages will be competitive and not exceed the average Vermonter’s insurance plan. In a few years, consumers will not have to subsidize Medicaid costs, which is currently about $40M a year.

Insurance companies indicate how difficult it is to negotiate competitive service charges since there is little competition in Vermont. The bill proposes to change the certificate of need criteria to promote fair and effective competition in the health insurance industry, and requires the process to consider the economic burdens on payers. This is a major deviation of state policy and is needed to bring more provider competition.

I think the bill will encourage market driven solutions to make insurance more affordable in Vermont. As Calvin Coolidge implied, we shouldn’t entrust government to regulate health care as a way to control rate increases. We should allow Vermonters to help themselves with market driven solutions that transform our current state health care policy into a more cost-effective one by putting the patient, not government, in the driver’s seat.

Thank you for your calls and notes. I can be reached at 658-3975 (home), 1-800-322-5616 (State House) and via e-mail:

Rep. Frank Mazur
South Burlington