A goal of Green Mountain Care -- the primary goal, according to Governor Peter Shumlin -- is to control the total amount of money that Vermonters pay for health care. Back in November, an independent report by Avalere Health concluded that the official estimate of $1.6 billion in new taxes necessary to replace premiums and pay for a single payer healthcare system was too low. The real number is more likely to be in the $1.9 billion to $2.2 billion range.
This is significant because, if the Avalere numbers are correct, adopting Green Mountain Care will not save Vermonters anything. The single payer system would end up costing us even more than the current system, as messed up as the current system is. There's not a lot of room for error.
However, nobody is discussing a line item that could blow the doors off the total cost of healthcare in Vermont under Green Mountain Care. This is the cost of the supplemental insurance policies that will be necessary to "wrap around" the benefits offered under the single payer system.
Whenever supporters of single payer are challenged about the workability of a such a system, they invariably point to Medicare. Single payer healthcare is really just "Medicare for All." But in reality, most Medicare recipients require some form of supplemental insurance coverage. According to a Kaiser Family Health report released in April 2013, 88% of Medicare recipients had some form of supplemental insurance, either a privately purchased MediGap plan, an employer-based retiree plan, or through Medicaid. The average cost of a MediGap plan in 2010 was $183 per month ($2196 per year).
To put this in perspective, if Green Mountain Care is truly an "everybody in" policy (excepting 107,000 Vermonters over 65 covered by Medicare), and we apply the Kaiser statistics for supplemental coverage, we're looking at as much as a billion dollars in additional healthcare expense coming out of Vermonters' pockets under Green Mountain Care. Even taking into account a younger, healthier demographic needing or desiring less supplemental coverage, we still have to anticipate expenses in the tens to hundreds of millions of dollars. So far, this very large tab appears to be off everyone's radar.
Who will be expected to pay? Individuals? Businesses? Taxpayers?
Under the Medicare single payer example, 14% of users receive supplements through Medicaid and 14% through Medicare Advantage. But, under Green Mountain Care, Medicaid will be part of the single payer system, not a supplement to it, and there can be no Medicare Advantage-like program in a system with no private insurance market.
25% receive supplements through an employee retirement arrangement, but Green Mountain Care beneficiaries are not retired. So, despite the goal of severing the relationship between employment and healthcare, you can expect to see serious pressure on Vermont businesses to supply "wrap around" policies for their employees, particularly if those employees are experiencing a decrease in quality of coverage under Green Mountain Care. Unionized teachers come to mind here.
It's impossible to know exactly what kind of supplemental policies Vermonters will need under Green Mountain Care or what they will ultimately cost because we don't know exactly what Green Mountain Care will cover. This is a problem. Will dental and vision care be part of the package? Mental health? Long-term care? Travel outside of Vermont? We need answers to these questions, and the sooner we get them the better.
But there are some things we do know....
Dr. William Hsiao's 2011 report to the legislature specifically mentioned the need for "wrap around" policies. Governor Peter Shumlin and Anya Rader Wallack (then Chair of the Green Mountain Care Board) stated categorically that supplemental insurance policies would be allowed under Vermont's single payer system, so these policies are expected to be a part of the landscape. We also know that Dr. Hsiao warned that a comprehensive benefits package would be unaffordable for the state, hence his recommendation for a "basic" benefits package.
One thing 2013 taught us is that we can't afford to be surprised by known but unsung aspects of grand healthcare reform plans -- like learning too late that we can't, in fact, keep our plans if we like them, or that our new "affordable" policy will cost us more than the old unaffordable one. Individuals, employers and taxpayers have a right to know if, in addition to the billions of dollars in new taxes Green Mountain Care will cost us, we will also need to plan for spending even more for supplemental health insurance policies. The only way to find out is to ask hard questions and demand clear answers.
How's that for a New Year's resolution?
- Rob Roper is president of the Ethan Allen Institute