Despite two days of heated debate the Vermont Senate surprised no one by passing H.559, the Health Care Exchange bill, with the following provision intact: "Â§1811(b) No person may provide a health benefit plan to an individual or small employer unless the plan is offered through the Vermont health benefit exchange and complies with the provisions of this subchapter." This single sentence makes the Vermont Exchange mandatory -- it outlaws private insurance offered outside the Exchange as of Jan. 1, 2014.
But why was it so important for Vermont to make the Exchange mandatory? The federal Affordable Care Act (ACA) requires the creation of Exchanges and every other state in the nation is making theirs voluntary. Indeed, the ACA appears to require the continued existence of off-exchange plans, as stated in Section 1312(d) of Title I:
"(1) CONTINUED OPERATION OF MARKET OUTSIDE EXCHANGES.--Nothing in this title shall be construed to prohibit--
(A) a health insurance issuer from offering outside of an Exchange a health plan to a qualified individual or qualified employer; and
(B) a qualified individual from enrolling in, or a qualified employer from selecting for its employees, a health plan offered outside of an Exchange."
So why would Vermont apparently violate the federal law and force Vermonters to drop their current health insurance plans -- whether they want to or not -- to sign up for coverage in an untested and undefined experimental government controlled marketplace? A marketplace that will seriously constrain consumer choice, and for most of us, increase our cost?
As is often the case in politics, the answer is money. Federal money. Hundreds of millions of dollars of federal money. Statements by senate advocates for H.559 made it clear that notwithstanding federal law, and notwithstanding the pleas from almost every Vermont business association and Vermonters for Health Care Freedom to make the Vermont Exchange voluntary, the state's need for free federal dollars to prop up Green Mountain Care overrides every other concern.
Green Mountain Care (GMC) was passed last year as Act 48. It is a plan for a single-payer government monopoly health care system, scheduled at this point to take effect on Jan. 1, 2017. But the Legislature has neither seen nor required a budget for GMC. And the governor has yet to explain how it will be funded.
Thanks to the debate on H.559 we now know one key funding source -- the H.559 Exchange. The federal Affordable Care Act provides tax credits and subsidies to middle and low income individuals and families who purchase insurance through the Exchange. This support is designed to replace the typical employer contribution toward health insurance premiums, so if employers decide to drop the health insurance benefit for their employees, the low to middle income employees can still purchase insurance directly from the exchange and afford the premiums.
When Vermont transitions from Obamacare to Green Mountain Care in 2017 the state will be able to 'claw' these federal subsidies and tax credits into the state treasury and use the money to fund Green Mountain Care. To maximize these revenues Vermont must first force everyone into the Exchange, and convince as many small businesses as possible to drop their employer-based health benefits and send their employees into the exchange as individual purchasers.
How will the Shumlin Administration convince most businesses to drop their employment-based plans? They can either make dropping coverage financially attractive or they can make the employer-based plans in the Exchange as unattractive as possible, or both.
Sen. Anne Cummings (D-Washington), an H.559 and GMC supporter, had it right when she said supporting H.559 was an "act of faith, like driving down a highway in a thick fog and hoping you don't hit something." A majority in the Vermont Legislature is on record as willing to take that risk, for the hoped-for reward of more federal dollars to prop up GMC. But they should remember they are bringing 100,000 Vermonters along for the ride. The exercise of less faith and more caution would seem advisable.
Jeff Wennberg is the executive director for Vermonters for Health Care Freedom.