Let me first say that I’m extremely disappointed that at this point a universal health insurance plan is not under serious consideration in Congress. This ensures we will continue to have the most bloated administrative costs found anywhere in the industrialized world. I am also disappointed that the Senate Health Committee rejected a proposal to allow up to five states to be granted waivers to use federal dollars to provide universal coverage in whichever way those states’ legislators and Governors see fit. Senator Sanders has fought to keep this idea alive, and I hope he prevails so Vermont can seek to become one of these demonstration states.
I believe a “public option” is absolutely critical if we wish to reform our health care system. Otherwise there will simply be no meaningful check on the costs charged by the private insurance companies. Vermont’s experience with Catamount Health illustrates on a small scale what happens without a public option.
Just three years ago, the Vermont Legislature considered and rejected a public Catamount option to compete against Blue Cross/Blue Shield and MVP. Consider our experience since then.
In 2006 the Legislature’s health care consultant, Dr. Ken Thorpe, projected that the unsubsidized premium for Catamount would be $279 per month. Because reimbursements would be tied to Medicare rates, he projected an annual rate of growth in premiums of 3.5% to 4.5% depending on trends in pharmaceuticals.
However, since CHC began in 2007, we’ve had a very different experience:
- the premium awarded to BC/BS and MVP for 2008-09 is $393/month – 35% more than Dr. Thorpe’s worst case scenario.
I expect you’ll agree with me that a competing public Catamount option would not have permitted a 35% upcharge over worst-case projections.
The Vermont experience is inconsistent with trends in health care spending specifically and the economy as a whole:
- BISHCA’s January 2009 health expenditure survey pegged Vermont’s 2007 growth in health care spending at only 4.5%.
- According to a June 2008 article in the New England Journal of Medicine, the per person cost of Massachusetts’ Commonwealth Care was $352.43 a month, compared to the $393.11 allowed for Catamount, this despite the fact that Massachusetts’ per capital health costs are above the national average, while Vermont’s are 90% of national.
- Finally, a study of President Obama’s original health care proposal conducted just a few months ago by the Lewin Group put the 2009 cost of an unsubsidized single premium for a policy comparable to Catamount at $298/month – a level comparable to Dr. Thorpe’s estimate adjusted by his worst case rate of growth. Indeed, Vermont’s premium should be 10% lower because its per capita health care expenditure is 90% of the national rate.
I hope that the Congress will learn from Vermont’s experience and include a public option. If they do not, here in Vermont we will need to overcome the timidity of earlier Legislatures and revisit a public Catamount option to bring affordable health insurance to our small businesses, uninsured, and underinsured residents. We literally cannot afford not to.