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Health care for the rest of us

Posted December 8, 2006

The news has been pretty grim for employers in recent weeks. Health care costs are rising by as much as 33 percent in some plans and for some groups.

Just when the Legislature thought it could let health care rest for a biennium while Catamount Health, what lawmakers and Gov. Jim Douglas call landmark legislation, was implemented, along came the fracas between the Vermont League of Cities and Towns (VLCT) and its health care trust — that includes both municipalities and private companies — and Blue Cross/Blue Shield (BCBS), the state’s largest insurer.

In short, BCBS told VLCT’s health care administrators that its rates were going up by a third next year. A competing offer from CIGNA was made that VLCT liked better, so they switched. BCBS made a second offer, with rates far less than 33 percent, but still VLCT officials went with CIGNA, the state’s second largest insurer, to save money.

In the meantime, BCBS has offered some of the larger towns and cities — such as Bennington, Brattleboro, and Barre — better rates than they had offered VLCT originally. One has to wonder if they wanted to raise their rates for all by a lot, and then for some by only a little, where is the burden going to fall? BCBS doesn’t just pick a rate increase by throwing a dart at a wall, it’s a little more complicated than that. And, suffice it to say they are likely to find ways to make up the difference in rates from somewhere, or someone, else, which means even higher rates for the rest of us. If not this year, then 2008.

Don Mayer, co-founder of Small Dog Electronics and chairman of Vermont Businesses for Social Responsibility, has long advocated that health care should be decoupled from employment. He argues, convincingly, that entrepreneurs are better at their business speciality than choosing and administering health care plans for their employees. It’s also costly. What used to cost a business $1,500-$3,000 per employee is as much as $12,000 a year to cover a family.

This steep rise in insurance cost is likely to end up being passed along to employees, and to consumers through higher prices for goods and services. But, they will be the ones who will be poring over comparative spreadsheets and wondering, why? There are plenty of things business owners and entrepreneurs do well, but being a health care broker usually isn’t one of them.

So, what can Vermont do?

Push more for the marketplace driven system? Even so-called health savings account plans are seeing jumps in premiums of 15 to 20 percent, not an enticing figure.

And, while Vermont has very little competition in health care insurance providers, more importantly hospitals have regional monopolies on most services, so there is little chance of seeing any major reductions in prices by offering more insurance products from more insurers. As one health care watcher aptly put it, “Increasing the number of Pepsi distributors when you’re still selling the same amount of Pepsi isn’t going to lower the cost of Pepsi.”

Some argue that a single payer system is the way to go, and still believe a state the size of Vermont can craft a health care plan that offers choice of doctors, hospitals, and still lowers costs for everyone.

The bottom line is that health care is going to cost someone, somewhere, somehow. Those who argue that going to a single payer means higher taxes are right. So are the ones who say overall costs across the system are likely to go down by cutting out the administrative bloat.

And, we all pay for health insurance right now — through local taxes to provide health care for cops, firefighters, road crews, town clerks, and teachers, among others. We also pay for the “charity care” through the rates charged to us by hospitals and insurers.

But, you would think that with all this interconnectedness, that with $3 billion being spent annually (a rise of about $1 billion in the past five years) on health care, that we, as Vermonters, could figure out a way to make sure everyone was able to see the doctor when they needed one.

These are not easy questions, but health care costs are driving up the cost of everything beyond the ability of many to pay.

It’s time for lawmakers to craft solutions for the rest of us, or we’re all going to end up among the uninsured.

 

CORRECTION: Don Mayer is the current chairman of Vermont Businesses for Social Responsibility. His title was incorrect in a story in the Dec. 1 edition of the Vermont Guardian.