Clavelle says health care plan would end cost shift

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(Host) Democratic gubernatorial candidate Peter Clavelle wants to require all Vermonters to have health insurance. But he says the state will help pay for coverage for those who can’t afford it by capturing the money that’s now spent on health care for the uninsured.

VPR’s John Dillon reports:

(Dillon) Clavelle calls his proposal the Vermonters First Health Plan. The Burlington mayor wants to extend coverage to the 60,000 Vermonters now without health insurance. He’d do it through an insurance plan targeted to small businesses, the self-employed and those without health coverage.

(Clavelle) “By providing coverage for all Vermonters at a rate they can afford, we will cut costs currently being paid for bad debt, charity care and expensive emergency room care for the uninsured. These savings will be captured and used to help those who need it to pay for coverage.”

(Dillon) According to Clavelle, the $90 million plan doesn’t require new taxes. Instead, he says the program would end what’s called the cost shift. That’s the money that’s now spent to cover care of patients, for example, who can’t afford to pay for their emergency room visit. That cost is shifted to insurance companies and then paid for in the form of higher insurance premiums.

The idea is that if everyone has coverage, that cost-shift would end. Clavelle says that without the cost-shift, insurance companies could reap a $90 million windfall. He wants state government to use that money to help people pay for coverage.

(Clavelle) “What this plan says, we’re not going to allow those profits to walk away in the pockets of insurance companies, but we’re going to capture those savings. And what has been a vicious cycle, a vicious cycle of cost shifting becomes a virtuous cycle that allows us to provide coverage to every Vermonter without increasing taxes.”

(Dillon) But Republicans quickly tagged the Clavelle proposal as heavily dependent on new taxes. Neale Lunderville is chairman of Governor Jim Douglas’ campaign.

(Lunderville) “Vermonters are smart enough to know that when Mayor Clavelle talks about capturing $90 million in savings, he’s really talking about taxing Vermonters $90 million more.”

(Dillon) Democrats anticipated the criticism. Scudder Parker is a Clavelle advisor and chairman of the state Democratic Party.

(Parker) “It’s a legitimate assessment. I don’t care whether you call it a tax or a fee, or whatever you call it, an impact fee that recovers that. What I care about is that it’s targeted at the right effort and whether it’s part of a structural solution to the problem and will really make Vermont’s health care system work better, and make Vermont’s businesses actually have an economic advantage.”

(Dillon) Clavelle’s proposal will also require all Vermonters to have health insurance after a three-year transition period. The candidate points out that everyone in the state has to have car insurance. The same should be true, he says, for health coverage.

(Clavelle) “What it means to me is that it’s going to be fair. And that everybody will be covered but everyone will participate. But your participation will be based on your ability to pay.”

(Dillon) Clavelle based his proposal on a plan developed in Maine. The candidate promises to make universal health coverage the centerpiece of his administration.

For Vermont Public Radio, I’m John Dillon in Burlington.

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