(Host) Governor Jim Douglas plans to focus on a variety of health care issues during his State of the State address Tuesday afternoon. One of the plans is very controversial.
VPR’s Bob Kinzel reports.
(Kinzel) Health care is expected to be a major priority because most projections show that health insurance costs will increase by roughly 15 percent this year and in each of the next few years. Douglas says it’s important to make certain that the state’s Medicaid program is on a sustainable track. A new program requiring participants to pay a monthly premium for their coverage has just gone into effect. The governor will also encourage the creation of wellness programs to help reduce a growing incidence of obesity in the state, a situation that has a direct impact on health care costs.
Douglas also believes that health insurance costs can be moderated if the state takes steps to create more competition in the marketplace. To accomplish this goal, the governor wants to make changes in the state’s community rating law. The legislation, which was adopted in the 1990s, requires health insurance companies to charge the same premium regardless of the age or gender of the consumer. It was passed after some smaller companies offered low rates to young healthy people and declined to cover older and sicker consumers – a procedure known in the industry as cherry picking.
Douglas wants to allow companies to have more flexibility in determining their rate structure; that’s something that the law permits in cases of gender, age and lifestyle habits of a consumer:
(Douglas) “I would to suggest some flexibility in premiums so that they can incent healthy living. We don’t have an option now under our statute where an insurance company can offer a discount for not smoking, for exercising and maintaining a certain weight loss. So I think insurance companies ought to be able to offer those policies. Life insurance companies can, but health insurance companies now aren’t allowed that flexibility.”
(Kinzel) Senate Health and Welfare chairman Jim Leddy (D-Chittenden County) strongly opposes any changes to the community rating system. Leddy says he’ll introduce a bill at the beginning of the session that will require legislative approval for any change:
(Leddy) “The folks who are going to benefit are going to be relatively few. Those that are going to end up paying more are generally going to be older workers and workers with health care problems – and if their rates go up then their options are few. Where do they go? So that to me is a totally unacceptable way to address this problem.”
(Kinzel) Leddy says he plans to hold a public hearing at the end of the month at the Statehouse to allow members of the state’s business community to testify about how rising insurance rates are affecting their ability to operate in Vermont.
For Vermont Public Radio I’m Bob Kinzel in Montpelier.