Governor optimistic about health care reform compromise

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(Host) Governor Jim Douglas says he’s optimistic about the chances for a comprehensive health care reform bill this year after reviewing a new draft plan developed by Senate Democratic leaders. The proposal is designed to reduce the number of uninsured people in Vermont by imposing a payroll tax on businesses that don’t offer coverage to their employees. This money would be used to help fund a basic health care plan for these employees.

VPR’s Bob Kinzel reports.

(Kinzel) What a difference a week can make at the Statehouse. Last week, Governor Douglas threatened to veto the House’s health care reform plan because it called for a publicly financed system in several years. Douglas said the plan would destroy the state’s economic development base because it would result in oppressive tax burdens.

Now the bill is over in the Senate where Democratic leaders are taking a very different approach to the financing question. The Senate plan is designed to provide coverage to the roughly 60,000 uninsured Vermonters by creating a new health program that would offer a bare bones benefit plan to people who work for companies that don’t offer coverage.

The $40 million plan would be financed by placing a three percent payroll tax on businesses that don’t provide coverage. The tax would also be imposed on the employees of these businesses. Senate President Pro Tempore Peter Welch:

(Welch) “We want everybody who uses the health care system to contribute to the cost of it. And right now individuals employers and taxpayers pay the $3.2 billion price tag of our health care system. Some employers pay a lot and some employers pay nothing. Some individuals pay nothing and everyone benefits from the infrastructure that we’ve built up in our health care systems so we really think it’s a matter of fairness that every single person should be contributing to the cost of our health care system on the ability to pay.”

(Kinzel) Douglas has proposed a more modest approach to providing coverage to the uninsured. His proposal would cover roughly 20 percent of this group at a cost of roughly $17 million. The money would be raised by placing a tax on existing private health care insurance premiums. But he’s enthusiastic about the Senate plan and says it provides “a basis for an agreement:”

(Douglas) “So I’m very encouraged to hear Senate leaders talk about a different approach – something that doesn’t throw the baby out with the bath water but builds on the strength of our existing system, focuses on the problem areas – namely the lack of coverage for a percentage of our population and also the cost of health care that is continuing to escalate at rates multiples of inflation.”

(Kinzel) Senate leaders hope to have the proposal on the floor for debate in about two weeks.

For Vermont Public Radio, I’m Bob Kinzel in Montpelier.

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