House gives preliminary approval to health care plan

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(Host) The Vermont House gave preliminary approval on Tuesday to a scaled down version of Governor Jim Douglas’s health care reform plan. The proposal offers tax credits to small businesses that currently don’t offer health insurance to their employees. During a full day of debate, House members defeated a Democratic alternative.

VPR’s Bob Kinzel reports.

(Kinzel) The debate centered on two very different approaches to encourage small businesses to provide health insurance to their employees. According to recent estimates, approximately 60,000 Vermonters don’t have any insurance coverage, about 10 percent of the state’s overall population.

The governor’s plan, which was endorsed by the House Health and Welfare Committee, attempts to reduce the uninsured population by providing tax credits to small businesses that don’t offer coverage at this time. The businesses would create new health savings accounts for their employees. The cost of the program is estimated to be between $5 million and $10 million dollars. The proposal also allows health insurance companies to discount premiums by as much as 10 percent to consumers who adopt a healthy lifestyle.

Health and Welfare Committee Chairman Tom Koch says the plan should be an effective way to help control health care costs:

(Koch) “And instead of just fiddling around and figuring where we can get more money to pay for the rising cost of health care, I’m proud of this bill in that it tends to reduce the cost of health care as well as increasing access and that’s extremely important.”

(Kinzel) But Democrats argued that the plan wouldn’t cover enough people and was too costly. Lincoln Representative Michael Fisher offered the Democratic alternative. Under this plan, uninsured individuals and small businesses would be able to purchase policies that are roughly 25 percent cheaper than existing premiums.

Fisher says this savings would be achieved by not subjecting these policies to the existing medical cost shift – that’s money that private insurers pay for uncompensated care and underpayments to Medicaid and Medicare. Fisher says the program doesn’t use any state tax dollars and would cover twice as many people as the Republican plan:

(Fisher) “What I’m proposing here is that we give our uninsured small businesses and our uninsured Vermonters a break that will allow them to take the personal responsibility of covering their own health care needs, without the burden of the medical cost shift.”

(Kinzel) After several hours of debate, the House defeated the Democratic plan by a vote of 80 to 61. The House then gave its approval to the tax credit approach. The measure will come up for final approval in the House on Wednesday.

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

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