Legislature hopes for compromise on health care

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(Host) Legislative leaders are hoping to adjourn by Saturday night. Among the biggest obstacles that remain is a compromise agreement on health care reform.

VPR’s Bob Kinzel reports:

(Kinzel) One of the key challenges facing the House-Senate conference committee on health care is finding a compromise on how to pay for a plan to provide primary and preventative services to the roughly 35,000 uninsured Vermonters who aren’t eligible for Medicaid. The next big question is whether the compromise will be acceptable to Governor Jim Douglas.

The Senate wants to impose a three percent payroll tax on companies that don’t offer health insurance to their employees. The workers would also have to pay this tax. But the Governor strongly opposes this approach because he thinks the payroll tax will severely hurt the state economy.

Instead, Douglas is backing a three percent tax on all health insurance premiums. The Democrats reject this plan because they think these costs will be passed along to consumers.

Senate president pro tem Peter Welch says he’s willing to consider other tax options as long as the final plan places some responsibility on those companies that don’t offer insurance.

(Welch) “If the alternative tax means that people who are already paying, pay more, I think that’s wrong. So if there’s an alternative tax package where were asking in some other way those employers and individuals who are not contributing at all to pay a fair share, then I’m open to that. But that’s the principle – universal participation. And that’s both on the benefit side and on the obligation side.”

(Kinzel) The House bill didn’t call for a specific tax increase. It included a study to look at the best way to publicly finance the state’s entire health care system. House Health Care chairman John Tracy says any final compromise should include this study and he thinks a progressive payroll tax may be a good interim funding source.

(Tracy) “We all want to help our neighbors. We all do it. And we’re ok with it. But you do want people to help out too. And I think that’s the whole concept here – the equity piece, the fairness piece. And so I think it has a lot of credibility. I think it makes sense to the average Vermonter. And ultimately the legislation that we pass – that’s the test it has to pass. Does it make sense to the average Vermonter? Is this the fairest way to do it?.”

(Kinzel) Governor Douglas says he’s open to different funding options, but he says the payroll tax is off the table because he feels it will place too great a burden on many small businesses.

(Douglas) “The margins are quite low. Many small Mom and Pop operations and a payroll tax on the order of magnitude that has been proposed would be a problem, let alone the higher payroll tax that’s inevitable under the Senate’s expanded plan over the next four years. Putting more taxes on people who can least afford to pay them is not the way to go.”

(Kinzel) Legislative leaders are hoping to reach a final agreement in the next day or two. The question is whether or not that compromise is something that the governor can sign into law.

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

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