Senate rejects Douglas health care reform plan

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(Host) The Vermont Senate has rejected Governor Jim Douglas’s health care reform plan. The vote against the proposal was 22-6. The Senate then gave its final approval to a Democratic alternative.

VPR’s Bob Kinzel reports:

(Kinzel) The two-day debate, which resulted in more than twelve hours of discussion, focused primarily on the differences between the Democrats’ bill and a plan proposed by Governor Jim Douglas. Both proposals are designed to provide coverage to the roughly forty-thousand uninsured Vermonters who aren’t eligible for Medicaid.

The governor’s plan raises twenty-million dollars by imposing a three percent tax on health care premiums. The money would be used to give uninsured Vermonters a subsidy so that they can purchase their own private policy.

Essex Orleans senator, Vincent Illuzzi, sponsored the governor’s plan. He says the higher tax on health insurance premiums probably won’t be passed along to consumers.

(Illuzzi) “While the insurers are paying the three percent premium tax, the claims to be paid by those same insurers should go down by a like amount. In other words, there are no added costs to pass on.”

(Kinzel) The other senator from Essex Orleans, Democrat Bobby Starr, disputed Illuzzi’s analysis.

(Starr) “They claim it’s going to be a wash and it’s going to be free. There’s no free lunch in health care. It’s high time that the free riders belly up to the table and put their money in the kitty.”

(Kinzel) After rejecting the governor’s plan, the Senate then gave its strong final approval to the Democrats’ proposal.

The bill places a three percent payroll tax on companies that don’t offer health insurance to their employees. These workers would also have to pay the new tax. The Senate plan exempts the first twenty-five-thousand dollars of payroll to deal with concerns from small businesses.

The money would be used to provide primary and preventative care in 2006 and hospitalization benefits in 2009. Finance chairperson, Ann Cummings, said using the payroll tax is a matter of fairness.

(Cummings) “And the reason for that is our principal that everyone – because everyone has access to health care if they need it in this state – that everyone has to contribute their share into that fund.”

(Kinzel) Following the vote, the governor said the Democrat’s plan is unacceptable.

(Douglas) “I’m very disappointed and discouraged about the impact it would have on the economy of our state a payroll tax would be a terrible idea for employers creating jobs and for the working Vermonters who need them.”

(Kinzel) Because the Senate bill is very different from the one passed by the House last month, a conference committee comprised of three members from each chamber, will meet in the coming weeks in an effort to draft a compromise bill.

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

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