(Host) A major fight is brewing over a decision by the Douglas administration to seek changes to Vermont’s community rating health insurance law. Senate President Pro Tempore Peter Welch calls the proposal “the biggest mistake the governor has made,” and Welch says Senate Democrats will actively oppose the plan.
VPR’s Bob Kinzel reports.
(Kinzel) In the mid 1990s, at the urging of former governor Howard Dean, the Legislature adopted the community rating law. Under this system, health insurance companies were prohibited from charging higher premiums for people who had sizeable health care needs.
The law was a response to companies like Golden Rule who chose to insure only young healthy individuals and denied coverage to older sicker people. When the law was enacted, Golden Rule decided to leave the Vermont insurance market rather than adhere to the new rules.
The Douglas administration is set to announce a plan that would allow companies to increase or decrease premiums for small businesses by 20% based on the age, gender or risk behavior of the company’s employees. Douglas says the plan is a way to encourage more insurance companies to do business in the state – a move he says will help contain the rising cost of premiums:
(Douglas) “One of the most serious economic and fiscal problems we’re confronting in Vermont is the cost of health care. Health insurance premiums keep rising at double-digit rates, companies are leaving the state, many employers are declining to continue their coverage, in other cases people find themselves buying policies with astronomical deductibles. We have to get the cost of health care under control.”
(Kinzel) But Senator Welch says the plan will hurt many small businesses because it will allow insurance companies to raise rates for an entire company based on the circumstances of a single employee:
(Welch) “This is the biggest mistake that the Douglas administration has made. Backing away from community rating is bad for pregnant women, it’s bad for middle aged people, it’s bad frankly for small businesses. This is a dramatic departure from Vermont policy. I think it’s a grave mistake and we will fight this vigorously in the Senate.”
(Kinzel) And Welch is very disappointed that the Douglas administration wants to implement the new changes through the administrative rules process:
(Welch) “I’d be strongly critical of the administration if they use a back door approach of rule making to make such a radical change in health care policy here in the state of Vermont.”
(Kinzel) The administration is expected to include its community rating plan as part of a larger health care initiative in the next few weeks.
For Vermont Public Radio, I’m Bob Kinzel in Montpelier