Legislature To Conduct Independent Analysis of Health Care Costs

Jul 2, 2014

As Vermont heads down the path toward a single-payer health care system, lawmakers want to make sure the options are affordable for taxpayers and consumers. And the economic analysis about to be launched by the Legislature may duplicate similar work being performed for the Shumlin Administration.

Gov. Peter Shumlin wants to institute the nation’s first state-based single-payer health care system. But before policy makers can move to a public financed program, they need to understand how Vermonters pay for health care under the current regime. And the executive and legislative branches have embarked on independent quests to find answers to same questions.

"Before entertaining any transition to a new health care system, we need to have a full understanding of who pays today, and how well the system is working today." Lincoln Rep. Mike Fisher, chairman of the House Health Care Committee

“Before entertaining any transition to a new health care system, we need to have a full understanding of who pays today, and how well the system is working today,” says Lincoln Rep. Mike Fisher, the Democratic chairman of the House Committee on Health Care. Fisher is among a group of lawmakers interviewing the vendors who might be hired to perform the analysis on lawmaker’s behalf.

The work that will be done by consultants for the Legislature will in some ways be nearly identical to the analysis being performed by consultants for the Shumlin Administration. They’ll try to determine not just how much individuals and businesses pay in the form of insurance premiums, but also the impact of health care related costs on other household expenses, such as property tax bills.

“The Legislature and the administration may well ask the same questions of different contractors, and I think that it's important that the Legislature have an independent review of the questions,” Fisher says.

Chittenden Sen. Tim Ashe, chairman of the Senate Committee on Finance, says getting reliable answers to questions about cost will be vital when it comes time to make the case to Vermonters for whatever reform plans the Legislature opts to proceed with.

“So that if you contemplate any public financing scheme, that you know how it compares to the way things stand today. So that way, the average family can say, ‘oh, this is either going to save me money or cost me money.’ And the same would be true of businesses,” Ashe says.

The contractor hired by the administration will also be responsible for determining how various single-payer financing proposals would affect individuals, businesses and the economy at large. The Legislature isn’t looking for outside help with financing questions yet.

But lawmakers have appropriated $800,000 over the next two years for consultant services related to health care reform. And the head of the Legislature’s Joint Fiscal Office says a portion of that money will be used to perform an independent economic analysis of whatever financing plans the administration proposes.

“We’re a separate branch of government, and we both need to be using our resources to come up with the best confidence possible,” Ashe says.

The Joint Fiscal Office is selecting between four institutions – including the Massachusetts Institute of Technology and the Rand Corporation – that submitted bids to perform the work.