Scott Says It's Time To Abandon Vermont Health Connect

Sep 7, 2016

Republican candidate for governor Phil Scott says it’s time to take the state in a new direction when it comes to health care reform, but his precise destination remains somewhat unclear. And while the sitting lieutenant governor wants to abandon Vermont Health Connect, he says he isn’t sure yet what to use in its place.

Health care is one of the many hot topics in this year’s race for governor, and Scott outlined his plan for health care reform in downtown Burlington Wednesday. Scott kicked off his press conference with the same message he brings to just about every political event.

“The resounding message from the campaign trail is that Vermont is unaffordable,” Scott said.

And Scott says a $5 billion-a-year health care system that now accounts for 20 percent of the Vermont economy is a big part of the affordability problem.

Scott’s proposal includes of a number of initiatives he says will bring down costs to individuals and businesses. He says he’d start by shelving the $200 million state-based health insurance marketplace, called Vermont Health Connect.

“What we have right now is fully dysfunctional. It’s not working, so we need to transition to something else,” Scott says.

What exactly that something else is still remains unclear under Scott’s plan. He says he’d abandon Vermont Health Connect in favor of either the federal exchange, or some kind of multi-state exchange network.

"What we have right now is fully dysfunctional. It's not working, so we need to transition to something else." — Lt. Gov. Phil Scott

He says he isn’t ready to decide which. A $300,000 independent assessment of Vermont Health Connect commissioned by the Legislature earlier this year might offer some answers, according to Scott. That report is due in December.

“None of us has the answers individually,” Scott says. “But I think collectively, we can come up with answers that work for Vermont.”

Scott says he’d also look to open up the state’s insurance market, and allow individuals and businesses to purchase plans sold outside Vermont. And he says he thinks the state could save up to $60 million a year simply by eradicating unnecessary administrative costs in the Medicaid system.

Betsy Bishop, executive director of the Vermont Chamber of Commerce, says Scott’s plan offers the kind of fresh approach that small businesses have been pining for.

“Some of the thinking in this plan today is fresh and bold thinking about looking at regional partnerships here we can bring down the administrative costs of Vermont Health Connect and hopefully pass those on to the consumer,” Bishop says.

Peter Sterling, a long-time health care advocate who has worked to shift to a publicly financed health care system in Vermont, takes a dimmer view of Scott’s plan.

Sterling is currently leading a push, funded by the Vermont-NEA, to provide publicly financed health care to all Vermonters age 26 and younger. Sterling he says there are no credible specifics in Scott’s proposal when it comes to how he’d achieve administrative savings, and he says he doesn’t think those savings are there to be had.

“And I think that’s just code for trying to find savings by cutting benefits, by limiting access to people who are lower income who truly need affordable health care,” Sterling says.

"I think that's just code for trying to find savings by cutting benefits, by limiting access to people who are lower income who truly need affordable health care." — Peter Sterling, long-time health care advocate

Scott says he has no immediate plans to cut benefits, or increase the eligibility thresholds needed to qualify for Medicaid. If attempts to cull administrative savings from Medicaid don’t materialize as he hopes, then Scott says he’ begin to look at dialing back on services.

“Well I think everything’s on the table, but I’m not seeking to do that at this point in time,” Scott says.

A study conducted by the Shumlin administration last year found that transitioning to the federal health insurance exchange would end up costing the state more than it’s spending on Vermont Health Connect. Shumlin spokeswoman Sue Allen said in a statement Wednesday that abandoning Vermont Health Connect would be “fiscally irresponsible” and administration officials say technological bugs in the exchange system are nearly resolved.

Republicans have questioned the legitimacy of the administration’s assessment of transition costs to the federal exchange. As for the administration’s assurances that technological problems on the exchange are nearly fixed, Scott says he’s not convinced.

“We’ve been hearing that for three years now,” Scott says. “We’ve been hearing that we’re right on the verge of making this work.”

Allen says there are other pitfalls associated with abandoning Vermont Health Connect, including the loss of state-level subsidies now going to 19,000 Vermonters with qualifying incomes. The Shumlin administration says it’s impossible to allocate those subsidies through the federal exchange.

Scott says his preference is to keep those subsidies in place, and he says he thinks the state can come up with a way to deliver them through some bureaucratic framework other than Vermont Health Connect.

“If we can keep the subsidies and keep Vermonters with health insurance because of the subsidies, we should continue down that road,” Scott says.

As for administrative savings in Medicaid, Allen says Scott has wildly overestimated the pool of available money.

Credit Peter Hirschfeld / VPR/file

Scott says that administrative costs in the Medicaid system have ballooned from $57 million in 2011 to $189 million last year. Allen says “he does not have the facts straight,” and that the state share of all administrative Medicaid costs is $55 million.

Allen also criticized Scott’s plan to allow the purchase of health insurance plans across state lines, a move she says would “create a race to the bottom where Vermont’s consumer protection laws would not apply.”

Democratic candidate for governor Sue Minter wasn’t immediately available for comment Wednesday, but her campaign issued a statement saying Scott has “failed to put forward any meaningful or viable plan to assure that Vermonters will have access to quality and affordable health care.”

Minter has said she favors trying to make Vermont Health Connect work. She’s also said she’d like to seriously explore the possibility of giving publicly financed health care to every Vermonter age 26 and younger.

Scott says he’s opposed to using any expansion of public financing in the health care system.

Scott says there are elements of Gov. Peter Shumlin’s health care legacy that he’d seek to carry on. The five-person Green Mountain Care Board, created in 2011 to regulate nearly all aspects of the health care system, has, according to Scott, “done a lot of good work.”

“I am hopeful we can continue with some of that good work,” Scott says.

Scott’s plan also echoes Shumlin on payment reform. Shumlin has sought to move to a system where providers are compensated for making patients healthy, instead of for the sheer volume of services and procedures they perform. Scott says he favors the same approach.

And while Scott says he has some questions and concerns about the so-called “all-payer model” the administration is currently pursuing, he says he’s open to adopting that approach if he’s elected governor.

“If it lowers costs for Vermonters, obviously I’d be interested,” Scott says. “I think what it means to me is a more global look at how we attack health care costs and it has some glimmers of hope.”