Two Vermont senators are trying to resurrect a plan to increase Medicaid reimbursement rates for health care providers. And they’d use tax increases on cigarettes and health insurance claims, as well as heightened penalties on employers that don’t provide health benefits, to pay for the plan.
House lawmakers have largely abandoned Gov. Peter Shumlin’s proposal to address what’s known as the Medicaid cost-shift. But Rutland Sen. Kevin Mullin, a Republican, and Addison Sen. Claire Ayer, a Democrat, have introduced a plan in the Senate that would raise $60 million a year for Medicaid.
Mullin says he doesn’t support the governor’s revenue plan, which calls for a new payroll tax on every employer in Vermont.
“And I could never live with a payroll tax,” Mullin says. “I don’t care if it’s seventh-tenths of a percent or one-tenth of a percent, I’ll never vote to go down that path … because it’s just opening the door.”
But Mullin and Ayer have put forward a plan that includes a $1 per-pack tax increases on cigarettes, and a 0.9 percent tax on health insurance claims. Mullin says the proposal might add some upfront costs to private insurance. But he says that if state regulators can use that money to increase Medicaid reimbursements, then people with private insurance should see a commensurate reduction in their health premiums.
"I could never live with a payroll tax. I don't care if it's seventh-tenths of a percent or one-tenth of a percent, I'll never vote to go down that path." - Sen. Kevin Mullin
“Even though it’s a nine-tenths of a percent of an assessment on the claims, if the bill they’re paying is less in the end then it should not be an increase,” Mullin says.
The plan also increases financial penalty assessed on businesses that don’t provide any health benefits at all. The employer assessment, as it’s known, currently raises about $18 million annually. Mullin and Ayer’s plan would collect an additional $10 million from those employers.
Mullin says the employer assessment is a good way to collect revenue from people who wouldn’t be affected by the claims tax.
“If we’re going not try to reduce the cost at the providers, everybody should have a piece in the game,” Mullin says.
Gov. Peter Shumlin says he still prefers using a 0.7-percent payroll tax to support his larger, $190 million proposal. But he says his overriding concern is making sure the state comes up with some way to address a Medicaid funding crisis that he says has spiked private insurance costs, and led some doctors to stop seeing patients with government-funded insurance plans.
"I want to see us address the issue. I'm willing to have conversations about the best way to get there.” - Gov. Peter Shumlin
“I want to see us address the issue,” Shumlin says. “I’m willing to have conversations about the best way to get there.”
The House Committee on Ways and Means finalized that chamber’s version of the health care reform bill on Friday morning. That plan raises about $10 million in state money by expanding the sales tax to include soda and candy.
The plan also includes a new meals tax on vending machine items, and a 23-cent per-pack increase in the cigarette tax.
The proposal would fund modest increase in Medicaid reimbursement rates, but only for primary care doctors. The House plan would also provide financial assistance to lower-income Vermonters struggling with the insurance co-pays and deductibles associated with plans sold on the exchange.
