Friday, May 20, 2005

Another Vermont Healthcare Experiment

In the days of Governor Dean, Vermont famously implemented the Dr. Dynasoar program, achieving nearly universal health coverage for children. Now, Moderate Republican Gov Jim Douglas has made a proposal to provide universal access to care for adults with chronic medical conditions. The Democrat controlled VT Senate recently passed a health care bill however that the governor has strongly opposed. There are two key differences between their visions.

1. The governor's plan does not cover the 14,000 out of 35,000 Vermonters without insurance, who have been estimated to be able to afford insurance but have chosen not to buy it.

2. Here's main the sticking point: The Senate (Democrat) plan is funded by a tax on payroll of companies not providing health insurance to their employees. The Governor's plan raises the existing 2% tax on health premiums to 3%, and allows taxation of premiums to VT Blue Cross/Blue Shield.

While the Democrats' plan seems like a progressive tax on the face, consider that the Governor's plan amounts to taxation of companies and individuals who are able to afford buying health insurance. The Democrats' plan on the other hand adds up to taxing poor individuals to provide the same people with healthcare. Another way of saying this is that the Governor's plan brings insured and uninsured people into the same risk pool, and avoids disturbing the existing health insurance market since those individuals have been unable to purchase insurance up to now.

If the Governor's plan is passed, Vermont would have a new type of healthcare system with an appropriate emphasis on chronic diseases and much improved access to care. It would be harder to pilot this type of program in a bigger state, but if it works here it could become a national model. I hope the Senate Democrats don't let their wealth-redistribution impulses get in the way of passing a healthcare plan this session.

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