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Testimony to House Health Care re: Single-Payer Bill

VBSR testimony to House Health Care Committee
Daniel Barlow, Public Policy Manager
Feb. 10, 2011

VBSR strongly supports Gov. Shumlin’ health care reform bill unveiled this week. We have some concerns about the funding mechanism of the single-payer system and the make-up of the board overseeing the whole system and I’ll discuss those issues with the committee a bit later.

Our organization represents nearly 1,300 business across Vermont and health care reform has been a top priority for us since our founding 20 years ago. Each year we survey our members and the constant message we hear is that the cost of health insurance is one of the most unpredictable and uncontrollable overheads in doing business.

Lots of VBSR members offer health insurance to their employees and lots of them offer the best benefits packages they can afford. But the system is breaking and it’s threatening to sink Vermont’s business community along with it.

34 percent of VBSR businesses spend more than 10 percent of their payroll on employee health insurance. And another 11 percent pay more than 20 percent.

Employer-based health insurance is going away. It doesn’t work for businesses and it doesn’t work for workers.

Double-digit cost increases almost annually has hampered Vermont businesses’ ability to expand and grow, train and hire new workers and increase the wages of the employees they have now.

When your health insurance can consume between 10 and 20 percent of your payroll – and even a few of our members are paying more than that too – there is no money left over to give a raise to your workers. And often business owners have to make the tough choice between reducing benefits and asking their employees to pitch in for their insurance.

Health Insurance Exchanges
The bill presented to you this week is not perfect and we worry that it provides little immediate relief to the escalating health care costs facing our businesses. But this bill is a thoughtful and creative roadmap to transition us away from this wasteful and inefficient system to one that works for all Vermonters.

It makes sense to take advantage of the available federal funds that will come down in 2014 through the health insurance exchanges. Utilizing that system to begin creating the single pool of consumers will save Vermont money and prepare us for the next step: Creating a universal health care system that doesn’t exclude anyone and contains costs.

When the health insurance exchanges are up and running in 2014 all businesses will be provided with the opportunity to shop through the exchange for health care. We believe that all businesses, regardless of whether they belong to a business association should have the same opportunity.

As I said earlier, VBSR is very supportive of the goals of the Health Care committees and the Shumlin administration to reform Vermont’s health care system. But we do have some concerns about Dr. Hsiao’s recommendations.

First, his proposals place a lot of power with a single board to oversee Vermont’s new health care system. The Legislature needs to ensure that the make-up of the board represents all Vermonters. We also need to ensure that the processes before this board are open and transparent. When Vermonters have a difficult time understanding why health insurance costs are increasing or don’t have an adequate voice in the process, they lose faith in the system.

VBSR is also concerned about the funding mechanism identified by Dr. Hsiao. While we are not opposed to using a payroll tax to fund part of the new health care system, we worry that this continues the trend of placing the burden of care on businesses and workers. Under this system, there would be many Vermonters with the means to contribute, who will be enjoying the benefits of the system, but will not financially support it.

Thank you for the opportunity to speak with you today.

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