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Testimony to Joint Health Committee- March 23, 2010

Thank you for holding this hearing and for providing VBSR the opportunity to testify. VBSR is a statewide business association with over 1200 members--- large and small from a variety of business types.  We understand that you are most interested in hearing directly from business owners tonight, but there are many of our members who could not make it here and would appreciate having their perspective heard. I speak to you on behalf of those members and directly from the 160 members who completed health care reform questions on our member policy survey last summer.
For over sixteen years, Vermont Businesses for Social Responsibility has advocated for a health care system that provides universal access to an integrated system of care, which is decoupled from employment and publicly financed.  Working towards implementation of this policy has never been more timely or vital for Vermont businesses and citizens.

The rising cost of health insurance premiums is one of the most uncontrollable elements of business overhead and is forcing Vermont companies and their employees to make difficult choices. We believe that the current employer-sponsored health insurance system is on the verge of collapse and action is essential.
What our businesses are experiencing
Premiums continue to rise, and employers continue to be faced with choosing between their company's economic viability and the health care needs of their workforce.  Findings and conclusions from our 2009 member survey:

  • Costs are skyrocketing for employers who provide employer-sponsored insurance.

Nearly one-half of VBSR members spend up to 10% the equivalent of their payroll on health insurance, and nearly one-half pay more than 10% the equivalent of payroll. 20% of the members pay more than 20% the equivalent of payroll on health insurance. This “system” is not sustainable.

  • VBSR member businesses have responded to rising premium costs by cutting benefits and shifting more of the financial burden to employees.

In the past five years, 29% of members have introduced or increased employee contributions, and 27% have changed from an indemnity plan to a health savings account. 18% have reduced health care benefits.

The health insurance system can no longer depend on the private sector market as its backbone.

  • VBSR member businesses want to see decoupling of health care from employment and public financing of health care.

90% of survey respondents believe that health care should be publicly financed.

Action is Needed
Vermont has a history of using its independent and self-reliant nature to take bold initiatives. By collaboratively designing and instituting a true system of universal health care, Vermont could take a leadership role in business attraction, retention, and success. The benefits associated with doing so are significant. They include a more stable and productive workforce; greater incentive to create, move, or expand a business in Vermont; improved efficiency and reduced costs throughout the public and private sectors; and a healthier population of Vermonters.
VBSR supports legislative action that will bring about a health care system for Vermont that includes:

  • Universal coverage and access.
  • Cost management to a) provide accountability and sustainability b) eliminate administrative redundancy c) decrease unnecessary utilization, and d) reduce prescription drug costs wherever possible.
  • An integrated system of care.
  • Promotion of healthy behaviors and prevention.
  • An equitable funding mechanism that takes into account the contributions already made by business.

We support H. 510 and S.88 as amended (with some changes) as steps in the right direction. The time has come to gather the strengths of our citizens, the dedication of the business community, and the political will of our elected leaders to move this policy forward. Economic development in our state is very closely tied to the solution of this worsening problem.

 

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