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Testimony to Senate Health- April 9, 2008

Testimony to Senate Health Care Committee April 9, 2008.  Andrea Cohen, Vermont Businesses for Social Responsibility

When VBSR testified to this committee on February 7th we communicated our primary health care reform policy objectives
•    de-couple health insurance from employment, and
•    institute public financing of health care.  

We discussed how the costs of health care and how health care is financed are critical economic development issues and how the system can no longer rely on the employer sponsored insurance market as it’s backbone.

You may recall we shared the results of our business member survey (182 respondents):
•    More than 80% of our members who responded to the survey offer health insurance to their employees. Half of them pay 100% of premiums. Three-quarters pay at least 75 % of premiums.
•    The cost of their insurance is soaring.  Two-thirds pay $5,000 or more per employee, 22% pay more than $7,500, and 13% pay more than $10,000 per employee per year.  Since 2003, more than 40% have seen their health care premiums increase by more than 10% every single year.
•    More than a third have passed more costs on to employees over the past 5 years and more than 40% have switched to high deductible HSA accounts that force employees to choose between health care and savings.

This system is not sustainable and cannot continue to be relied upon. VBSR believes that the current health care insurance system needs major reform to be financially sustainable and so Vermonters and their families can have universal access to quality health care.
Another result of our survey is that more that 80% of survey respondents believe health care should be a publically financed service.

Regarding H. 887 as passed by the House:
Although significant progress on our policy objectives were not expected this session, as new legislation is considered
our position depends on whether it moves us, or distracts us, from our stated goals.

Provisions that we support (or would like added to) in the bill include:
•    SECTION 6- Financing Options Study. Although studies are often viewed as an alternative to action, we support this study for it will provide us with necessary information for needed financing reform.  We need an equitable and sustainable funding source for health care and the economic modeling work you previously legislated was not completed. We need to be able to make policy decisions based on valid and studied data. One change we would recommend is to run this study out of Joint Fiscal Office as we understand that is who ran the previous work.
•    Level the playing field between businesses.
As long as we continue in the current financing system we need to recognize that some businesses are at a competitive disadvantage because they provide quality health insurance. Note the difference between the Catamount Assessment of $1 a day, and what other employers are currently paying per employee.  Our suggestion is to require state purchasing preference to firms that have been providing high quality insurance to their employees.
We offer the following for inclusion into the bill:
By Jan 1, 2009 the Agency of Administration shall modify its current purchasing and contracting procedures so that state agencies, departments, and offices will give purchasing and contracting preference to companies that provide high quality health insurance benefit to their employees.

There are other provisions in the bill that we support because of potential cost savings to the system including:
•    Preventing chronic conditions through healthy lifestyles (Sec. 22-32)
•    Exploring merger of fragmented risk pools (Sec. 4)
•    Provisions that move towards streamlining and efficiency including (Accountable care organizations- Sec. 3, Universal standards-Sec. 5, E-Prescribing- Sec. 36).
We also would like to see more efforts made to reduce unnecessary duplication of medical facilities and services.  

Thank you for your thoughtful consideration of these comments.

Champion Members!

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