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Vermont businesses, doctors call for health care cost shift fix

For Immediate Release

February 26, 2015

Media Contact:
Daniel Barlow, VBSR Public Policy Manager, (802) 355-7461, danielb@vbsr.org

Vermont businesses, doctors call for health care cost shift fix

Low reimbursement rates increase business costs and create barriers to health care, say Vermont business leaders and medical professionals

Montpelier, Vt. – Vermont business leaders joined doctors, medical professionals, and health care advocates Thursday in calling on the Legislature to further health care reform efforts by fixing the Medicaid cost shift this year.

The underfunding of government health care programs leads to increased costs for businesses paying for employee health insurance and creates barriers to care between doctors and patients, the group said at a press conference Thursday afternoon at the Vermont Statehouse.

“The cost shift is a hidden and inequitable tax that is embedded in our health care premiums,” said Jennifer Chiodo, the managing principal at Cx Associates in Burlington and a member of VBSR’s Board. “This tax should be more transparent and the payroll tax accomplishes that by spreading the costs out to all businesses, not just those who provide insurance. These funds will leverage federal money otherwise unavailable to Vermont.  To me, it makes sense to bring $110 million of our federal tax dollars home to Vermont.”

Dr. Joseph Haddock, a family practitioner in Williston, said the low reimbursement rates puts the future of Vermont’s independent primary care physicians in jeopardy and is a barrier to care for Vermonters. “Many offices already take no new Medicaid patients, and a few take none at all,” he said. “This definitely decreases health care access for Medicaid patients for both primary and specialty care, resulting in more ER visits and less preventive care.  Without some prompt change in Medicaid reimbursement, this will get much worse.”

“Smart businesses are willing to make smart investments,” said David Blittersdorf, the president and CEO of AllEarth Renewables. “If state funds can leverage additional federal funds, reduce the cost shift, and ultimately bring down the rate at which premiums increase, that makes good business sense. With a payroll tax all businesses ‘pay-in’ which is a step in the right direction compared to the ‘voluntary’ health insurance benefit many business offer.”

Leslie Nulty, the owner of Focal Point Advisory Services in Burlington, said the appeal of using a payroll tax to close the Medicaid funding gap is that it assures a financial contribution to our health care system from businesses not paying anything now. “Those companies are ‘free riding’ by shifting the burden of providing decent health care over to the rest of us,” she said. “Vermonters have never been sympathetic to those who refuse to pay their share of the common burden. The payroll tax is one way to get the ‘free riders’ to shoulder their responsibilities - especially the large companies who can easily afford to pay their share.”

“The cost shift is real and it costs everyone who purchases health insurance, whether they purchase it as individuals or as businesses on behalf of their employees,” said Rep. Avram Patt, the owner of Down Patt Consulting in Worcestor and a member of the House Health Care Committee. “After two months of hearing testimony, I can say for sure that anyone who buys health insurance is paying for this cost shift. We can debate whether or not a payroll tax is the best way to address this, but we should not be debating whether or not revenue needs to be raised to address this.”

“There are no free lunches when it comes to solving our most difficult health care challenges,” said Paul Burns, executive director of the Vermont Public Interest Research Group. “But a small payroll tax that brings in tens of millions of federal dollars and keeps rising insurance costs in check amounts to a heck of a blue-plate special.”

Read VBSR’s policy statement on fixing the cost shift: http://vbsr.org/public_policy/position_papers/health_care_cost_shift/


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Founded in 1990, VBSR is a statewide, non-profit business association with a mission to advance business ethics that value multiple bottom lines: economic, social, and environmental. Through education, public influence, and workplace quality, VBSR strives to help 760+ members set a high standard for protecting the natural, human, and economic environments of the state's residents, while remaining profitable. Learn more or join the cause at http://www.vbsr.org

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