Douglas wants market solution

Vermont Business Magazine, Jun 01, 2002 by Marcel, Joyce

The system needs "a variety of solutions," according to James Douglas, state Treasurer and Republican candidate for governor. "Not one single strategy will solve the problem. We need to. attack it from several different angles."

First, government must pay its fair share, Douglas said.

"The state doesn't pay the full cost for treating Medicare and Medicaid patients," Douglas said. "The most recent estimate we have, for 2000, was that there was $54.6 million in underpayment. That means private payers, businesses, and individuals who buy health insurance have to pay for that through higher premiums. So it's important to pay hospitals, doctors and dentists for the cost of the care we ask them to provide." Next, the government needs to bring Medicaid costs under control, Douglas said.

"Controlling Medicaid costs is a key goal of mine," Douglas said. "We don't pay the full cost of Medicaid because the costs are out of control. We have to look at the range of services provide through the system. We offer some things that are not covered in other states. The House budget took a good step in that direction recommended by the governor - of increasing the premiums that folks above the poverty line pay, increasing the co-payments for doctors and hospitals, and targeting the greater benefit to the greater need. So those below the poverty line would pay little or no cost, and those up to 225 percent of poverty - the cap on Medicaid programs - would pay more."

Douglas said he agreed with Dean that the state should not remove any children from the Medicaid or Dr Dynosaur programs.

"But we have to look at the range of services covered and took at, the ways to require participants to share in the costs," Douglas said. "The Joint Fiscal Committee estimates a shortfall in Medicaid of hundreds of millions of dollars. We're on an unsustainable spending track."

Taking another look at community rating would be a part of his program, Douglas said. In community rating, insurance companies are not allowed to "Cherry pick" and insure only the healthiest populations at the lowest cost, while denying coverage or making it expensive to others.

"I think we need more flexibility in the marketplace, so the price of insurance can better reflect the cost of insuring different populations," Douglas said. "The Hogan commission said this is a contributing factor. We've lost a number of companies in the recent past. There are very few carriers in Vermont, and that limits the competition in the marketplace, which is important to moderate cost. That needs to be looked at."

Recent health insurance mandates by the Legislature add cost and should be reexamined, Douglas said.

"It's estimated that mandates passed by the Legislature in 1998 alone added approximately $500 in insurance costs for each family in a year," Douglas said. "I don't remember where I read that, but I remember the number, because it stood out when I saw it. But whenever the state requires a particular service to be provided, it increases the cost. We need to decide whether the service is worth the cost."

A focus on disease prevention and on promoting healthier lifestyles would also lower costs, Douglas said.

"Look at the increasing obesity of the American people," Douglas said. "We have been attacking smoking in Vermont and need to continue to do that. We need to increase awareness of seat belt use. Seat belt usage has declined from 71 percent 67 percent in recent past. It may sound corny, but if every Vermonter would buckle up, stop smoking and get some exercise, we would reduce costs. Employers should examine their benefit plans to ensure they're encouraging healthy lifestyles and assisting their employees in achieving them."

Douglas does not support a single-payer system.

"I think the marketplace works, and Vermonters should have an opportunity to choose among different insurance products that fit their needs," Douglas said. "Competition has the effect of dampening prices, and we need that in our state.