Last month, the Green Mountain Care Board voted to allow Blue Cross to increase its rates for policies sold on Vermont Health Connect by almost 6 percent. A year ago, the rates went up by almost 8 percent.
Dr. Allan Ramsay, a key member of the state's Green Mountain Care Board, says Vermont is facing a health care affordability crisis that could restrict access to primary care in some parts of the state.
He says it's critical for lawmakers to address the so called "Medicaid cost shift" if it wants to deal with the affordability issue.
Ramsay voted against the rate increase because he thinks it's unfair to ask Vermonters to pay high premiums without addressing the large "out of pocket" cost caps that are included in many of the policies.
"Whether it's (an) increase in payment to Medicare Part B that we're hearing about, whether it's the premiums that we have to review and adjust whenever we can, whether it's the out of pocket costs, the real crisis is the cost trends of the delivery of health care in Vermont,” Ramsay explains. “That has to moderate."
Ramsay says Vermont needs to develop a payment reform system that has roughly the same rates for all of the various payers including Medicaid, Medicare and the private insurance companies.
Currently, Medicaid reimburses providers at a rate that is much lower than cost of providing the service, so private premiums pick up the additional cost.
It's projected that this Medicaid cost shift accounts for roughly 15 percent of the cost of a private premium.
“(We need to) somehow balance it out,” Ramsay says. “So that you can start to look at bending that cost curve, so that commercial insurers don't have to offset the decrease in payment that we all get from Medicare and Medicaid."
Ramsay says lawmakers need to boost Medicaid rates to reduce the cost shift, which will cost tens of millions of dollars. He argues that if the Legislature fails to act on this issue, then people with private premiums will continue to pay these additional expenses.
The Affordable Care Act boosted Medicaid payment rates for a two year period, Ramsay noted.
While more than a dozen states have voted to keep these higher rates in place using state resources, Vermont has not taken this step.
