Two New State Health Program Reforms: One Promising, the Other Problematic

Vermont Follows Massachusetts with Compromise Health Care Reform:

State Expects to Cover Half of Its Uninsured

After negotiating with lawmakers, Gov. James Douglas (R) signed two bills last month to extend health coverage to a significant portion of Vermont’s uninsured population. Some 30,000 uninsured residents will gain coverage through a new program called Catamount Health; public programs will cover another 30,000 uninsured. With the new law, the state expects that as many as 96 percent of its residents will gain health coverage in the next five years.

Under Catamount Health, private insurers will offer state-subsidized comprehensive benefit plans with sliding-scale premiums. Subsidies will come from federal funds, a new cigarette tax, and tobacco settlement money. Companies may begin selling the plans on October 1, 2007. If the private market fails to offer plans, lawmakers have an agreement to force companies to offer Catamount plans.

Like the new law in Massachusetts, the new Vermont law creates an employer assessment. Employers will have to pay $365 each year per full-time-equivalent employee. Unlike Massachusetts, Vermont will not require that residents take up coverage.

Vermont is just one of a number of states following Massachusetts’ groundbreaking health reforms to expand coverage to the uninsured as opposed to limiting coverage and benefits. 

West Virginia’s “Medicaid Redesign” Could Have a Negative Impact on Low-Income Children:

State Plan Amendment Rewards “Personal Responsibility”

The federal government recently approved West Virginia’s new state amendment plan under the Deficit Reduction Act. West Virginia’s new plan heads in a dangerous direction that threatens coverage for kids without much benefit to the state. The new plan imposes a “personal responsibility” requirement on 160,000 people and benefit reductions for failing to comply. Low-income children stand to be the most affected by this change.

Under the state amendment plan, beneficiaries will sign a “member agreement” stating that they will comply with a set of behavioral guidelines for healthy living. Three out of four beneficiaries will be children whose parents will be expected to sign the agreement on their behalf. The agreement states that a beneficiary will engage in healthy behaviors such as seeking preventive health care, following doctors’ orders, and keeping appointments. Signing this agreement places beneficiaries in the “enhanced” plan with a comprehensive set of benefits. When a beneficiary violates the member agreement, the beneficiary is placed in the “basic” plan, which offers less benefits and no mental health services or diabetes care. Most of the beneficiaries will be children who have little or no control over their health care regimen and could have their benefits reduced through no fault of their own.