In a post-mandate world, or if the Wyden-Brown waiver acceleration bill passes, state experimentation moves once again to the fore. All the more reason to take a look at what’s happening in Vermont.
The Hsaio report and related materials have been out for several weeks now. Most attention is on Option 3, the single payor plan. Some observations:
- Option 3 isn’t a true single payor since Vermont can’t unilaterally make benefit changes in Medicare, Medigap, Medicaid, VA, FEHBP, CHAMPUS or ERISA. Not a criticism, just an observation. Vermont intends to ask for waivers under Medicare, Medicaid and ACA.
- The ERISA issues are thoughtfully discussed in the report – Vermont won’t be able to force self-insured ERISA plans to adopt Option 3 benefits, but they may be able to encourage them to move their ASO/TPA claims processing into the single payer on a voluntary basis. ERISA shouldn’t bar universal adoption of the provider payment models.
- For everyone else, Option 3 decouples employment from health insurance benefits and delivery of care. But much of the finance still runs through the employment relationship.
- BCBS-Vermont becomes the single payer agent. They already have a very large market share in Vermont (75% by some measures). The company supports Option 3. One reason single payer is plausible in Vermont is the strong support from both providers and BCBS-VT.
- Cost savings are attributed to: (a) lower administrative costs (this makes sense and is a significant amount); (b) reduced fraud and abuse (an old chestnut, but single payer should make it easier to spot); (c) changing payment models (P4P, more global payments, etc.); and (d) med mal (but savings from defensive medicine won’t happen unless physicians actually change their practice patterns). I rate Option 3 as more likely than ACA to bend the cost curve in the next 10 years.
Projected start date: January 1, 2015.
UPDATE: The VT Governor unveiled his single payor bill yesterday.