By Wendy Wilton
It seems every town or region in Vermont is desperately trying to improve its economic circumstances because the economic message from the state has been weak for so long. These are generally “feel good” citizen initiatives that cannot realistically counter the demographic trends of the state. Those trends toward population loss and aging demographic for the state (outside Chittenden County) are partly a response to low wages, high property taxes and high health care costs, which have accelerated through flawed health care reform efforts.
Health care reform is especially important in this discussion as it is about 20 percent of our economy. Rapid expansion of Medicaid under Obamacare has made Vermont an outlier creating extremely high costs and rapid increases in those costs. To make matters worse, Vermont’s health care exchange is still not operating properly, maintenance costs are in the millions per year and the state owes Blue Cross Blue Shield about $10 million in exchange premiums, according to the company.
Both of these ‘reforms’ — Medicaid expansion and the exchange — have significantly increased health care premiums each year for everyone covered by insurance and increased taxes for everyone who owns property. The City of Rutland now spends about $2.5 million annually on health care premiums by the city and its employees. A 10 percent increase in premium costs the taxpayers an additional $200,000 or more in the budget. The increases in recent years are unsustainable. This year it was 11.8 percent.
The Vermont Legislature will return to the Statehouse in 2018 to consider yet another health care reform effort called all-payer waiver, agreed to by Gov. Peter Shumlin and continued by Gov. Phil Scott. The waiver was an agreement made with the Centers for Medicare and Medicaid Services, a federal agency.
This will involve staffing up a new bureaucracy to manage health care under the accountable care organization (ACO) called OneCare, created by UVM Medical Center and DMHC, thus creating a pseudo monopoly. The cost of creating this organization may be as high as $10 million. This will further add to the cost of health care in our state.
OneCare will determine how Medicare and Medicaid funds will be spent. ACOs are part of Obamacare to create a bureaucracy intended to control government-funded health care expenditures.
Many of our representatives are taking leading or supporting local economic efforts, which is laudable, yet some of those same leaders do not appear to understand or acknowledge the decisions by the majority in Montpelier are the source of the economic malaise they hope to cure. Continual “reforms” that continually result in higher health care costs have been detrimental to our economy. These policies affect every citizen, impact employer decisions, and increase tax rates.
Wendy Wilton is the Treasurer of Rutland City and serves on the EAI board of directors. Reprinted with permission from the Ethan Allen Institute Blog.