Vermont's Badly Managed Care
GRATZER, DAVID
Vermont's Badly Managed Care Dean's health care record as governor is nothing to brag about. BY DAVID GRATZER HOWARD DEAN'S campaign wants you to know that he used to be a practicing physician....
...Over the Dean years, Vermont fell from second to tenth in share of population with total health coverage...
...He received the call, but finished examining his patient before driving off to be sworn in as governor...
...As a look at his 11-year gubernatorial record shows, the doctor administered some pretty bad medicine to the people of Vermont...
...Faced with massive rate hikes, small employers drop coverage for younger workers...
...Indeed, such a bill would reflect the principle of the Constitution's Commerce Clause...
...And it would also be consistent with free market principles since interstate restrictions leave many Americans at the mercy of a small number of local health insurance carriers— which for Dean's former constituents can be counted on one hand...
...stories about Dean's commitment to medicine reach mythical proportions...
...He promises to do in washington what he did in Vermont: have government fill the role that private companies once did, another step along the road to single-payer health care...
...In particular, he grew Medicaid, the federal-state program for poor Americans, with Washington footing the majority of the new bill...
...He worked on it until he lost sight of the big picture...
...To pay for it all, Dean hiked taxes, including those on cigarettes and gasoline...
...New York insists on podiatric care...
...Community rating means that premiums are based on age, rather than health status...
...We predicted that premiums would go through the roof...
...Children's health is supposed to be Dean's signature issue...
...Vermont, though, isn't unique...
...cent have insurance...
...Instead of scrapping community rating, the legislation expanded it...
...Dean often addresses issues— mainly non-health care issues—by referring to his former occupation...
...The strategy collapsed so spectacularly that the resulting stalemate received a detailed report in the New York Times...
...It's a mixed picture...
...The federal McCarran-Ferguson Act of 1945 empowers states to regulate "the business of insurance...
...As a result, young, healthy people dropped their insurance, numerous insurance carriers left the state, and the percentage of uninsured Vermon-ters approached 14 percent...
...We fought that tooth and nail," recalls Tory Bunce of the Council for Affordable Health Insurance, an advocacy group for small businesses and insurance carriers...
...Add to this mix guaranteed issue and community rating, and it's clear why some small businesses and self-employed individuals find health insurance unaffordable...
...Washington should give him the option to buy the out-of-state plan...
...During one rally, he even brandished a stethoscope...
...If that sounds good, there are other seemingly impressive accomplishments: Nearly 90 percent of Vermonters have health coverage...
...worse yet, Republicans seem lost on the issue...
...In Vermont, jaw-joint disorders must be covered...
...Hospital fees are even stingier, with the state paying 50 cents on the dollar in some cases...
...Some physicians and dentists stopped taking Medicaid patients altogether...
...Republicans need to present voters with a less paternalistic vision...
...For hospitals and clinics now facing a shortfall, fees for non-Medicaid patients increased...
...They can start by empowering Americans to buy affordable health insurance...
...Ironically, Dean may end up benefiting from the health insurance debacle he helped create...
...Because most carriers have left the state, there are only a few insurance companies left in business...
...Give Americans the ability to buy health insurance from other states...
...The percentage of insured citizens is relatively high, but so are Medicaid rolls...
...Vermont isn't the only state to achieve such results with guaranteed issue and community rating...
...People can buy insurance after they get sick—and yet they still pay the rates of other people their age...
...And Dean managed to create this health nirvana while balancing the state budget...
...Consider: state legislators have passed more than 1,500 mandates that direct health insurance companies to cover specific diseases or procedures...
...The Dean years saw a sustained effort to increase public insurance coverage while hampering the spread of private insurance...
...The White House should champion a competitive market for health insurance, allowing citizens more choice and lower premiums...
...What does Vermont health care look like today...
...His campaign cites statistics on children's health coverage in Vermont: Ninety-six perDavid Gratzer, a Toronto-based physician, is a senior fellow at the Manhattan Institute...
...Various ideas were floated in the mid-1990s to cope with the collapsing market for private health insurance...
...As a doctor, I know that failure to act on the environment has devastating consequences," he recently told a crowd...
...Every governor has his obsession," notes John McClaughry, a former state senator who runs the free-market Ethan Allen Institute...
...A downward spiral for private insurers follows...
...Guaranteed issue requires insurance companies to sell policies to all applicants...
...In a daring display of political calculation, Dean urged them to vote for such a proposal—which he also promised to veto...
...With an insurance pool of older and sicker workers, those left face high premiums...
...His office even approached the Clinton administration about expanding Medic-aid further, but the request was denied...
...Thus, a 20-year-old worker in perfect health would pay the same premium as a 60-year-old man with heart disease and emphysema...
...He wasn't kidding: To cover his wife and himself, he pays $5,000 a year for a plan with a $1,000 deductible...
...It's a bold claim...
...And insurance premiums are sky high...
...As Governor, I know it can be solved...
...Consider that a typical Burlington psychiatrist makes $125 an hour from private insurance...
...Dean's alternative was simply to expand government programs...
...They did...
...He expanded eligibility, going so far as to allow children in families with incomes up to $51,000 to be enrolled...
...As much as Dean's supporters suggest his zeal for health reform distinguishes his record, regulating health insurance has become a hobby for activist politicians around the country...
...How to beat the former governor at his own game...
...At public events, his supporters wave signs proclaiming "The Doctor Is In...
...Some Vermont legislators proposed a single-payer plan...
...This would help stave off the disastrous scenario predicted by Service Employees International Union president Andy Stern when he said: "After November 2, there will be a doctor in the house—the White House...
...Today, Vermont ranks ahead of almost every other state in Medicaid enrollment...
...The message is unmistakable: Even from day one as governor, he put patients first...
...Howard Dean, M.D...
...From a distance, then, Dean's health care record seems marked by inactivity—after all, the percentage of people covered hardly changed...
...I'm paying a lot and getting little choice," a self-employed Burlington resident told me...
...But this obscures dramatic changes under Governor Dean in who provides coverage to Vermonters...
...While these mandates may appear innocuous in and of themselves, when combined, they create perverse incentives for people to game the system...
...such minute differences could easily be statistical noise, but if Dean claims to be the man who did something about the uninsured in Vermont, it seems there wasn't much of a problem to begin with...
...First, Dean meddled in the private insurance market...
...However, Medicaid's reimbursement to doctors, hospitals, and dentists is low...
...Again, the aim is to improve access for those who aren't healthy...
...in Vermont, Medicaid assists the poor and the working poor...
...One of Dean's first initiatives as governor was to champion Bill 160, sweeping legislation meant to address the health care problems he inherited...
...He also shifted costs...
...According to the Census Bureau, 9.5 percent of Vermont's population lacked insurance when Dean assumed office in 1991...
...The legislation aimed to establish state control over hospital budgets, create a statewide insurance pool, and form a new health authority to coordinate it all...
...Put in perspective, though, the picture seems less awesome...
...In New Jersey, according to the Coalition Against Guaranteed Issue, it now costs more to buy a family health insurance than it does to lease a Ferrari...
...Premiums wouldn't be based on age at all, but would be one-size-fits-all...
...In 1992, Dean said: "There is no such thing as an informed consumer of health care...
...Much of the legislation was eventually dumped, but not community rating...
...This could be accomplished very simply...
...By the end of Dean's term, the Medicaid rolls had doubled to roughly 20 percent of Vermont's population...
...But instead of undoing the price regulation that had been slapped on the insurance industry, Bill 160 went further...
...neighboring New Hampshire is last...
...As a physician, I've seen the suffering caused by this nation's health care crisis," his website explains...
...In Vermont, people talk about the afternoon Dean's predecessor died...
...If homeowners' insurance were regulated the way Dean regulated health care, residents could insure their houses after they caught fire...
...Campaign literature refers to him as "Gov...
...It's not clear that Vermonters can sustain the state government's spending...
...The Burlington man spending $5,000 a year on insurance would, in Connecticut, pay less than half that...
...Before his swearing in, Vermont's legislature passed a bill mandating "community rating" and "guaranteed issue" for health insurance...
...And no wonder...
...Projections suggest that in Vermont Medicaid will run a $98 million deficit by 2008...
...If people in Vermont or New York can buy a mortgage from a less regulated state, why can't they buy an insurance plan in another jurisdiction...
...with premiums sky high across the country and many Americans fretting the possibility of losing their insurance, Dean's promise of expanded government programs offers a tempting panacea...
...Medicaid pays about 75 percent of that...
...But nothing stops Congress from passing legislation allowing the interstate sale of health insurance...
...Dean, then serving in the part-time job of lieutenant governor, was seeing patients in his medical office...
...Health care was his...
...Too bad it doesn't hold up on examination...
...It aims to reduce premiums for the chronically ill...
...About 9.7 percent lacked coverage at the end of his term (average of 1999-2001...
Vol. 9 • January 2004 • No. 17
