Vermont Legislature SmartTranscripts:

[Unidentified Committee Member]: Oh, silver.

[Francis McFaun (Vice Chair)]: Good afternoon everybody, this is the healthcare committee. It is Thursday, February 12, and we are going to have a special discussion with the healthcare advocate. Take it away, healthcare advocate.

[Mike Fisher (Health Care Advocate)]: Thank you, Mr. Vice Chair. Yes, if you haven't met me before, I am Mike Fisher, the healthcare advocate. So just an hour ago, the chair asked if I could come and spend a little time talking about silver loading. And and I, of course, because I'm a grunting, said, sure. Why not? I don't need any time to prepare. And so I think if this were to be done right, it would have I would have some slides, and we would walk carefully through it. But I think the committee had some time, and and I am happy to muddle through this with you to try and describe the dynamics that lead to silver loading the dynamics in which silver loading works. And so I was thinking I would just go way back to one zero one, Affordable Care Act one zero one, a few details first. Everybody knows that there's different metal levels, and that the metal levels describe on average how much is pay of your care is paid for by premiums and how much of your care is paid for by out of pocket costs. So for instance, a bronze plan, on average, through the whole population, not the Vermont population, the national population, we would expect that 60% of the care is paid for through your premiums every month, and 40% of the care is paid for through your co pays, deductibles, out of pocket max. Doesn't mean if you go to get care, 60% is gonna be sent to you as a co pay. This is on average through the whole population through all the care that the population needs. So that's one really basic piece building block. The next building blocks are the two different kinds of subsidies that are given in the Affordable Care Act. I'm sorry if this is really simple, but it just feels like it makes sense to say it again. There's two basic subsidies. One of them is the premium tax credit, sometimes referred to as APTC or sometimes referred to as PTC. It's an advanced fund, tax credit that comes to you either when you get your when you pay your premium, or you cannot get it and get it at tax time.

[Francis McFaun (Vice Chair)]: Can we ask questions? Yeah. Yeah. Please.

[Mike Fisher (Health Care Advocate)]: Just ask state or federal? Federal. All this federal. It's all federal. All federal. There's a Vermont piece of it, but I'm gonna ignore that. I'm trying to make this simple for a minute. Yep. The other major subsidy federal subsidy through the Affordable Care Act is the cost sharing reduction. And the cost sharing reduction for lower income people gives people a better benefit, a richer benefit, because they're recognized as being poor. Hope you don't want me to start over. So that so and and just to say that a little bit more detail about the the CSR program, it buys up that actuarial value. It says, even though you're buying silver, where because you're between Medicaid and a 150 of the federal poverty level, silver would otherwise be an 80% actuarial value. But because you're that four, we're gonna give you 94% actuarial value. So you're getting a much you're getting better than platinum. And so okay. That's the ground. Yes?

[Francis McFaun (Vice Chair)]: Thank you. The cost sharing CSR.

[Mike Fisher (Health Care Advocate)]: Cost sharing reduction, yes, That's

[Francis McFaun (Vice Chair)]: what I've set up for. For low income. So is that up to, what's the percentage for the federal poverty?

[Mike Fisher (Health Care Advocate)]: Yep, So the CSR bans go from Medicaid, a 138% of the federal poverty level. Okay. The first band goes between Medicaid and a 150%, and that is a 94 actuarial value. And then there's a band from from 200 to two fifty and from there's there's fifth sort of there's a number of bands all the way up to 300% of the federal poverty level. But I I I'm I'm trying let's not let's not get stuck in the details here for a while. Trying to stay sort of in the high level. So something happened in 2018. In 2018, the federal government said, the first Trump administration said we're not funding the CSR plan anymore. Addy just talked about this. We're not gonna fund it anymore. Insurance companies, you still have to give it, but we're not gonna pay for it anymore. And a group of us got together here in Vermont and nationally and recognized, hey. We have an opportunity to fund the CSR plan, the CSR costs, putting those costs on the silver level in the individual market. And so that action put applied the costs to people who got substantial federal tax credits and so shifted the cost. You know, the the feds ended up paying for it anyway. And that was just for the actual costs of the the CSR program. And the feds let us do it. It happened in 2018, 2019, and it was known as it's the first edition of what's known as the Silver Lode. Yeah. Leslie? Yeah. No. It's okay. Although that should be fairly straightforward, Here's where it gets more complicated. I think in 2022, we at the health care advocates office noticed that a few states, New Mexico in particular, was taking another step, fairly aggressive step. And I'll just recognize it was based on some work by a guy named Stan Dorn who was at Families, who was really promoting it nationally. And we listened to him, and it made a lot of sense. And the logic was for somebody who's in that high cost sharing reduction band, why are we rating them? Why are we calculating the cost of their insurance like it's a silver plan? It's not a silver plan. It's a better than browns plan. And so wouldn't surprise you to hear that the premium for a, you know, a a platinum plan is gonna be more expensive than the premium for a silver plan or a bronze plan because we recognize that higher percentage of the care is being paid for by the premium, not the the coinsurance, not the out of pocket. And so we said, for those people who are in those top two CSR bands, they shouldn't be rated as silver. They should be rated appropriate to the coverage that they that they get, Better than gold and better than

[Francis McFaun (Vice Chair)]: platinum. So silver actually costs less than the gold plan.

[Mike Fisher (Health Care Advocate)]: Silver in the in the regular world, the cost. I look. I should say this carefully. The cost of care is the same between silver and Yeah. And bronze, but silver's gonna have a lower premium and higher co coinsurance, co pays. So so we made this pitch that we should be rating the people in the high CSR levels appropriate to their actuarial value and apply that to our individual market, and then take the action of you know, both assume that everyone else will move out of the silver. And then as chair Black said earlier today, with the incredible work of and and I think Vermont did it. I think Vermont did a better job of this than any other state that's gone down this road of making sure that those higher cost silver plans did didn't harm anybody. It only went to we moved everybody out of the plan that the costs went up for. I probably didn't describe a key detail, but I should say

[Francis McFaun (Vice Chair)]: Can I give a personal example? Yeah. Right. So I'm looking at Vermont Health Connect's rate sheet. Right? By the way, one of my favorite things, although it's so tiny, I have to look. Myself So personally, one person on my plan lost all my subsidies starting on January 1. My gold plan that Mr. Fisher recommended a year ago, you need to go from your silver that I'd always been on to gold. So my gold plan this year is $11.44 dollars A month? A month. That's not what this discussion is about. However, if I was on silver, which you would think being a lower metal level, it would be less expensive because the benefits aren't necessarily as generous. Like the co pays are higher, out of pockets are higher. That plan is $12.88. So it's $141 more for a lower value plan than the one that I have. And that's silver.

[Mike Fisher (Health Care Advocate)]: Yeah. That's the effect of silver.

[Francis McFaun (Vice Chair)]: That is the effect of silver.

[Mike Fisher (Health Care Advocate)]: We we increase the cost of the plan, the silver plan, that people that people's income gets benchmarked again to against to determine their premium tax credits.

[Brian Cina (Member)]: Isn't there a trade off though, which is that for metals besides silver, there's no cost sharing reduction, but for a silver loaded plan, you have a higher premium, but you have much lower cost sharing?

[Mike Fisher (Health Care Advocate)]: So so you're right. I didn't cover this detail when I was talking about the different benefits. The cost sharing reduction is a benefit that's available to people in silver only. The premium tax credit, while it gets benchmarked against a particular silver plan, you get to go by any metal level you want with those dollars. Right.

[Brian Cina (Member)]: So then the so what ended up happening I'm not an expert on this. I'm doing this more to make sure I'm understanding it. This isn't me testifying, it's me trying to summarize it. You can be like, no, and tell me what it is. But it's like, the silver plan premiums went higher, and the cost sharing reductions were made for those plans, but then because that premium is so high, that was used as the benchmark, but it's the second most expensive silver plan in an area, correct? So it's not the most expensive silver plan, is this something like that?

[Mike Fisher (Health Care Advocate)]: Other side, second lowest cost silver. Second

[Brian Cina (Member)]: lowest cost. Can you explain that?

[Mike Fisher (Health Care Advocate)]: Not the lowest cost.

[Brian Cina (Member)]: I see. So it's not the second highest. It's the second lowest. Yeah. Okay. Yeah. Yeah. Okay. So so then the second lowest option in Vermont, there's two. Correct? This is MVP and No. No.

[Mike Fisher (Health Care Advocate)]: There's just one in the marketplace. It it is an MVP plan.

[Brian Cina (Member)]: Oh, there's only one silver

[Mike Fisher (Health Care Advocate)]: The second lowest cost silver plan in the whole market, by carrier.

[Brian Cina (Member)]: But in the whole marketplace, that's

[Francis McFaun (Vice Chair)]: a silver. Right? There there is a silver, another standardized plan, a silver that you can combine with an HSA, which is actually more expensive, that makes it that the most expensive, and then the other one, the second.

[Brian Cina (Member)]: So this is what I'm trying to understand is, but it's a silver plan that the benchmark's in. It's the second lowest silver plan in your marketplace is the benchmark. And then from that, they calculate your tax credits, which is why someone with a bronze plan like me, just to put an example

[Mike Fisher (Health Care Advocate)]: Daisy is shaking her head. I I was saying when I sat down here

[Francis McFaun (Vice Chair)]: my head at Deb, and Deb is, like, blank. Totally blank.

[Brian Cina (Member)]: It's hard to understand. That's why I'm repeating it back because I don't fool I've heard this for years.

[Mike Fisher (Health Care Advocate)]: Springing. Brian, let me try and let me let me try and describe, and I'm just gonna get myself in trouble. So let's do it. We're gonna muddle through this together. Okay. So to come up here with your your premium tax credit, you take your income or family income, and you multiply it by whatever percent of the income the Affordable Care Act says that you should pay. So maybe it's you know, if you're lower income, let's say it's two and a half percent of your income. And so that is the amount that the Affordable Care Act says should be your family contribution. And then you apply that to the second lowest cost silver plan, and the difference is the amount of premium tax credit that you get to go. So let's let's

[Francis McFaun (Vice Chair)]: On any plans.

[Mike Fisher (Health Care Advocate)]: On any plans.

[Brian Cina (Member)]: Which is why my bronze is only 30¢ a month right

[Francis McFaun (Vice Chair)]: now. Right.

[Mike Fisher (Health Care Advocate)]: How much?

[Brian Cina (Member)]: An 800 and something dollar plan, I'm only paying 30¢ a month. However, I'm afraid that I'm going to owe money because they're factoring in tax credits, right?

[Mike Fisher (Health Care Advocate)]: Yeah, they are.

[Brian Cina (Member)]: Yeah, so I'm like, uh-oh, I'm going to be screwed if these things don't pass soon. Sorry

[Mike Fisher (Health Care Advocate)]: to

[Brian Cina (Member)]: say Well, I'm going to be

[Mike Fisher (Health Care Advocate)]: So Yeah. Thought of a worse word. So let let me try and go back to instead of going all way down this rabbit hole, there's a lot of details here, but let me try and go back to the basis basics of this. We we followed the rules as laid out by CMS and applied the appropriate rating to those those silver plans that, because of the cost sharing reduction, are much higher value and and apply that factor to the entire mark to the entire silver across silver. And that boosted the cost of silver significantly, and and then we made sure that nobody was left in silver who didn't need to be left in silver. So the only people who are left in silver today are people between Medicaid and 200% of the federal poverty level. And and we, in effect, drew down, I think the number is $53,000,000 of federal dollars to help people afford their health insurance. And we we've done it for two years. We did it for '25 and for '26, and it's been it worked exactly like it was predicted to work, and it's been an incredible benefit, affordability benefit for for Monsters. And I'm sure I well, let me just say to the atmosphere, to the YouTube world, this is my best understanding of it. I've spent a lot of time on it, and I think I'm right. I'm confident I'm right. But if somebody says, oh, it didn't work exactly that way, I wanna hear it so that I can get back and correct. But that's that's my understanding of how this is working.

[Francis McFaun (Vice Chair)]: Brian, go ahead.

[Brian Cina (Member)]: So if a person is receiving premium tax credits currently and Congress doesn't act, are people gonna suddenly owe in their taxes hundreds of dollars because they didn't pay it towards their health insurance?

[Mike Fisher (Health Care Advocate)]: No, there's no act of Congress that's needed to continue today's premium tax credits. It is funded. There there's yes.

[Brian Cina (Member)]: What so what was the thing that we maybe I'm, like, thinking of the wrong what is the thing we needed them to renew?

[Unidentified Committee Member]: So The city versus tax credit? Okay.

[Francis McFaun (Vice Chair)]: Yes. Yeah. This is what we have.

[Mike Fisher (Health Care Advocate)]: There was what we dubbed the enhanced premium tax credits

[Brian Cina (Member)]: Okay.

[Mike Fisher (Health Care Advocate)]: That were passed originally in ARPA, which was significantly more generous, and those enhanced tax credits expired at the end of last year.

[Unidentified Committee Member]: So there's enhanced premium tax credits premium tax credits and subsidy. Three different categories?

[Mike Fisher (Health Care Advocate)]: And and and cost sharing reduction subsidy. But the but the first one you said, the enhanced premium tax credits are a thing of the past. I don't think you need to understand them anymore.

[Francis McFaun (Vice Chair)]: They're Not understood.

[Unidentified Committee Member]: There's a our distinction.

[Brian Cina (Member)]: You know? Our marketplace folks are calculating this all for us behind the scenes when we get our bill. Like, they're, like, trap based on your income taxes, they're, like, doing this for you. And so without that federal policy, without that those tax credits, working people would be paying hundreds and hundreds of dollars more for their insurance. Thousands, dollars more. Thousands, that's probably actually, yes, over the course of a year, yeah. It just seems so complicated.

[Francis McFaun (Vice Chair)]: The silver plan is used as a metric or something to measure to establish certain benefits. What plan do people end up? Is is it like a gold platinum? So

[Mike Fisher (Health Care Advocate)]: will will people buy the plan that makes sense that they decide to buy? I mean, they're in the marketplace, and they make the decision, and they and, you know, if they're thinking they're thinking rationally, I should pause not to say it. Maybe I shouldn't say it that way. One might think that somebody who expected to have a lot of health care expenses, maybe they knew they were pregnant or were planning to get pregnant, or maybe they knew they have a chronic condition, or maybe they, you know, they just know their health care needs, know they have ongoing needs, would tend to buy a richer plan. And so they might buy a a gold or a platinum. Equally so, I'm 28, and I'm feeling fit, and I'm not worried about this stuff. I wanna be protected, I'm gonna go buy it abrupt. So they can choose to go buy whatever level plan fits them and their fitness needs.

[Francis McFaun (Vice Chair)]: And do they get the cost sharing reduction?

[Mike Fisher (Health Care Advocate)]: They get the premium tax credits for whichever plan they buy, but cost sharing reduction is just limited to silver.

[Francis McFaun (Vice Chair)]: Just silver. So actually you have to be on silver to get those. May I ask you about something that is like related topic that Abby was in talking about today.

[Mike Fisher (Health Care Advocate)]: Yeah. Can I can I just say before we leave it, there's a lot of discussion nationally about whether states are using the silver load to adequately pay for the cost of the cost sharing reduction benefit? And Vermont and a handful of states, as I said, went further, But and so I maybe I should just say, I think there's a pretty there's a decent likelihood that the federal government is gonna close this door to us and, which would be too bad, and it would it would it'll hurt hurt Vermonters and a handful of other states.

[Unidentified Committee Member]: Yeah. Go ahead. This is just to make sure I understand the language because it's a glimmer, and that's more than it's been. So that's I appreciate that a lot. So I hear the enhanced premium tax credits are gone. I hear that the federal subsidy is gone, so those two are gone. The premium tax credits still exist, and that's federal.

[Mike Fisher (Health Care Advocate)]: Yes.

[Unidentified Committee Member]: And then the cost sharing reduction for the silver loading is only at the state level.

[Mike Fisher (Health Care Advocate)]: No. And the federal law around cost sharing reduction remains, and the funding and we have fashioned a way to fund it.

[Francis McFaun (Vice Chair)]: But but but it

[Unidentified Committee Member]: has to be funded at the state funded at the state level even though it's a federal law?

[Mike Fisher (Health Care Advocate)]: We continue to raise the money for the cost sharing reduction through the overload, and I don't hear a contemplation of eliminating that. But because of the way that we're applying the cost of it, it ends up being paid for by the federal government.

[Francis McFaun (Vice Chair)]: Okay. Thank you. So not on the agenda, but Addy was talking today about a basic health program. Wondered if you had any thoughts about whether, because you, when she was talking about it, I'm like, that sounds like Catamount. You were around in Catamount, I didn't know that.

[Mike Fisher (Health Care Advocate)]: It might sound like catamount.

[Francis McFaun (Vice Chair)]: The premise of it, or the idea behind it.

[Mike Fisher (Health Care Advocate)]: I think it provides for an opportunity for us to give an added benefit to people up to 200% of the federal poverty level and a Medicaid life benefit up to 200% of the federal poverty level and pay for that with the federal premium tax credits that would have been given to Vermonters had we knocked up. And so the reason why your question really fits with this conversation is, remember, the whole silver alignment was based on right pricing people below 200% of the federal poverty level. And so the basic health plan, mechanism and the silver alignment mechanism don't work together. If we do basic health plan, nobody will be in the exchange below 200% of poverty, and we'll get no room. So we have been sort of grappling with this question for a while. If we have let me just let me just say it. Remember, the silver alignment benefit goes to any Vermonter who gets premium tax credits, so up to 400% of the federal poverty level. The basic health plan and it's worth, we think, around $53,000,000. The basic health plan would be a substantial, incredible step forward for Vermonters under 200% of poverty. And I don't know the exact value of it to Vermonters, but I think it's I think it's a lot into that smaller set that lower income set of Vermont's. So the so comparing the two things is difficult because they apply to different populations. You know, let's just imagine for a minute that they were both worth $53,000,000. There's sort of a policy choice that could be made. Hey. Do we wanna spread this $53,000,000 over all Vermonters under 400% of poverty, or do we wanna apply it? So I guess what I mean to say is it's not an easy choice to compare that. But if we are losing the silver load, that choice, in my mind, gets very simple.

[Francis McFaun (Vice Chair)]: So if we lose the silver load, if we explored a BHP vapor, would that be detrimental in any way other than what would already be detrimental to the 200 to 400? Or would it have no effect on them?

[Mike Fisher (Health Care Advocate)]: Here's a question I should know the answer to. The first part of the silver load, the part of the silver load that's to pay for the CSR costs, How would the basic health plan impact that? And as I'm saying that out loud, I don't think I'm just gonna put that on the table. That's something we need to grapple with. But, no, I think if we lose the, you know, the the I I tend to call it silver alignment, the part of silver load that was really designed to bring down costs. If we lose that, I don't think basic health plan or not basic health plan has any impact on people above 200%, between 204100%.

[Francis McFaun (Vice Chair)]: Great. We're actually taking them out of the marketplace, putting them somewhere else. Okay, thank you for saying that. Thank you for saying that. I was not saying, because some of that might have a Thank

[Mike Fisher (Health Care Advocate)]: for saying that. I think that the detractors of the basic health plan would recognize that we'd be pulling lives out of the market, an already very small market. And what's the consequence of that?

[Francis McFaun (Vice Chair)]: I mean, I do like that plan. It does sound like catamount, except there's no premiums, I I think.

[Mike Fisher (Health Care Advocate)]: No. I mean, we would we would be getting them substantially better coverage.

[Francis McFaun (Vice Chair)]: I'm killing the market. Sorry. Associations are silly. I hope not. It would probably have to be a great deal of actuarial analysis on I think

[Mike Fisher (Health Care Advocate)]: you would have to hear from the carriers about their perspective on basic health plan. I think in my experience, the MVP is very familiar with it. They live with almost on steroids health plan in New York. And so my in my experience, they're more com they're comfortable with it. I think you'd wanna hear from Blue Cross too. I don't think there'd be strong opposition, but I could be.

[Francis McFaun (Vice Chair)]: Yep. This might not even be able to write. The $13.32 waiver that she Mhmm. Had mentioned with the about leveraging that premium tax credit. Does that have anything to do with I don't know.

[Mike Fisher (Health Care Advocate)]: So I think Addison said this morning that the basic health plan is an it's not a waiver. It's an entitlement. It's something that is a state option.

[Francis McFaun (Vice Chair)]: The basic health plan is a thirteen thirty one waiver. The thirteen thirty two waiver is the reinsurance. Waiver is straight, mister.

[Mike Fisher (Health Care Advocate)]: So thirteen thirty two waiver is a waiver from the Affordable Care Act, and an eleven fifteen waiver is a Medicaid waiver. And to be honest, I had never heard of a thirteen thirty one waiver.

[Francis McFaun (Vice Chair)]: Abby said that the thirteen thirty one waiver is the PHP. Yeah. That's, yeah. Yeah.

[Mike Fisher (Health Care Advocate)]: But she also, I heard her say this morning and I've heard it characterized before, it's not something that it's an option for the state. Not so much of a waiver, but an option.

[Francis McFaun (Vice Chair)]: If you have I think Val asked you, however, about the thirteen thirty two waiver, which is the reinsurance. Do you have an opinion on that? I think you've already given your opinion, didn't you? I don't think I have.

[Mike Fisher (Health Care Advocate)]: I think the right answer to all the version of the reinsurance language that's in whatever bill is in your committee, five eighty five is topper's bill, is to allow the, allow the state to go, price it out and evaluate it and come back to you. And so, I have absolutely no problem with I think that's a great idea. I have very strong suspicions that it won't make sense, but I'm happy to see the numbers. Yes. It makes sense for us to see the numbers.

[Francis McFaun (Vice Chair)]: As a recommendation on their technical analysis. Anything else? You wanna opine on? Thanks for doing this shorthanded. It's clearly quite senior loading.

[Mike Fisher (Health Care Advocate)]: And and and I should say, I'm happy to

[Francis McFaun (Vice Chair)]: up there. We wouldn't have to

[Mike Fisher (Health Care Advocate)]: Sit down with you individually and walk through it again.

[Francis McFaun (Vice Chair)]: So who makes it so complicated?

[Mike Fisher (Health Care Advocate)]: You know? It's like the old farmhouse where you you build a little bit, and then you build a little bit more, and you build a little bit more, and you have to do a renovation on the first part before you

[Francis McFaun (Vice Chair)]: That, I understand better. Thank you, Mike.

[Mike Fisher (Health Care Advocate)]: Thank you.

[Francis McFaun (Vice Chair)]: We'll be back

[Mike Fisher (Health Care Advocate)]: at

[Francis McFaun (Vice Chair)]: 02:00.