Originally published on Vermont Digger in March 2015
Gov. Shumlin has proposed a .7 percent payroll tax, the main purpose of which is to address the so-called Medicaid cost-shift. The bulk of the new revenue would be used to draw down federal matching funds thus allowing Vermont to more closely align Medicaid reimbursement rates with those of Medicare (Medicaid currently reimburses at around 60 percent while Medicare’s reimbursement rate is closer to 80 percent). Gov. Shumlin has committed that this way of addressing the cost-shift will result in a 5 percent reduction of private insurance premiums (though the Green Mountain Care Board (GMCB) is not making the same promise).
Leaving aside the important yet unanswered questions about whether the cost-shift actually exists, and if it does, the degree to which it occurs, there is ample skepticism in the General Assembly about whether the payroll tax is a good idea. While still on the table, the payroll tax may not make it to the governor’s desk this year, or ever. Consequently, the Legislature should consider alternative ideas that would reduce the impact of the cost-shift. The clearest and most plausible idea is to increase health care price transparency. Continue reading “The Importance of Health Care Price Transparency”