State News
January 15, 2016

Legislative session preview 2016: Medicaid and Marijuana

By Mark Johnson, VTDigger.org

The top two political leaders at the Vermont Statehouse share a concern about balancing the state budget while still protecting Vermonters and neither are high on the idea of legalizing marijuana but won’t stand in the way of its being passed.

Medicaid and Marijuana, that might well sum up the key issues Speaker of the House Shap Smith and Senate President Pro Tempore John Campbell will be juggling in the next four or five months as they lead their respective chambers. That, plus school reform with Acts 166, 77 and 46, calling for increased access to equal education (pre-K and early college duel enrollment) while simultaneously lowering costs.

Lawmakers returned to Montpelier Tuesday, Jan. 5, for the second half of this two-year legislative session.

The 150 representatives and 30 senators face some familiar challenges. More money is needed for the state’s share of Medicaid, in part because more Vermonters than ever are on the public health care program. They see growing demands on human services programs either directly or indirectly related to the insidious opiate problem that has woven its way into Vermont and much of the country. And one of their first tasks will be to try to fix a law they passed last year that they hope will slow the growth of education spending, which continues to go up despite fewer and fewer students.

There will be pressure from advocates pushing ideas like taxing carbon or making changes in health care delivery and payment. Unlike some years in the recent past, there does not appear to be a high-profile social issue, like gay marriage or death with dignity, that will dominate the session, unless you count the anticipated philosophical (and financial) discussion over the pros and cons of legalizing pot.

The Statehouse is the biggest stadium and stage for Vermont politics. This year, observers will be watching to see how well Gov. Peter Shumlin and Speaker Smith will fare as lame ducks. Will Lt. Gov. Phil Scott use his pulpit to promote his run for governor? All eyes will be watching to see who will emerge and fill the vacuum with an almost complete reshuffling of the political leadership deck, with three of the four key legislative players — governor, lieutenant governor and speaker — moving on.

In separate interviews, Speaker Smith and Senate President Campbell discussed the upcoming session, some of their priorities and how they would lead their respective chambers where Democrats heavily dominate over Republicans. VTDigger also spoke with Lt. Gov. Scott, the highest-ranking member of the GOP, who is the presiding officer of the Senate and running to replace Shumlin.

Medicaid: increased enrollment, budget shortfall

Smith and Campbell said Vermonters should not be surprised, nor necessarily unhappy, that lawmakers seem to start every year with a hole in the Medicaid budget. It means, they say, more Vermonters are going to the doctor. They say the amount the program pays doctors and hospitals is too little and is dangerously squeezing the system.

The Medicaid gap is a two-fold challenge. Lawmakers need to cover higher costs than what they planned for when they passed the budget last spring. They need to come up with roughly $35 million for this year. Projections for next year could mean lawmakers need to come up with an additional $50 million on top of that, though Smith and Campbell say the numbers are changing, other accounts might be tapped, and the deficit may lessen.

The program has greatly expanded. Five years ago, roughly 170,000 Vermonters used the program. Today, it is more than 200,000, almost one out of three Vermonters. The total cost of the program, subsidized largely by the federal government, has gone from $1 billion to $1.56 billion over that same period.

“I think this is an issue that exists in perpetuity,” said Smith. “The fact of the matter is we have increasing health care costs whether it’s in the public health insurance sector or whether it’s the private health insurance sector. In the private sector, you just charge more for premiums. Because Medicaid is supported by taxes and everyone hates taxes, people are spooked and they’re like, ‘What are we going to do, what are we going to do,’ and the fact of the matter is I think the governor said it right: We’ve had a lot of success, we’ve covered a lot of people … if we want to continue to have that public health success, we ought to pay for it.”

Cutting benefits, Smith said, is “not palatable.” That’s telling low-income people they may have no insurance and “that just doesn’t work from my perspective.”

Reducing reimbursement rates further doesn’t make sense either, he said. One major hospital, Dartmouth Hitchcock, has sued over the rates and some practitioners say they can’t stay in business.

The speaker also said he was in a tiny minority who supported the governor’s payroll tax last year, which could have drawn down hundreds of millions in federal funds for Medicaid. But the plan was poorly rolled out and support not built ahead of time, even among those, such as hospitals, that would have benefited.

“If you don’t have the people who are going to be benefiting from it lined up together, then you just can’t move something that is as politically difficult as that is,” Smith said.

“Some people have suggested we just come in and cut benefits and look at eligibility and cut some people from the rolls,” Campbell said. “But unfortunately, I understand what their concern is and their feeling that would be a solution, but I can tell you it wouldn’t be a solution … [lawmakers would be] not only walking away from an unspoken duty to provide health care to all Vermonters, we would be fiscally making a huge mistake because those certain people will seek their medical care through emergency rooms.”

Scott says the program needs better management and accountability. He said the rolls need to be scrubbed of those who don’t qualify, higher penalties may be needed to deter abuse, and internal and external audits are critical.

“It’s obvious, we cannot afford what we have today, so we have to adjust limits to fit our ability to pay, with priority given to the most vulnerable,” Scott said.

On another health care topic, Campbell says he had “initial doubts” but now wants to study an idea promoted by Smith to expand a successful children’s health program, Dr. Dynasaur, to include young adults up to age 26.

Tepid reaction to pot legalization

Marijuana legalization is also expected to be heavily debated. The leaders of the two chambers are not enthusiastic about seeing it passed. Neither is Scott.

Smith says he could support legalization if assurances could be made that impaired drivers would be dealt with and legal weed kept away from children. Campbell thinks it’s a bad idea and sends a poor message while the state battles an opiate addiction crisis. Scott says there is “no hurry” and Smith says it’s not ready.

“I’ve been around this building a long time and I have this sort of intuition of when I think things are ready and when I think they are not and this bill just doesn’t feel ready,” Smith said. “It doesn’t feel ready to go all the way through. That’s not to say I’m going to prevent it from going all the way through. When I talk to people there are a lot of questions that people are asking that advocates for legalization haven’t satisfactorily answered.”

“It just doesn’t feel to me like it’s going to go all the way through this year,” the speaker said.

Just a few of the questions include which state agency would regulate the business, how the drug would be distributed and how stoned drivers would be prosecuted.

The speaker said supporters who assume it will pass because the Legislature is controlled by Democrats would be “wrong’’ and “they are going to be sad if they don’t do their homework.”

There are 85 Democrats, 53 Republicans, 6 Progressives and 6 Independents in the House. In the Senate, it is a 21-9 majority of Democrats over Republicans.

“I’m not saying never, but I’m not convinced we are ready, and the rush to passage shouldn’t be about money,” Scott said. “We have an opportunity to see the positive and negative effects of legalization with the other states who have moved forward. I am particularly interested in areas such as the detection of driving while impaired, the use of edibles and workplace safety. From my standpoint, there is no hurry.”

Campbell said: “This is what it comes down to. For us, a state government, to think that it is all right to balance their budget by making a previously illegal substance legal, to me, is a sorry state of affairs. We should not be looking to balance our budget by making pot legal.”

And the timing is poor, Campbell said, with the state’s focus on fighting opiate addiction. Still, he thinks it may pass.

Campbell, a deputy state’s attorney in Windsor County, is a former police officer. Early in his law enforcement career, his partner was killed in the line of duty.

During a break in an interview at his White River Junction office, Campbell went to a hearing in Vermont District Court. There, a man was facing burglary charges for robbing convenience stores, allegedly to feed a heroin habit.

“I don’t think pot is a gateway drug,” Campbell said after the hearing, “but I sure think that it’s a terrible message to send that we’re legalizing a substance that is going to be an altering substance, and we’re legalizing it now, but whatever you do, don’t go near that heroin or cocaine or any other these substances that alter your feelings.”

Campbell said the drug problem has led to crimes unheard of before, including a case in Northfield where a victim was doused with gasoline and burned to death.

“I think most people are unaware of the level of criminal activity that occurs,” he said.

The effect the opiate problem is having on children, he said, is profound. It is now the main reason that he has seen for children to be removed from their homes in Windsor County.

Medicaid and Marijuana. Maybe add methadone, too. And Mother Nature and man-made snow — and whether the lack of it early on will hurt tax revenues and the economy.

It will be a year of transitions: a governor and speaker retiring, the lieutenant governor leaving his post, seeking higher office.

At the end of his term, Smith, 50, will have served 14 years in the House, eight years as speaker. Scott, 57, was a senator for a decade before he became lieutenant governor six years ago. Shumlin, 59, has been a presence in the Statehouse for more than two decades, first as a representative and then as a senator before he was elected governor in 2010.

Together, the three have more than 50 years of experience in Montpelier. (Campbell, 61, who plans to stay, was first elected to the Senate in 2000 and chosen senator pro tem in 2011.)

“I do think it will take some getting used to in the respective institutions, having players who’ve been here for a while, who know how the system works, and know how to move legislation, gone,” Smith said of the departures. “I think that all of us have proven ourselves to be pretty effective in the building and I think it will be a pretty significant difference,” he said.

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