On January 4, 2017

2017 Legislative preview: Medicaid, mental health and Vermont Health Connect

By Erin Mansfield, VTDigger

When lawmakers begin the legislative session Wednesday, Jan. 4, they will be dealing with many of the perennial issues that stem from the ever-rising cost of health care.
The Joint Fiscal Office projects that lower-than-expected Medicaid funding from the federal government will be a factor in an estimated $55 million to $75 million gap in the upcoming fiscal year 2018 budget.
Specifically, the Legislature will need to begin planning for long-term changes in its mental health care system because in 2021 it will start losing Medicaid as a funding source for the Vermont Psychiatric Care Hospital in Berlin, the Brattleboro Retreat and several substance abuse treatment centers. The Legislature is also poised to play a role in deciding whether Medicaid should fund expensive prescription drugs for hepatitis C patients. The Drug Utilization Review Board has recommended the executive branch lift restrictions for certain patients.
Al Gobeille, the incoming secretary of the Agency of Human Services, said the all-payer model of health care payment does not require the Legislature to take specific action on health care reform this year. But he said the Legislature would likely want to keep taking testimony to understand the new health care deal.
Sen. Tim Ashe, D/P-Chittenden, who is expected to be the Senate president pro tempore, said the state could lose funding for its Medicaid program if President-elect Donald Trump makes good on his campaign promises — but not for another year or so.
Ashe said the Legislature would need to keep in close contact with Vermont’s congressional delegation. He said if Trump starts funding Medicaid with block grants, that would mean less Medicaid money for Vermont to take care of patients.
“I would love to say that I’m really wildly optimistic about what is going to happen with a Trump administration,” Ashe said; “the reality … all we can see right now are storm clouds.”
Rep. Mitzi Johnson, D-South Hero, the presumptive new speaker of the House, said the key to balancing the Medicaid budget will be to have policy committees look deeply at Vermont’s “whole range of Medicaid services.”
Johnson said that because enrollment in Medicaid went up drastically starting in 2014 and is now slowing down, she wants to look closely at how spending per enrollee has been changing, too.
In terms of the hepatitis C drugs, she is not concerned about the impact on the budget. “We get hit with changes in drugs all the time,” she said. “There was Orkambi (for cystic fibrosis) before this.”
Mental health facilities
Ashe said he has directed the Senate Committee on Institutions and the Committee on Health and Welfare to look at whether Vermont has enough physical space for mental health patients.
“It relates both to the number of beds we have for acute mental health patients [and] dealing with the community hospitals” that right now are experiencing stress, Ashe said.
The Vermont Department of Mental Health reports that involuntary hospitalizations for adults are at a record high, and voluntary hospitalizations for children are also up. The department, still led by one of Gov. Peter Shumlin’s appointees, is advocating adding beds.
Ashe said he was one of several senators who wanted Vermont to build a large centralized facility in 2012 after the Vermont State Hospital was damaged in flooding from Tropical Storm Irene the year before. “In truth, while it might not have been able to be funded, the 50 (beds) was probably the right number,” Ashe said.
The state instead built the 25-bed Vermont Psychiatric Care Hospital in Berlin — and the feds are pulling back funding starting in 2021. In response, Sen. Jane Kitchel, D-Caledonia, the longtime chair of Senate Appropriations, said the state should be looking at its overall mental health system.
Johnson also says the House should be looking at whether the system is functioning in its current configuration. She said that’s a big part of the leadership strategy she will be instilling in her committees: to look retrospectively at programs and decide what Vermonters need in a particular moment, instead of pushing pet projects.
“There’s been a lot of changes in the last six or eight years with the closure of the state hospital, expansion of community options, and some of the step-down facilities that we have,” Johnson said, “but we’re still seeing long waits at emergency rooms in some cases, and so looking at that is really important.”
She added: “Coupling that discussion with the new global commitment waiver that puts some pretty hard parameters around what the federal government will or won’t pay for is a really important discussion. I’m quite sure we’ll be talking about our capacity for mental health treatment.”
Vermont Health Connect
Lawmakers are likely to give significant weight to the independent review they commissioned to advise the state on whether to repair or replace the embattled health care exchange.
The study, released Dec. 21, said Vermont Health Connect has “significant deficiencies” but should be fixed, not thrown out. It also reiterated some of the chronic problems the exchange has had, including poor customer service.
Johnson said she will direct the House Health Care Committee, which recommended commissioning the report during the 2016 session, to take action based on the 121-page report, which was written specifically in accordance with the committee’s language.
“The option that lets us serve the Vermonters with the policies that we think are important at an appropriate cost with decent service — that’s what I’m looking for,” Johnson said.
In the wake of the report, Gov.-elect Phil Scott, who campaigned on ditching Vermont Health Connect and possibly joining Connecticut’s exchange, has not said definitively what he would do with the exchange.
House Minority Leader Don Turner, R-Milton, said he would be “open to anything” that is “far more customer-friendly, far more affordable and sustainable.” He did not advocate moving to the federal exchange.
“I am conscious of the subsidies and how Vermonters [will be affected],” Turner said. “I just don’t see how Vermont can continue to pay for Vermont Health Connect and be able to have Vermonters provide affordable insurance.”
Ashe said his main concern is whether Trump and Congress repeal the Affordable Care Act, and if their actions would force the state to shut down Vermont Health Connect.
“If suddenly the whole need to have it in the first place [were] eliminated, it would be like the end of a nightmare without the delight of waking up and feeling good that it was just a nightmare,” Ashe said.

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