The May issue of EBA contained an
Reading it reminded me of a meeting I attended in June 2010 in New York, where I provided "the Massachusetts perspective" to an advisory board that insures people nationally. After listening to two hours of fearful and anxious conversation, it occurred to me: "I'm in a time-warp - everybody else in the room is in (pre-reform) 2007!"
After reading the interview I had the opposite feeling: "Vermont isn't the United States - this story predicts the wrong future!"
Advisers in other states are understandably concerned, but the appropriate response to this news is to start envisioning a post-reform future with them in it.
The New England states are definitely not like the rest of the country. Here in Massachusetts, there is a long history of not-for-profit medicine, and our major insurance carriers are NFPs as well.
Similarly, Vermont is culturally different from the rest of the country. It is the home of former governor (and physician) Howard Dean, and unlike any other state, has elected an actual, self-declared socialist to the U.S. Senate: Sen. Bernie Sanders.
Extrapolating Vermont's reform efforts to the rest of the country would be a serious mistake. But that doesn't mean there aren't lessons to be learned. The Massachusetts reform has largely been a success because of one key fact: All of the major stakeholders had a seat at the table during negotiations, including the benefits and insurance community.
Vermont obviously has a different constellation of players, and Gov. Peter Shumlin (D) has made quick progress because he has also included the relevant stakeholders as he sees them. The main lesson here should be: Make sure we have a seat at the table.
The New England states are different in another key respect: Our rate of uninsureds is far lower than the national average. According to research conducted by The Kaiser Family Foundation (statehealthfacts.org), the national average is about 17%. In Vermont it is about 10%, and here in Massachusetts it stands at about 5%. We're starting from a better position.
While some might be alarmed that a small state is moving forward with a socialized system, there is a far more pressing question for the other 48 states: What sort of market-based solution is going to get us from 26% uninsured (as in Texas) down to the near-universal levels required by the Patient Protection and Affordable Care Act? You may have a philosophical distaste for what's going on in Vermont, but what if it works? Why should consumers in other states be content with a market-based "solution" that fails 20% of its citizens?
Many of the reforms have made the products we sell far more appealing. Start selling them.
It has often been said that business owners would rather not be involved in the annual ordeal of choosing a health plan. But business antipathy toward reform (the U.S. Chamber of Commerce comes to mind) seems at odds with that bit of wisdom. Would businesses really be willing to trade a permanent salary increase to their workers for the freedom of never having to deal with another renewal? If not, then isn't the business community's insistence on being involved just a form of wage control?
Insurers and advisers would be better advised to start thinking about complying with PPACA - and offering substantive innovations that expand affordable coverage. As our former governor Mitt Romney has said, what we have done in Massachusetts might not be the right model for the country as a whole. But overreacting to Vermont doesn't help. Shaping how reform will look in your state will.
Tyrakowski is a partner at ETBenefits, LLC in Quincy, Mass. You can reach him at
