Legislative Update 8/3/11 (2)

BUDGET – While the revenue forecast in Vermont looks much better than anticipated, the recent debt deal out of Washington could be very problematic for the states and municipalities.  I attended the July Joint Fiscal Committee and the state budgetary news had members happy on every front. 

 The state finished FY’ 11 with a $40 million dollar surplus and all its reserve accounts are fully funded. Moreover, the human services caseload reserve fund, which has historically been used to meet a wide range of budget pressures, now has over $60 million; and there is an additional $7m reserved specifically to meet any  of the looming challenges  from  the FY’12 federal budget forthcoming from Washington.  The governor is even proposing setting aside more money fro the rainy day fund, upping the percentage from 5% to 8%.

 The FY’12 federal budget is uncertain at best and has been made even more uncertain by the recently enacted debt ceiling law. However, all predictions are ominous.  For example, even the President’s proposed FY’ 12 budget calls for a 40% cut in fuel assistance.  I am attaching a good description of the new law and how it might impact senior issues and programs.  Short analysis is that we may need much of what has been set aside in Vermont to offset the human services cut we may be seeing from Washington next year and beyond.

 CHOICES FOR CARE-  It was interesting to see legislators at the above meeting take great pride in their decision to spare the $5 million in  home based services under CFC.  You will recall that we worked extremely hard this past session saying the proposed cuts to respite and IADLs were penny wise and pound foolish; and ultimately discovered  that they were not even financially necessary as the CFC program was running a significant surplus.

 When the final figures came in on July 1 CFC was indeed approximately $10m in the

Black and those legislators at the JFC committee were pleased that they had used the surplus to avoid the cuts. 

 In fact, when we saw the final numbers, we began to question whether the one CFC cut that did go through – about 10% cut totaling $312k to those on flexible choices – shouldn’t be reinstated.  These seniors and persons with disabilities were about to receive letters saying their monthly allowance would be going down and given the size of the surplus. While we were unable to stop the letters we did get on the mid July agenda of the DAIL Advisory where others and we were able to convince the Department to reverse course and fully restore the cuts.

 There continues to be some question as to extent of the available surplus.  We will continue to drill down on this and if significant surplus still remains we will argue that we should consider enhancing LTC services as envisioned by the 2005 CFC law and amendments. 

 FUEL AND ENERGY ASSISTANCE –Last winter’s caseloads hit record highs and combined with the unexpected increase in fuel prices, recipients’ benefits covered far less fuel this winter than expected. Fortunately, you will recall, that in December the federal government increased our block grant from $14m to $25m. Without that last minute bailout, benefits would have had to be severely reduced.

 However, while we survived this heating season, the same ominous factors face us for next year – with prices showing no sign of abating and the federal government (including the president’s proposed budget) calling for a 40 % reduction in federal help. With the new debt ceiling law (see attached) the likelihood for level federal funding a $25m to VT seems more and more remote.

 The most telling numbers given to us on the Fuel Assistance Task Force is that next year’s worst case scenario could see an average benefit of just $400 (which could be less than what some companies require to pay for a minimum delivery of 100 gallons). The average home will cost $2800 to heat. So our fuel program could wind up paying just 15% of the average heating cost, as opposed to the programmatic goal of 60%.

 Next year’s potential crisis in fuel assistance has already been flagged by key legislators as a major problem area for next year’s budget. In fact, many of the pleas this past session for use of rainy day and other reserve funds were denied using the potential crisis in LIHEAP as to why cuts this year could not be restored. Hopefully, these same legislators will remember their reasoning if and when we need them to appropriate significant state funds to backfill federal reductions to LIHEAP come next winter.

 One piece of very good news that could help with our fuel assistance problems was the just released decision by the Public Service Board. The petition by AARP to establish a low income electric assistance program has now been approved. While all the details have yet to be finalized, the program will apply to all Central Vermont and Green Mountain Power who have incomes below 150% of poverty (about 37,000 households). Those qualifying will have a 25% subsidy on their bills (about $20/mo) and can receive a one time arrearage waiver when first applying.  This new program can take significant pressure off of our fuel program as folks who heat with electricity can also qualify for fuel assistance and the fuel assistance crisis program currently pays to avert electrical disconnects (so furnaces can keep running).  With the new low-income electrical assistance program, we believe there will be far fewer disconnects and, thus, less pressure on the fuel assistance program.

 The Public Service Board will now schedule a status conference so that AARP, DPS, CVPS and GMP can work on the rate filings that will implement the program. It is unclear whether this program will commence prior to this heating season.

 (I just received a summary on program projections for next year from the fuel program chief- see FUEL OFFICE UPDATE attached )

 HEALTH CARE REFORM (H.202)  – As mentioned above, health care reform dominated the statehouse.. Most of the new law sets out a roadmap for getting to a single payer plan in 2017 (or 2014 with a federal waiver) with many of the details left to a powerful 5 member board appointed by the Governor. The Board is charged with making more detailed recommendations on the single payer reform proposal for the legislature to review and approve next year and into the future. The controversial issue of how to pay for the system – Dr. Hsiao recommended a payroll tax on employees and employers- is deferred for this year and not part of the legislation.

Marge Power put together excellent comments regarding senior citizen concerns with the original Hsiao study which highlighted two major omissions – long-term care as a covered benefit and non-inclusion of Medicare in the single payer model – as well as the proposal to subject working seniors to a payroll tax for which they will get nothing in return. The latter issue will not be addressed this year, as no financing proposal is included in the bill. How Medicare will ultimately be treated under Green Mountain Care is still unclear and will be the subject of further study by the five member board and future sessions and possible waiver requests. We were successful is getting mention of long term care as a benefit that should  also be studied , if affordable for future inclusion in benefit structure of Green Mountain Care.

H.202 would also repeal the Medicaid Advisory Board, upon which COVE currently has a statutory seat, effective this July; and would replace it with a new Consumer and Health Care Exchange Advisory Board.   It is very possible that COVE will retain its seat on the new board, as the new board’s required composition will be similar to the old. 

 Most immediate for implementation of the new law is how Vermont will structure the mandatory exchanges which are said to function like an Orbitz for healthcare.  There will be mandated and limited standardized policies with subsidies for those with low incomes, so Vermonters can make apples to apples comparisons on policies. However, there are many unanswered questions (e.g. what kind of businesses are exempt or grandfathered from the exchange) and how retirees fit into the exchange. 

 Last week I met with representatives of labor groups and , as an example, here are just some of the questions we came up with as they apply to retirees.  It will give you a flavor of the need to watch out for senior’s interest as we proceed toward 2014.

1. There are many, many questions about how retirees and their dependents will be treated once the Exchange is operational. Generally speaking, are they in or out of the Exchange come 2014, and, if in, how will their eligibility be determined? Is their status dependent on their relation to Medicare, their post-retirement employment, if any, or if they are receiving benefits under a Taft-Hartley Plan or a defined benefit retirement plan, or their residency status? Some of the questions pertinent to retirees raise additional issues about adverse risk selection and the cost implications for existing purchasing pools for both actives and retirees once the Exchange is active.  Here is a sample of our concerns:

 a)      Will retirees, both Medicare- and non-Medicare eligible, covered under a Taft-Hartley plan be required to join or be given the option of joining the state Exchange come 2014? 

 b)      What becomes of retirees in defined benefit plans (teachers, state workers and municipal employees) once the Exchange is operational?  A public retirement plan is not an employer, so how do you see their members being classified for Exchange purposes? Will such institutions or plans be given the option of purchasing on the Exchange, like any large employer? 

 c)      If retirees are on the Exchange, or can opt to join, will their health benefits be portable outside of Vermont’s borders?  Will the Vermont Exchange negotiate reciprocity care and financing arrangements with sister Exchange administrations or Exchange carriers in other states? 

 d)     There are Vermonters who retire with health benefits from a Vermont source, private or public, but who change formal residency status after retiring by moving to another state, or who spend several weeks or months in another state each year.  If they are eligible for health coverage on the Exchange, how will their residency status affect their benefits and their costs?

 e)      Will the Exchange provide “wrap”/supplemental coverage for Medicare-eligible retirees who have no other source of post-retirement health benefits other than Medicare?  Will they be eligible for federal premium assistance on the Exchange if they are also receiving Medicare?

 f)       Will private carriers be permitted to sell Medi-Gap plans in Vermont once the Exchange is running?

 G)     There are Vermont retirees who are still working and getting their health benefits from a different employer than the one they were employed by when they retired. Some of these retirees are deferring a health benefit they are entitled to from their old employer or from a public retirement system. Will these individuals move with their new employer, post retirement, to a benefit package on the Exchange until they elect to get their health care benefits from a retirement system or under the terms of a Taft Hartley Plan? 

 ADULT PROTECTIVE SERVICES (APS) – The remediation plan agreed to between DAIL  and Vermont Legal Aid  is moving forward.  Legal Aid reports that there has been substantial progress, but large gaps remain. Here’s a brief progress report

 Progress:

According to DAIL , APS is now doing some things that advocates have been asking them to do for years. They report that investigators have an average caseload of  about 25 cases, they are routinely interviewing the victim, they are re-contacting uninvestigated cases after 60 days.  Reporters talk to the screener or get a returned call within 48 hours (barring week-ends). Protocols are in the process of being developed.  They have received input from the advocates on all their forms and letters and will provide them  with the changed forms and documents. They have re-trained the investigators and the cases will be substantiated using a reasonable person standard.

 They have also increased their staff and are hiring for a new APS Director

 Problems:

-          They have 261 Priority Three cases awaiting investigation in a backlog or queue.  This is only 13 fewer cases than they had on February 18^th.

o   The Commissioner says the problem is more complaints, a higher rate of investigation, investigations potentially not being efficient, and problems retaining their workforce.

o   if they do not hire a great deal more staff they will not eliminate the backlog and queue by October 1, as required by the Corrective Action Plan.

 -          DAIL has not yet developed an adequate overnight,  week-end and holiday protocol with DCF.

 -          They have not begun developing an Advisory Panel.

 DUAL ELIGIBLES PROJECT . – The state’s efforts to become a managed care entity  for those eligible for both Medicare and Medicaid, similar to the waiver VT now has for the younger Medicaid population is proceeding aggressively. They are one of 15 states to  receive implementation planning grants to design such a program and are working diligently and coordinating extensively with all stakeholders – having numerous working group meetings almost weekly. AHS has a robust web page, http://humanservices.vermont.gov/dual-eligibles-project, fully describing the effort that would impact aver 21,000 Vermonters. There are great potential advantages to seniors from better coordination of care under Medicare and Medicaid. There are also some potential pitfalls. A detailed explanation of the same can be read at http://www.kintera.org/TR.asp?a=pvI0IhM0JmI2KqJ&s=ivKSLaOTJfLTIaO3H&m=ghLSI0OCIeLRLaL&af=y