Vermont business group endorse plan to address Medicaid cost shift

February 25, 2015
Vermont Businesses for Social Responsibility endorsed Gov. Peter Shumlin's plan to use a payroll tax to raise reimbursement rates for doctors who see Medicaid patients. Under Shumlin's plan, a 0.7% payroll tax would be assessed on employers in order to bring Medicaid reimbursements up to the same rate that Medicare pays providers. The Green Mountain Care Board says Medicaid pays about 60% of what medical services cost, while Medicare pays closer to 80%, this causes the Medicaid cost shift in which providers charge more to private insurance companies. Members of VBSR said the Medicaid cost shift should be addressed because it amounts to a "hidden tax" on some employers while rewarding businesses who do not give their workers adequate pay or health insurance. Members said a new tax would help doctors afford to see Medicaid patients, penalize employers who don't offer health insurance to their workers and reduce healthcare costs for employers who do provide health insurance to their workers. The VBSR members did not say that a payroll tax was the only way to address the cost shift, but said the cost shift should be addressed immediately to slow the increase in premium costs.