Universal Health Plan Governance Board: July 9th Meeting

Main focus: discussing strategies to meet the Revenue Replacement Target (RRT)

• RRT= the amount of funds not covered by federal and state money to be raised in a different way

• RRT calculation=Annual health care expenditure minus federal contributions minus state contributions 

• Milliman came up with low, high, and best expenditure estimates

  • Lowest has expenditure reduction related to fraud, waste, and prescription drug costs

Federal and state contributions

• Updated expenditure estimates were sent to the Legislative Revenue Office (LRO) to develop revised Health Care Personal Income Tax (HCPIT) and Employer Payroll Tax (EPT) proposals.

• The Finance and Revenue Committee was using $17 billion as the RRT, but the actual replacement target is closer to $35 billion per LRO calculations, which prompted discussion on whether the revenue strategy should be adjusted.

• Revised tax estimates are expected before the July meeting, with the final report currently scheduled for approval in August. 

Revenue Lever Options Discussed

• Add another revenue instrument

• Add tiers to employer payroll tax or HCPIT (adjust contribution to be proportionate to salary)

• Reduce benefits (exclude dental, vision etc.)

• Phase in population eligibility *medium-large impact*

 Michelle: Recommends all levers are offered to the public and involve them in final decision 

Report Timeline Discussion:

• A motion to delay the report failed. 

• Vote: 4 Nos (Amy, Michelle, Helen, Judy) 3 Yeses (Mary Lou, Mike Chunhuei)

Public Comment included: Consider wealth tax, phase-in Medicare.

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Questions? Contact emmaoppenheim@hcao.org