Vermont for health

WHILE Massachusetts legislators were deliberating over a path-breaking expansion of health insurance early this year, political leaders in Vermont were quietly looking over their shoulders. The result: Governor James Douglas is about to sign a bill, passed earlier this month, that has the same goal as the Massachusetts law -- to cover most of the uninsured in the state -- but goes about it in different ways. Good for Vermont, and good for Massachusetts for leading the way.

''There was energy from the south," said House Speaker Gaye Symington in a telephone interview last week as she explained how Vermonters, deadlocked over the issue, were heartened by the passage of the Massachusetts law last month. Both states will expand their Medicaid programs, both will subsidize insurance for people with low incomes who don't qualify for Medicaid. Both will require most employers who do not offer insurance to pay a fee, $365 in Vermont compared with $295 in Massachusetts.

Unlike Massachusetts, there'll be no mandate for every Vermonter to buy insurance. Instead, the state will set the standards for Catamount insurance policies, which will be offered through private insurers. And these policies will be designed to encourage Vermonters with chronic diseases to get treatment before they need to go into the hospital. The theory here is that preventive care will control costs.

Just to make sure the state has enough money for subsidies, the Vermont cigarette tax will be raised in two increments by 80 cents. The Massachusetts plan will be financed from existing programs and from revenue growth.

Smaller and more rural than Massachusetts, Vermont has about the same level of uninsurance, 10.5 percent compared with 10.8 percent. It also has a Republican governor paired with a Democratic Legislature. As in Massachusetts, negotiations were tough, and nearly broke down. The final product in both states should be more durable for representing a consensus across party lines and ideological divides.

Each plan is untested. It's unclear whether the chronic disease provisions will control costs, and whether healthy uninsured Vermonters will buy coverage. The questions in Massachusetts revolve around the cost and benefits of the new policies, and whether they will impose an onerous burden on those compelled to buy them. The new insurance policies will be rolled out at about the same time, and each state will be able to learn from the other's mistakes.

With the federal government deadlocked, Massachusetts and now Vermont have shown that states possess the imagination and the political ability to create solutions to the problem of the uninsured, which has become a national scandal. Activists around the country have been heartened by the Massachusetts precedent. In Michigan, Governor Jennifer Granholm has proposed a plan to cover 550,000 uninsured adults. The states are the laboratories of democracy, as Supreme Court Justice Louis Brandeis once said, and the test tubes are bubbling.