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Vermont health insurance exchange / marketplace

Legislative committee meeting over the summer to consider future of Vermont's exchange

Vermont exchange making progress

In a March update about Vermont Health Connect, Governor Shumlin didn’t mince words: the exchange would solve their technological problems on a tight deadline, or else other options would be pursued – including a switch to or the possibility of piggy-backing on Connecticut’s successful exchange.

Shumlin’s administration announced a timeline for improving the exchange:  By the end of May, technology must be in place to “significantly reduce” the amount of time it takes to complete account changes (things like an address change, adding or removing a dependent, cancelling coverage, etc.).

And by October, improvements must be finalized to allow for smooth plan renewals heading into the 2016 open enrollment period that starts on November 1.  Although the exchange and Shumlin’s office were confident that the technology improvements would be completed on time, they made it clear that if they aren’t, they will begin the process of transitioning to

On June 1, Gov. Shumlin announced that the exchange had met the first deadline successfully.  Change-of-circumstances adjustments to accounts can now be made automatically, albeit only by exchange staff.  The exchange is hoping to have online change-of-circumstances updates available to the public by October, but for now, staff can make requested changes to customer accounts automatically.  The first order of business is to tackle the 10,000 backlogged cases that need adjustments, and staff will be spending the next few months using the new automated functionality to address those issues.

But transition to still possible

The exchange still has a long way to go, and a switch to is not entirely off the table yet.  In late June, the Supreme Court upheld the legality of subsidies in the federally-run exchange, which eliminates one of the obstacles that previously prevented states from handing their exchanges over to the federal government.  And the 11-member Vermont House Committee on Health Care is scheduled to meet several times over the next few months to determine how successful the exchange’s improvements have been so far, and to consider other alternatives to the current Vermont Health Connect model.

The committee will get updates from the Administration officials who oversee the exchange, in addition to feedback from the carriers that offer coverage in the exchange.  House Speaker Shap Smith said the Committee has three areas to address with regards to the exchange: “One, is it working? Two, if it isn’t working, what are the alternatives? And three, how can we make sure that it’s financially sustainable?

The Committee was waiting until the ruling was announced in King v. Burwell before convening their meetings, since the alternative of switching to a federally-run exchange wouldn’t have been viable if subsidies had been eliminated in the federally-run exchange.  The fact that subsidies are no longer in jeopardy in the federally-run exchange has brought renewed calls for Vermont to abandon its state-run exchange, but the Governor and exchange administration have said that it’s premature to pull the plug on the state-run exchange, since progress is being made.

2016 rates

In Vermont, the two exchange carriers have submitted proposed 2016 rates with a weighted average rate increase of 7.75 percent (8.06 percent for the small group market).  There’s a wide variation in the proposed rates, including a 27.3 percent rate increase from MVP for catastrophic plans.  But only 149 people have those plans, which is why the weighted average ends up being so much lower.  The proposed rates have not yet been finalized; last year, the final rates for both carriers ended up being lower than the proposed rates, and that could very well be the case again this year.

Tax season special enrollment period

Vermont Health Connect offered a special enrollment period for people who didn’t know they’d have to pay a penalty for being uninsured in 2014, and found out about the penalty when they filed their tax return.  At that point, they had 60 days to complete an enrollment for 2015, although the final deadline for the special enrollment period was May 31.

Now that open enrollment and the tax season special enrollment period have ended, enrollment for most people is contingent on having a qualifying event.  But Native Americans and Medicaid-eligible residents can enroll year-round.

96.3 percent of Vermont residents insured

In 2012, Vermont’s uninsured rate was 6.8 percent – far lower than the national average, but Governor Shumlin knew the state could do better.  Although Shumlin’s administration pulled back last month from their push for single-payer coverage in the state, they’ve come very close to achieving universal coverage.  The uninsured rate in Vermont is now just 3.7 percent – the second-lowest rate in the country.  Only Massachusetts, which implemented healthcare reform several years ahead of the rest of the country, has a lower uninsured rate.

Only 1 percent of Vermont’s children are without health insurance, which is the lowest in the nation.

2015 enrollment numbers

15,422 individuals have checked out a 2015 health plan. This includes 6,211 individuals in Qualified Health Plans (private health insurance) and 9,211 individuals in Medicaid or Dr. Dynasaur plans. After a new customer checks out a plan, they must make an initial premium payment and have their selection processed before they have an active health plan. Of the 15,422 individuals who checked out, 11,704 have completed the enrollment process and have an active health plan (i.e., effectuated enrollment). Of those who completed the process, 3,471 are on a Qualified Health Plan and 8,233 are on Medicaid or Dr. Dynasaur.

29,858 individuals have been checked out into 2015 health plans. This includes 25,341 individuals on Qualified Health Plans and 4,517 individuals on Medicaid or Dr. Dynasaur plans. Of the 29,858 individuals whose plans have been checked out, 24,211 have had their renewal completely processed. Of the 24,211, 20,442 are on a Qualified Health Plan and 3,769 are on Medicaid or Dr. Dynasaur.

By the end of the day on February 15, Vermont Health Connect had 45,280 total enrollees for 2015, including private plans and Medicaid.  This was an increase of nearly five thousand people since February 9, and includes:

  • 6,211 new private plan enrollees (3,471 had paid for their plan already)
  • 25,341 private plan renewals (20,442 had paid for their plan already)
  • 9,211 new Medicaid/Dr. Dynasaur enrollees
  • 4,517 Medicaid/Dr. Dynasaur renewals

Of the 31,552 enrollees in private plans, 75.7 percent (23,913 people) had paid for their coverage as of February 15.  And of the people who had completed their enrollments by February 21, 62 percent are receiving premium subsidies.  This is much lower than the percentage in most states, but Vermont is one of only two exchanges (DC is the other) where all new plans must be purchased through the exchange – there are no off-exchange plans for sale in Vermont, although a bill currently in the legislature would change that.

Officials had predicted somewhere between 3,000 and 8,000 new enrollees in Vermont for the entire open enrollment period.  With 6,211 new private plan enrollments, the exchange clearly met their target.

Until early January, Vermont Health Connect had been lumping their Medicaid enrollments in with private plan enrollments rather than separating them out the way most states do.  This caused some discrepancies between the state reports and the HHS report, but Vermont has been reporting Medicaid enrollments separately for the last few weeks.

Vermont was one of four states where plans could be selected on New Year’s Eve and coverage was effective January 1.  If you enroll between now and February 15, your coverage will be effective March 1.  After February 15, you won’t be able to get a 2015 plan unless you have a qualifying event later in the year.

2015 premiums and renewals

Two health insurance carriers – Blue Cross Blue Shield of Vermont and MVP Health Care – are offering nine plans each in Vermont Health Connect.  Rates in Vermont’s exchange were the fifth highest in the nation in 2014, due in part to the low number of carriers participating, and also to the fact that Vermont has the second-oldest population in the country and utilizes community rating, with no variation in premiums based on age.

In early September, the Green Mountain Care Board made reductions to the proposed rate increases for both of the carriers that participate in the state’s exchange.  BCBSVT (which covers more than 90 percent of the exchange’s enrollees) had submitted 2015 rates with an average increase of 9.8 percent, and the board cut that down to 7.7 percent.  MVP Health Care had proposed a rate increase of 15.3 percent, which was reduced to 10.9 percent during the review process.  The vast majority (about 97 percent) of the plans sold so far have been from BCBSVT, so the weighted average rate increase for 2015 is about 7.8 percent.

Enrollees who had a 2014 plan through Vermont Health Connect were able to automatically renew their coverage and applicable subsidy into 2015.  But it’s recommended that enrollees take some time to compare the 2015 plans before the end of open enrollment (February 15).  The average rate increase for the benchmark plan (second-lowest-cost silver plan) in Vermont is 8.3 percent, regardless of whether people switch carriers or not, but it’s possible that a different plan could represent a better value for 2015 than the one you had in 2014.

Policy changes can be made anytime through February 15, 2015.

Scaling down call centers

Because the bulk of Vermont Health Connect’s 2015 enrollment was expected to be renewals that needed to be processed before the end of 2014, the exchange had ramped up staffing at their off-site call centers in the early part of open enrollment.  But they started closing or scaling down those call centers once the renewals were mostly processed, and officials had announced that the total number of call center employees would be reduced to about 30 (down from 110) by the end of December 2014.

The Concord call center remained open throughout open enrollment – the Vermont Health Connect call centers that have closed were located in other states around the country.

New leadership

Mark Larson, Commissioner of the Department of Vermont Health Access (DVHS), and the person who oversaw the roll-out of Vermont Health Connect in 2013, is stepping down from the Shumlin Administration in March.  DVHS oversees Vermont Health Connect, along with other Vermont health programs.  Governor Shumlin announced on February 9 that he had selected Rhode Island’s former Secretary of HHS and lawmaker, Steven Costantino, to be the new Commissioner of DVHS.

Lawrence Miller had been in charge of daily operations at Vermont Health Connect, but Vermont’s Human Services Secretary, Harry Chen, took over that role in January so that Miller could work more closely with the legislature.  Miller’s official capacity is Chief of Health Care Reform, so his time is devoted to legislation while lawmakers are in session.

How successful is Vermont Health Connect?

The exchange was a mixed bag in 2014.  In terms of percentage of eligible residents enrolled, Vermont was by far the leader nationwide during the 2014 open enrollment (although this victory can be partially attributed to the fact that there were no 2014 off-exchange enrollments allowed in Vermont).  But they also struggled with technological glitches and shut down the exchange website for much of the fall.

Despite intensive technology fixes last fall, there are still technological glitches that the exchange is working through.  And there have been concerns that the exchange was inefficient with money and human resources during the process of renewing coverage for 25,000 enrollees in the first month of the 2015 open enrollment period.

Costs higher than anticipated

For the 2015 fiscal year that runs through June, Vermont Health Connect is expected to cost $9.7 million more than originally projected.  The overage mostly stems from switching vendors and all of the manual processing that has been necessary in order to keep the exchange functional when its automated systems weren’t working.

$3.5 million of the additional funding is expected to come from Vermont’s general fund, but the rest will be picked up by the federal government via grants and Medicaid funding.

Improving the exchange

To address the web problems that the exchange experienced in 2014, Vermont Health Connect temporarily shut down its website for repairs in mid-September, and it remained off-line for two months.  During that time, interactive tasks like enrollment (triggered by a qualifying event) and payments could not be processed through the website (visitors had to contact the call center instead).

The problems were mostly resolved and the exchange website was up and running again as of November 15, just in time for the second open enrollment period.

For much of the first open enrollment, premiums could not be processed online and instead had to be sent by mail.  That was eventually resolved and starting on March 3, online payment became available through Vermont Health Connect.  50 percent of new enrollees were using the e-pay feature after it became available.

In early June, Vermont Health Connect hired IT contractor Optum to help with the “change of circumstances” backlog stemming from a flaw in the exchange website.  The transition from CGI to Optum is explained in this August 4 press release from Vermont Health Connect.

The exchange will need to enter into a new contract with Optum in 2015, and it’s likely that the contract will be on more favorable terms for the exchange, since they won’t be in such a dire circumstance this time around.

But leftover glitches persist

Although things appear to be working well in terms of new enrollments and renewals for 2015, there are lingering problems caused by the glitches the system experienced in 2014.  Not all of the backlogged change in circumstances requests have been processed (5,300 unprocessed 2014 change requests were still in the system as of mid-November, and that number had grown to 10,000 by May 2015), and there are also on-going issues with the billing system from 2014.

The problems resulted in some enrollees receiving collections warning notices from MVP Health Care, in some cases for several thousand dollars.  Some of these enrollees may have submitted a cancellation request months ago, because those are among the backlogged change requests that the exchange is still processing.  MVP has said that they are not proceeding with sending the accounts to collections if there’s any doubt that there could be an error causing the past-due premium notices.

Enrollees have not been able to utilize the exchange site to notify carriers of a life change such as birth, divorce, marriage, change in income, etc., and the problem impacted about 10,000 enrollees.  More than half of those backlogged change requests had yet to be processed at the start of the second open enrollment period, and manual updates were necessary until the end of May.  The manual coverage change process is the same one that had to be used for 2014 enrollees who wanted to switch to a new plan in 2015.  But now that the change in circumstances system has been automated (at least for exchange staff), the exchange should be able to work through the backlog before the start of the 2016 open enrollment period in November.

Tax forms

By now, all Vermont Health Connect private plan enrollees should have received a form 1095-A.  If you haven’t received yours yet, contact the exchange at 855-899-9600.  If you’re enrolled in Medicaid through the exchange, you won’t get a form 1095-A.

Because there is still a backlog change-of-circumstance forms that are being processed, it’s possible that some Vermont Health Connect enrollees received incorrect forms 1095-A from the exchange (the 1095-A is the form that exchanges sent to enrollees and the IRS with coverage, premium and subsidy information).  Vermont Health Connect has clarified that corrected forms 1095-A will be sent to enrollees in that situation.  If you feel like the information on your 1095-A was incorrect, contact the exchange to make sure they’re sending you a corrected version.

2014 enrollment numbers

At the end of the 2014 open enrollment period, Vermont was the clear leader in terms of the percentage of eligible residents who had enrolled in the exchange (85%; 38,048 people had completed their private plan Obamacare enrollments in the Vermont exchange by April 19.  An additional 41,704 were eligible for Medicaid by that date).  

This is more than double the second place state (California, with 42%), but Vermont is the only state (other than the District of Columbia) that has required everyone to enroll through the exchange, with no off-exchange plans available, so it’s understandable that the exchange has enrolled such a high percentage of eligible residents. 

In early August, the state’s Chief of Health Care Reform, Lawrence Miller, explained that they are considering the possibility of direct-to-carrier enrollment for people who don’t qualify for subsidies, but noted that adding this option is “not as simple as flipping on a switch” and cautioned that people who enroll in plans outside the exchange are locked out of subsidies for the whole year unless they have a qualifying event, even if their income drops mid-year.  This is certainly a valid point, and has been an issue in 2014 for people in other states who enrolled in off-exchange plans.

Thanks to qualifying events and special open enrollment periods, exchange enrollment in Vermont continued to grow after the 2014 open enrollment period ended.  As of mid-June, Vermont Health Connect was reporting an average enrollment of 38 people per day, about 28% of what they were enrolling during regular open enrollment (about 135 per day).

By the end of July, Vermont Health Connect had enrolled 66,600 people in private plans, including individual and small business (SHOP) policies (there is no open enrollment for small businesses – companies can purchase SHOP plans year-round, but Vermont’s SHOP exchange isn’t yet operable online, so the coverage is purchased directly through the health insurance carriers).

According to Kaiser’s State Health Facts, 9 percent of Vermonters were uninsured in 2013; that’s about 56,340 people.  Vermont’s report for 2014 won’t be out until early in 2015, so it will be several months before we know how much the first open enrollment period has impacted the percentage of Vermont residents who are uninsured.


A federal audit of Vermont Health Connect in June found thousands of inconsistencies in income, citizenship data, and Social Security numbers.  Political leaders differed on their reactions to the audit, but both sides agree that the exchange needed to be fine-tuned before the 2015 open enrollment period.  In late August, the state auditor’s office announced that they would be conducting a review to determine how well Vermont Health Connect is fixing the shortcomings it had in 2014.  

In October, another upcoming audit – the program integrity audit – was announced.  It is scheduled to begin January 3, and results will be released in March 2015.  While previous audits have focused mainly on technological aspects of the site, this upcoming audit will address every aspect of the exchange, “everything from the quality of the advice from the people manning the call center to the adequacy of the security systems that protect consumers’ data.”

It was announced in early February that there are also concerns that some Medicaid enrollees in Vermont may have qualified for coverage despite having incomes above the eligibility threshold.  This is an ongoing issue, and officials expect some Medicaid enrollees to be bumped out of the program when eligibility is redetermined.

Single payer no longer on the table for 2017

Vermont created a health benefit exchange to comply with the Affordable Care Act, but the state had plans to go well beyond that. A 2011 state law envisions Vermont with a single-payer health care system as soon as 2017, although reports surfaced in April of a memo from consultant Ken Thorpe (hired by the Vermont legislature to help them wade through the ins and outs of creating the single-payer system) regarding the possibility of a less-robust system that would let people purchase supplemental coverage through private plans in the exchange rather than relying solely on a single-payer model.

But after four years of working towards the single payer goal, Governor Shumlin announced on December 17 that the “time is not right” to continue to pursue a single payer system for Vermont.  Although Shumlin had pushed for single payer harder than just about any high ranking elected official, it ultimately came down to money, and there was just no way that Vermont could afford the switch to single payer for now.  It would have come with payroll taxes about 11.5 percent higher than they are now, and income taxes about 9 percent higher.  Not surprisingly, reactions were mixed after Shumlin’s announcement, with single payer advocates deeply disappointed in the decision, while other groups welcomed the news.

For the time being, it’s not clear if or when Vermont will re-examine the issue of single payer healthcare.

Vermont’s 2012 Act 171 required that all existing individual and small group policies terminate at the end of 2013 and be replaced with ACA compliant plans.  Unfortunately, Vermont’s exchange was plagued with technological difficulties and was still not operational as of the beginning of November 2013, a full month into open enrollment.  As a result, Governor Shumlin opted at the end of October to utilize a contingency plan that was built into Act 171, allowing for existing policies to be extended into 2014 in order to avoid lapses in coverage.  The Governor allowed existing individual and small group policies to be extended until March 31, 2014, and residents had until that time to enroll in a policy through Vermont Health Connect.

In November 2014, Governor Shumlin won the popular vote over Republican Scott Milne by roughly 2,400 votes.  But neither candidate received over 50 percent of the vote, so the final decision was left to the state legislature.  In early January, the state legislature voted for Shumlin, and he began his third two-year term as governor.

Vermont Health Connect history

Vermont has received $172 million in four federal grants designated for creation and implementation of the exchange as well as outreach efforts to get as many people enrolled a possible.  Vermont received more federal funds for its exchange than any other state.  As of mid-June 2014, the exchange had spent about $72 million of that money, leaving them with about $100 million to work with as they head into the 2015 open enrollment period.

Vermont Health Connect was authorized by the state legislature and signed into law by Governor Shumlin in 2012. Vermont used a 2012 federal grant of $104.2 million to design a technology system that supports the state-based health insurance exchange (and would have transitioned to single payer in 2017 had the state continued on that path).

Vermont’s health insurance assistance programs VHAP and Catamount ended on March 31, and members needed to transition to Vermont Health Connect by March 15 in order to have new coverage as of April 1.  There is concern that the new plans – even if the premiums are heavily subsidized – will be unaffordable for many VHAP and Catamount members, since the out of pocket costs on the new plans are significantly higher.

Coverage for small businesses

Vermont had intended for all new individual and small group policies to be purchased through the exchange beginning in 2014, but on January 14, the state announced that small businesses that had not yet purchased their plan through the exchange could buy one directly through Blue Cross Blue Shield of Vermont or MVP Health Care.  The state has confirmed that small businesses will continue to be allowed to purchase insurance directly from carriers for 2015 plans.

Blue Cross Blue Shield of Vermont covers 3,500 groups through Vermont Health Connect – about 96 percent of the exchange’s small business volume – and announced in late September that it would be launching an improved web portal on October 15 where groups can update and change their Vermont Health Connect policies.  If employers allow it, the Blue Cross portal will let employees choose from the full suite of Blue Cross small group plans.

Individuals still must purchase their policy through the exchange, although that may change in the future.  Open enrollment continues until February 15, after which people will only be able to purchase 2015 coverage if they have a qualifying event later in the year.

Vermont health insurance exchange links

Vermont Health Connect

Vermont Health Care Reform