Vermont health insurance exchange
VT board lowers 2015 rate hikes, considers off-exchange plans
- By Louise Norris
- healthinsurance.org contributor
- September 14, 2014
2015 open enrollment is just two months away, and Vermont Health Connect is gearing up for a strong second round of enrollments. 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 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 projected to be about 7.8 percent. Vermont Health Connect will post the final approved 2015 rates here by the end of September.
Current enrollees who have a 2014 plan through Vermont Health Connect will be 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 opting for automatic renewal. Rate changes can result in changes to subsidies if the price of the second-lowest-cost silver plan changes, so it’s possible that a different plan could represent a better value next year. Policy changes can be made anytime between November 15, 2014 and February 15, 2015.
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 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 has continued to grow in the months since open enrollment ended, just as it has all across the nation. 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)
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. 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 has impacted about 10,000 enrollees. The transition from CGI to Optum is explained in this August 4 press release from Vermont Health Connect.
For much of 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. The exchange reports that 50 percent of new enrollees have been utilizing the e-pay feature.
There have been some concerns about the fact that enrollment in the Vermont exchange is skewing older than the national average (62% over age 45 as of the beginning of February), but that makes sense given that Vermont’s population is older than the US average too, and given that plans in Vermont are community rated, so older enrollees pay the same amount as younger ones. Since Vermont is switching everyone to exchange-based health insurance, it’s reasonable to assume that the demographics in the exchange roughly mirror the demographics in the pre-ACA individual market (Medicaid is counted separately). Thus, premium trajectories in the exchange should not be much different than they would have been in the old individual market. The exchange reported that as of mid-March, 18 percent of their enrollees were between 18 and 30 years old, but that included both QHP and Medicaid enrollments so it’s difficult to predict how private plan rates will be impacted based on age demographics.
In April 2014, Vermont Commerce Secretary Lawrence Miller was appointed to oversee the state’s health care reform going forward and the eventual transition to the Green Mountain Care single payer system. There has been some tension between Governor Shumlin’s office and state lawmakers, and Director of Health Care Reform Robin Lunge made it clear to lawmakers in early April that they were asking for too many reports, too quickly.
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.
Vermont created a health benefit exchange to comply with the Affordable Care Act, but the state has 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. The state still has a long way to go before Green Mountain Care becomes a single-payer reality, and there will be many hurdles along the way. But if they’re successful, they will certainly be held up as an example for other progressive states to follow.
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, 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.
For now, Vermont has implemented a state-based exchange, Vermont Health Connect. The exchange was authorized by the state legislature and signed into law in 2012. Vermont used a 2012 federal grant of $104.2 million to design a technology system that will support the state-based health insurance exchange in the short-term and the single-payer system in the longer term. The state plans to transition to Green Mountain Care – providing universal coverage – in 2017.
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 are the fifth highest in the nation, 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.
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, 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.
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.
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 as well. Individuals still must purchase their policy through the exchange. Open enrollment for 2014 has ended, but residents who have a qualifying event can still purchase coverage during their special open enrollment period. Those without a qualifying event can purchase coverage beginning on November 15, that will become effective January 1, 2015.
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.
Vermont health insurance exchange links
Vermont Health Connect