Vermont health insurance exchange
VT board lowers 2015 rate hikes, considers off-exchange plans
- By Louise Norris
- healthinsurance.org contributor
- October 16, 2014
How successful is Vermont Health Connect?
The exchange has been a mixed bag so far. In terms of percentage of eligible residents enrolled, they were 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 have struggled with technological glitches, some of which are on-going.
Improving the exchange
To address the web problems, Vermont Health Connect temporarily shut down its website for repairs in mid-September, and remains under construction in mid-October. But officials have clarified that the site will be back online and functional well in advance of the November 15 start to open enrollment. On the homepage, visitors are greeted with a screen advising them to utilize the call center instead (855-899-9600). The navigation tabs at the top of the screen still work, so residents can still obtain information from the website.
But for interactive tasks like enrollment (triggered by a qualifying event), life change events, or payments, the website cannot currently be used. In another setback for the exchange, however, officials forgot to turn off a scheduled email blast that sent out notices to 6,500 enrollees in early October, directing them to log on to the Vermont Health Connect website to pay their most recent premiums. This caused some understandable confusion, but the exchange has clarified that all of those members are also receiving paper invoices, and can pay their premiums by mail or over the phone.
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 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. The exchange reports that 50 percent of new enrollees have been utilizing the e-pay feature.
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 are 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 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.
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 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).
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.”
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.
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.
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 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, 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 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.
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 as well, and it’s unclear when the small business portion of the exchange website will be fully functional.
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 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.
Vermont health insurance exchange links
Vermont Health Connect