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Vermont and the ACA’s Medicaid expansion

Total enrollment 10% higher than in 2013

Vermont has fully embraced the Affordable Care Act (ACA), including the expansion of Medicaid. While the state’s uninsured rate is among the lowest in the country, Medicaid/CHIP enrollment was only 10% higher in 2021 than it had been in late 2013, before Medicaid expansion took effect.

ACA’s Medicaid eligibility expansion in Vermont

Although Vermont was quick to accept federal funding for Medicaid expansion as called for in the ACA, the state had already addressed the issue of health insurance for low-income residents, nearly two decades earlier.

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In 1995, the Vermont legislature authorized the creation of Vermont Health Access Plan (VHAP) and Dr. Dynasaur, which is still utilized to provide coverage to children and pregnant women. Dr. Dynasaur provided coverage to children with household incomes up to 300% of poverty, pregnant women with household incomes up to 200% of poverty, and for parents and guardians with incomes up to 185% of poverty.

VHAP provided coverage for other adults with household incomes up to 150% of poverty.

In addition, in 2006, the state created Catamount Health, which allowed residents with incomes up to 300% of poverty to purchase a Catamount plan (provided by either MVP Health or Blue Cross Blue Shield) at a subsidized rate.

As a result of Vermont’s early health care reform, the state’s uninsured rate in 2006 was 10.8% — far lower than the national average of 15.3%.

Catamount and VHAP were scheduled to end on December 31, 2013, with all the individuals they covered switching to either expanded Medicaid or a subsidized private plan through the exchange.  But because of Vermont Health Connect’s rocky rollout, then-Governor Shumlin extended Catamount and VHAP until March 31, 2014 for any residents who were still enrolled in those plans.

Medicaid eligible residents were able to begin submitting applications on October 1, 2013, with expanded Medicaid policies effective January 1, 2014.

Vermont has accepted federal Medicaid expansion

  • 177,688 – Number of Vermonters covered by Medicaid/CHIP as of May 2021
  • 16,607 – Increase in the number of Vermonters covered by Medicaid/CHIP fall 2013 to May 2021
  • 44% – Reduction in the uninsured rate from 2010 to 2019
  • 10% – Increase in total Medicaid/CHIP enrollment in Vermont since Medicaid expansion took effect

Medicaid enrollment growth in Vermont

Vermont’s Medicaid enrollment grew by 11% from late 2013 to mid-2016 (and had peaked in early 2016), but enrollment declined after that, likely due to the state’s improved eligibility verification process.

Throughout 2014 and 2015, technical problems with Vermont Health Connect, the state’s exchange, made it impossible to accurately verify eligibility when renewing Medicaid coverage. So the state obtained a waiver from the federal government that allowed them to automatically renew Medicaid coverage without verifying eligibility. But by 2016, the state was able to accurately verify eligibility for Medicaid and stopped automatically reenrolling people.

The state’s uninsured rate prior to ACA implementation was much lower than the national average — only 7.2% according to U.S. Census data. By 2014, it had fallen to 5%, and by 2016, it had dropped even lower, to 3.7% — only Massachusetts and Hawaii had lower uninsured rates at that point. The Covid-19 pandemic has triggered many job losses, and many non-elderly adults have lost health insurance across the U.S. While Vermont’s uninsured rate is second lowest in the nation, it reached 7% in May 2020.

Work requirement failed to advance in Vermont legislature

Vermont House Bill 823, introduced by three Republican lawmakers in February 2018, called for a work requirement for the state’s Medicaid program. Vermont’s governor, Phil Scott, who was elected in 2016, is a Republican. However, both chambers of the state’s legislature have strong Democratic majorities, and were unlikely to support a Medicaid work requirement. The bill failed to advance by the mid-March “crossover deadline” for moving to the Senate, and thus was not successful in the 2018 legislative session.

The Trump administration clarified in early 2018 that they will allow states to implement work requirements for Medicaid, and several states have either already received approval or have submitted waivers seeking approval for work requirements.

Vermont’s proposed legislation was less draconian than the bills that some other states have been considering. It would have required adults age 19-64 to work, go to school/job training, do community service, or be enrolled in substance abuse treatment for at least 80 hours per month in order to remain eligible for Medicaid. There would be an exemption for people caring for children up to age 12 and/or disabled adults (one caregiver per household), pregnant women, disabled or medically frail individuals, or people who can provide a valid reason for not being able to complete the work requirement in a given month.

People who fail to complete the work requirement in a given month would have a second chance the following month. If they failed to complete the work requirement in the second month, they would lose Medicaid coverage. Their coverage could be reinstated after they had completed the work requirement in a future month (some states have proposed lock-out periods of up to a full year if people fail to complete a work requirement; Vermont’s legislation would allow a person to reinstate coverage after as little as one month).

As a candidate for governor, Scott’s health care proposal included plans to reduce Medicaid administrative costs and work with the federal government to obtain a federal safety net for long-term care, and he committed to preserving Medicaid expansion in the state. But Scott has been noncommittal about the idea of a Medicaid work requirement, and his Secretary of Human Services, Al Gobeille, called the idea a “high hurdle,” but noted that the Scott administration was not ruling out the possibility of a Medicaid work requirement. The Green Mountain Daily reported in early 2018 that Scott had proposed cutting funding for the Department of Vermont Health Access (which oversees the state’s exchange), as well as the elimination of funding for a program that helps disabled residents hire home health aides who can help them with activities of daily living.

Who is eligible for Medicaid in Vermont?

Medicaid is available for these legally present Vermont residents:

  • Adults with incomes up to 138% of federal poverty level (FPL)
  • Children with household incomes up to 312% of FPL
  • Pregnant women with incomes up to 208% of FPL

Older adults or individuals who are blind or disabled may also qualify for Medicaid in Vermont. See the Medicaid for the Aged, Blind and Disabled (MABD) page on the Green Mountain Care website for more information.

How does Medicaid provide financial assistance to Medicare beneficiaries in Vermont?

Many Medicare beneficiaries receive Medicaid’s help with paying for Medicare premiums, affording prescription drug costs, and covering expenses not reimbursed by Medicare – such as long-term care.

Our guide to financial assistance for Medicare enrollees in Vermont includes overviews of these benefits, including Medicare Savings Programs, long-term care coverage, and eligibility guidelines for assistance.

How do I apply for Medicaid in Vermont?

Vermont’s Medicaid program is called Green Mountain Care, and the program for children and pregnant women is called Dr. Dynasaur. If you’re under 65 and don’t have Medicare, you can apply through the state-run exchange, Vermont Health Connect. If you’re 65 or older or have Medicare, use this website to apply for Medicaid.

If you have questions, you can call the Vermont Medicaid office for assistance at 1-800-250-8427.

All-payer model pilot program underway

Vermont has long been a vanguard when it comes to healthcare reform. And although the state abandoned their push for a single-payer system in late 2014, they moved forward with their plans for an all-payer model that would merge payments from Medicaid, Medicare, and commercial insurers, paying set rates to all providers in the state via what would essentially be one big accountable care organization.

In September 2016, Vermont received tentative approval from CMS for the waiver that would be needed to coordinate Medicare (which is a federal program) into the all-payer model. In 2017, the state began a pilot program in which 30,000 of Vermont’s 151,000 Medicaid enrollees were covered under the OneCare network of 2,000 providers, with the state paying $93 million to the network for the global care. In 2018, the state tested a program that includes Medicaid, Medicare, and commercially-insured patients, with nine of the state’s 14 hospitals participating in the OneCare program, providing care for about 120,000 Vermont residents. The All-Payer Accountable Care Organization Model Agreement is an arrangement from 2018-2022.

Medicaid spending drove budget shortfall; Eligibility redeterminations reduced Vermont Medicaid enrollment

Vermont’s budget was expected to have a $58.5 million shortfall in fiscal year (FY) 2017, which started in July 2016. That was the ninth year in a row that the state’s spending outpaced revenue, and the budget shortfall issue continued into FY 2019. In 2020, there was a hole of nearly $200 million in the year’s state budget, largely due to the COVID-19 pandemic. The federal coronavirus relief money attributed to a positive budget address from Governor Scott in January 2021.

About $53 million of the projected FY 2017 shortfall was attributed to Medicaid spending, and $36 million of the 2016 fiscal year’s $40 million shortfall was due to Medicaid spending. The federal government paid the full cost of expansion through the end of 2016, but the state had to begin paying 5% of the cost of covering the newly eligible population starting in 2017, and 6% in 2018. In addition, the outreach and enrollment efforts in every state have resulted in people enrolling for the first time in Medicaid despite the fact that they already qualified under the pre-ACA eligibility guidelines. For this population, the states are on the hook for their normal funding split with the federal government.

Former Governor Shumlin proposed a payroll tax in January 2015 (0.7%) to provide additional funding for Medicaid, but lawmakers balked at the idea.

In an effort to rein in spending, Vermont’s Medicaid program began going through eligibility redeterminations for existing enrollees starting in October 2015. Roughly a third of Vermont’s population was on Medicaid, and officials believed that some were not actually eligible for the coverage. The eligibility verifications have been ongoing since then, and the state has determined that some young adults had been incorrectly enrolled in Dr. Dynasaur rather than expanded Medicaid (which was fully funded by the federal government through 2016 and 94% funded by the federal government in 2018) or individual market coverage with subsidies through the exchange.

Eligibility redeterminations have played a key role in shrinking total Medicaid/CHIP enrollment back to nearly what it was before Medicaid expansion took effect. Total enrollment was only 1% higher at the end of 2017 than it had been at the end of 2013 (nationwide, it was up 29%). However, as of May 2021, enrollment is up 10% from 2013.

Vermont Medicaid enrollment numbers

According to Vermont Health Connect enrollment reports, total Medicaid enrollment (adult plus child) through the exchange was 131,993 in December 2014, and had increased to 141,173 by June 2015. Total Medicaid/CHIP enrollment in Vermont stood at 187,174 by August 2015.

As April 2014, Vermont Health Connect reported that 67,187 people were enrolled in the state’s expanded Medicaid program, although they noted that approximately 8,000 of those individuals had been previously enrolled in Medicaid and had renewed their coverage through Vermont Health Connect.

The exchange reported that more than 33,500 people were automatically transferred from one of the state’s pre-2014 subsidized health plans (Catamount and VHAP) to expanded Medicaid as of January 2014.

In all, 55% of Vermont Health Connect’s applicants qualified for Medicaid during the first open enrollment period (October 2013 to April 2014).

By the end of 2017, total Medicaid/CHIP enrollment in Vermont stood at 162,593, following more than a year of eligibility redeterminations to verify that everyone in the program was eligible to remain in it. This was only 1% higher than enrollment had been in late 2013, before Medicaid expansion took effect.

Total Vermont Medicaid enrollment (including CHIP) was 177,688 as of May 2021.

No single payer system, but reform still priority

Vermont was originally on a path towards a single-payer health care system starting in 2017, but they abandoned that effort in December 2014, citing higher-than-expected costs.

But the state continued to push forward with efforts to further reform its health care system and limit overall health care spending growth. In November 2015, state regulators briefed lawmakers on their plans for an all-payer model agreement with the federal government. The state wants to take control of Medicare in addition to Medicaid, and limit healthcare spending growth to 3.5% for the whole population of Vermont. In 2018, Vermont is testing their all-payer model with a network that includes nine of the state’s 14 hospitals (some are only participating with Medicaid patients) and about 120,000 patients.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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Apply for Medicaid in Vermont

Apply for Green Mountain Care and Dr. Dynasaur through Vermont Health Connect.

Eligibility: Adults with incomes up to 138% of FPL; children with household incomes up to 312% of FPL; pregnant women with incomes up to 208% of FPL.

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