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Vermont health insurance exchange / marketplace

18,000 renewals processed by mid-November, but change of circumstances backlog returns

  • By
  • contributor
  • January 19, 2016

Exchange once again backlogged

In 2014 and 2015, Vermont Health Connect struggled with technology problems that caused significant backlogs in the system. In May 2015, there was a backlog of more than ten thousand change of circumstance requests that needed to be processed – quite significant given that effectuated enrollments in June stood at just 33,306.

On October 1, Governor Peter Shumlin announced that Vermont Health Connect has made huge strides.  The change of circumstances backlog has been cleared (except for 186 cases that have been assigned to customer service representatives who were handling the cases and expected to have them completed by mid-October), and customers were able to begin using online reporting for many change of circumstances situations on Monday, October 5. It appeared that the exchange was heading into the third open enrollment period with a much improved system.

But on January 19, Vermont Public Radio reported that the backlog had returned, and was up to 3,000 people. The problem stemmed from the delayed delivery of a software upgrade for the plan renewal process. It was supposed to be ready in December, but as of mid-January it had not yet been implemented. The exchange noted that they expected it to be ready “within weeks” and said that the problems surrounding the 2016 renewal process shouldn’t reoccur in future years. They also explained that the current technology problems were also related to larger-than-normal number of Medicaid reenrollments being processed, and the fact that an exchange contractor went out of business last year.

Vermont Health Connect has provided only one enrollment update for 2016, announcing on November 17, 2015 that the exchange had processed 18,000 renewals by that point. But they have not provided any additional renewal details in the ensuing two months, nor have they said how many new enrollees have signed up for 2016. At ACAsignups, Charles Gaba – who very much supports the ACA – has questioned whether it might be time for Vermont to consider the possibility of switching to, at least for the technology side of the exchange (this is what Oregon, Nevada, and Hawaii did after struggling with their own enrollment platforms).

Initial optimism for technology improvements

The change of circumstances backlog was among the most vexing problems for Vermont Health Connect, and the new system that was put in place in 2015 appeared to be a significant upgrade over the manual work-arounds the exchange had been using for the past two years. Shumlin noted that the exchange receives about 125 change of circumstances submissions per day, but staff members had been able to keep up with new submissions while also dealing with the backlog over the summer.

When the Governor announced that the backlog had been cleared in the fall of 2015, he noted that going forward, enrollees who submit a change of circumstances request by the 15th of the month would see the changes reflected on their next invoice.

The carriers that offer plans through Vermont Health Connect – Blue Cross Blue Shield of Vermont, MVP Health Care, and Delta Dental – expressed optimism regarding the exchange’s technology upgrades, and have “worked closely with the health insurance marketplace to integrate the new technology.”

But in January, Blue Cross Blue Shield of Vermont – the largest carrier in the state – explained that the technology problems that had returned during open enrollment (related to processing renewals) had made it impossible for the carrier to process changes to BCBS enrollees’ plans.

18,000 renewals processed by mid-November

On November 17, Governor Peter Shumlin announced that the renewal process for 2016 had been completed for more than 18,000 people during the first two weeks of open enrollment. Last year, it took Vermont Health Connect until the end of January to complete 18,000 renewals.

The exchange had roughly 30,000 enrollees in 2015, so they had renewed more than half of them by mid-November. At that point, they were predicting that they would have all the renewals processed by the end of November. But this was for the auto-renewal process, keeping enrollees in the same plan for 2016 that they have in 2015. Enrollees also have the option of returning to the exchange by December 15 and selecting a different plan for the coming year, with a January 1 effective date.

It’s not clear the exact nature of the glitch that has caused the current backlog of 3,000 enrollees, but it’s related to plan or circumstance changes and the renewal process, so presumably it has to do with people who wished to make a change to their coverage during open enrollment.

Plan changes can be made anytime until January 31, Enrollments completed between January 16 and January 31 will have coverage effective March 1.

Silver especially valuable in Vermont

In every state, the Affordable Care Act includes a provision to lower out-of-pocket costs for people who qualify based on household income (no more than 250 percent of the poverty level), and who select a silver plan through the exchange. But in Vermont, cost-sharing reductions are also funded by the state. Thanks to the combination of state and federal funding, cost-sharing reductions are available to Vermont Health Connect enrollees with incomes up to 300 percent of the poverty level, as long as they select a silver plan.

In early 2015, there were concerns that the budget proposal for Fiscal Year 2016 wouldn’t include state funds for cost-sharing reductions past the end of 2015. But in June 2015, Governor Shumlin signed Senate Bill 139 into law (Act 54). The Act provides funding (about $761,000) to maintain the additional cost-sharing reductions provided by the state of Vermont in Fiscal Year 2016.

In Vermont, cost-sharing reductions are the same as other states for people with incomes up to 200 percent of the poverty level. But the state provides additional cost-sharing reductions (on top of what’s covered by federal funds) for people with incomes between 200 and 250 percent of the poverty level, and also provides some cost-sharing reductions for people with incomes between 250 and 300 percent of the poverty level (that group doesn’t get federal cost-sharing reductions at all).

Regulators get 2016 rate hikes down to 5.5%

In Vermont, regulators approved a 5.5 percent weighted average rate increase for the individual market for 2016. The two exchange carriers submitted proposed 2016 rates with a weighted average rate increase of 7.75 percent (8.06 percent for the small group market), but regulators reduced the rate hikes before finalizing them:

  • BCBS of Vermont had proposed an average rate increase of 8.6 percent, which regulators reduced to 5.9 percent
  • MVP had proposed an average rate increase of 3 percent, which regulators reduced to 2.4 percent.
  • Vermont does not allow the sale of off-exchange plans, so those two carriers represent the full individual market in Vermont.

This marks the second year in a row that Vermont has approved rates lower than proposed for both carriers.  And although the Green Mountain Care Board was able to reduce the proposed rate hikes during the review process, supporters of Vermont’s push for a single payer system were quick to note that a rate increase of nearly six percent is not commensurate with the much smaller income increases that people are likely to get in the coming year.  Although 64 percent of Vermont exchange customers receive premium tax credits (subsidies) to offset their premiums, the other 35 percent must bear the full brunt of the rate increases for 2016. And although Vermont abandoned it’s progress towards a single payer system at the end of 2014, many proponents are pushing to resurrect it.

Kaiser Family Foundation reported that the benchmark (second lowest-cost silver) plan premium in Burlington would be 7.3 percent higher in 2016 than it was in 2015. Benchmark premiums don’t tell the whole story of how rates are changing, but they do give us an idea of how subsidies in the area will change, since subsidies are tied to the cost of the benchmark plan.

In June 2015, the exchange announced that five navigator organizations would receive grants to fund the enrollment assistance process from July 1, 2015 through June 30, 2016, including the 2016 open enrollment period that began November 1.


Cancellations notices may be erroneous

In November, some Vermont Health Connect enrollees received plan cancellations notices explaining that their coverage was being terminated for non-payment of premiums. This was despite the fact that the consumers insisted they had paid their premiums on time. The exchange has explained that the problem occurs when people pay their bills very late in the month, and the exchange will get their coverage re-instated if it turns out that the premium payment was indeed received before the end of the grace period.

There’s a three month grace period for people who are receiving premium subsidies, but only a one-month grace period for people who aren’t receiving premium subsidies. If you’ve received a cancellation notice and you believe you paid your bill on time, contact the exchange to notify them of the discrepancy.

2014 audits

In November 2015, Vermont Health Connect officials responded to the results of two audits that were critical of the exchange. One was conducted in 2014 by Grant Thornton, a national firm. The other was conducted by Vermont State Auditor Doug Hoffer’s office.

Exchange officials noted that many of the problems revealed in the 2014 audit had since been resolved, although they explained that there are ongoing issues that they’re still addressing, specifically the need to have written procedures in place for various exchange functions. Hoffer’s audit found security risks in the exchange, and although officials are working to resolve them, they noted that they’re within the parameters allowed by the federal government.

Governor’s ultimatum

In a March 2015 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.

On June 1, Gov. Shumlin announced that the exchange had met the first deadline successfully.  Change-of-circumstances adjustments to accounts could be made automatically, albeit only by exchange staff.  At that point, the goal was to have online change-of-circumstances updates available to the public by October – a target that was successfully met. But throughout the summer, staff were able to make requested changes to customer accounts automatically.  The first order of business was to tackle the 10,000 backlogged cases that needed adjustments, and staff worked throughout the summer to address them using the new automated functionality. By mid-August, the backlog had dropped to 4,200, and Governor Shumlin noted at the time that he was “cautiously optimistic” that the backlog would be fully cleared by the time open enrollment began in November. Shumlin’s October 1 announcement confirmed that they had successfully dealt with the backlog (although it has returned in early 2016 due to a delayed software upgrade).

But the fix came with a price tag.  Vermont Health Connect had anticipated federal funds to cover 90 percent of the cost of the system upgrade, but found out in August that the federal government would only pay 55 percent of the bill.  That means the state may have to pay up to $2.7 million more than expected for the software updates that were completed in the first part of 2015.

In August, Vermont officials announced that the exchange would pay BCBS of Vermont $1.6 million because of the technological problems with Vermont Health Connect in 2014 that resulted in past-due premiums and the carrier paying claims that shouldn’t have been paid. That sum covers the errors that occurred between October 2013 and December 2014, although an additional payment may be necessary once the data for 2015 is reconciled.

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

By February 15, 2015, 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 included:

  • 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 were 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 plans must be purchased through the exchange – there are no off-exchange plans for sale in Vermont, although lawmakers introduced a bill in 2015 to change that (it didn’t advance).

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.

By the end of March, total effectuated private plan enrollment in Vermont Health Connect stood at 34,923, and that number had fallen to 33,306 by June 30. Attrition is a normal part of the individual health insurance market, particularly when the bulk of enrollments are confined to one quarter of the year.

Until early January 2015, 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 began reporting Medicaid enrollments separately in early 2015.

2015 premiums and renewals

Two health insurance carriers – Blue Cross Blue Shield of Vermont and MVP Health Care – offered nine plans each in Vermont Health Connect in 2015. 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 September 2014, 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 weighted average rate increase for 2015 was about 7.8 percent, owing largely to BCBSVT’s significant market share.

The average rate increase for the benchmark plan (second-lowest-cost silver plan) in Vermont was 8.3 percent in 2015.

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, stepped down from the Shumlin Administration in March 2015. 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.

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 2014, 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 2015 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, 2014, 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 2014, 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.

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 enrolled such a high percentage of eligible residents in 2014. 

In August 2014, the state’s Chief of Health Care Reform, Lawrence Miller, explained that they were 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 in other states, 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.

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, 2014 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.

No grandmothered plans in Vermont

Vermont’s 2012 Act 171 required that all non-grandfathered 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 January 2015, the state legislature voted for Shumlin, and he began his third two-year term as governor.

Vermont Health Connect history

Vermont 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-2014, the exchange had spent about $72 million of that money, leaving them with about $100 million to work with as they headed 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, 2014 and members needed to transition to Vermont Health Connect by March 15 in order to have new coverage as of April 1.  There was concern that the new plans – even with heavily subsidized premiums – are 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, 2014, 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 confirmed that small businesses would continue to be allowed to purchase insurance directly from carriers for 2015 plans. By early 2016, that was still the case.

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 September 2014 that it would be launching an improved web portal on October 15 where groups would be able to 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.

Vermont health insurance exchange links

Vermont Health Connect

Vermont Health Care Reform