Vermont health insurance

Two insurers are offering individual-market health plans in the state. COVID-19 special enrollment period extended through August 14, 2020

Huntington, VT | by Jason Pelletier

Health insurance in Vermont

Vermont’s health marketplace

State legislative efforts to preserve or strengthen provisions of the Affordable Care Act

Vermont is one of the states fighting the hardest to preserve the Affordable Care Act’s gains. See the steps Massachusetts has taken.

Vermont has a state-run health insurance exchange, Vermont Health Connect and has long been a health reform pioneer. Vermont had planned to convert to a single-payer system in 2017, but abandoned that plan in late 2014. Lawmakers in the state’s legislature have recently renewed the push for a single-payer system, with H.129, introduced in 2019, and H.860, introduced in 2020. The 2019 bill didn’t make it out of committee. The 2020 bill, which calls for Vermont to have a single-payer system by 2024, was still in committee as of June.

Vermont’s individual market – despite being small – is more stable than most states’ markets, due in large part to the fact that Vermont merged its individual and small-group markets into one insurance pool. (This option is available to all states, but most have rejected it.)

Vermont has an individual mandate as of 2020, requiring residents to maintain minimum essential coverage. But the state has not yet established any sort of penalty for non-compliance (so the mandate is essentially the same as the federal individual mandate, which no longer has a penalty for non-compliance).

Open enrollment in Vermont follows the federal schedule of November 1 to December 15. Enrollment outside of open enrollment requires a qualifying event. But in 2020, to address the COVID-19 pandemic, Vermont Health Connect has opened up a special enrollment period for uninsured residents who don’t have qualifying events and would not otherwise be able to enroll. The enrollment window has been extended through August 14, 2020. Medicaid enrollment continues year-round, and eligible enrollees do not need a qualifying event. People who do have qualifying events that allow them to enroll in a private marketplace (or off-exchange) plan can do so whenever their qualifying event occurs.

Two insurers offer plans in Vermont’s individual market: MVP and Blue Cross Blue Shield of Vermont. Both insurers also offer plans that can be purchased directly, instead of via the exchange, for people who don’t qualify for premium subsidies (subsidies are only available if the plan is purchased via the exchange).

As of early 2020, there were 33,982 people enrolled in Vermont’s individual insurance market, including on-exchange enrollments and direct-to-carrier enrollments. In addition, there were 42,520 people with employer-sponsored small group coverage in the state.

Read our full overview of the Vermont health insurance marketplace.

Plans for all-payer system

Vermont had initially planned to implement a single-payer system, but those plans were abandoned in late 2014 amid cost concerns. But the Green Mountain Care Board voted in 2016 to sign the All-Payer Model Agreement.

This agreement between the State of Vermont and the Centers for Medicare and Medicaid Services is designed to transition the state’s health plans away from fee-for-service reimbursement and incentivize doctors who keep people healthy – something former Governor Peter Shumlin said made Vermont the first in America to do so.

In 2017, the state began piloting the all-payer model, OneCare, with 2,000 providers and 30,000 Medicaid patients. In 2018, the all-payer model was expanded to include nine of the state’s 14 hospitals (some are only partially participating, with Medicaid patients only), and OneCare provided care to roughly 120,000 patients in 2018. By 2019, that number had grown to 175,000 Vermonters. Details and updates about the state’s all-payer program are available here; the first annual report for the All-Payer Model, for 2018, is available here.

Vermont Medicaid/CHIP enrollment

Utilizing federal funds to expand Medicaid eligibility to 138 percent of poverty has played a role in Obamacare’s success in Vermont. But the state has worked to implement accurate eligibility redetermination processes since 2016, to ensure that people are enrolled in the correct coverage. As a result, total Medicaid/CHIP enrollment in Vermont was 7 percent lower in late 2019 than it had been in late 2013 (as opposed to an average increase of 26 percent nationwide).

Read more about Medicaid expansion in Vermont.

Short-term health insurance in Vermont

Although Vermont does not prohibit short-term plans, the state’s benefit mandates and the requirement that plans cover pre-existing conditions make Vermont’s short-term market unappealing for insurers. As a result, no insurer is currently selling short-term plans in the state.

Read more about short-term health insurance in Vermont.

How has Obamacare helped Vermont?

In 2013, about 7.2 percent of Vermont residents did not have health insurance – far lower than the national average and the fourth-lowest rate in the country.

By 2016, with just 3.7 percent of its population uninsured, Vermont had cut its already-low uninsured rate nearly in half. The uninsured rate crept a little higher in 2017, to 4.6 percent (nationwide there was also a slight uptick in the uninsured rate in 2017, after President Trump took office), but it dropped down to 4 percent by 2018 (nationwide, the uninsured rate increased again in 2018, but Vermont avoided that trend).

Vermont and the Affordable Care Act

Vermont’s Congressional delegation is fully supportive of the ACA. Senators Patrick Leahy and Representative Peter Welch are both Democrats, and although Senator Bernie Sanders is an Independent, he caucuses with the Democrats and has long been in favor of expanding on the ACA with a Medicare for All proposal (during both of his presidential campaigns, Sanders has officially become a Democrat).

Former Gov. Peter Shumlin was not only supportive of the ACA, he was also the first governor in the country to actively pursue the clause in the law that allows states to take it one step further and eventually implement a state-based single-payer system. Green Mountain Care was set to begin as early as 2017, but the state abandoned its progress toward a single-payer system at the end of 2014 – though, it still has its proponents and legislation has been introduced in 2019 and 2020 to revive the idea.

In 2016, with Shumlin term-limited, a new governor was elected. Phil Scott, a Republican, was among a group of nine bipartisan governors who signed a letter in 2017 asking Congress to drop the Graham-Cassidy ACA repeal measure that was then under consideration, and instead focus on bipartisan efforts to stabilize the individual health insurance markets. Scott was re-elected in 2018.

Vermont implemented health care reform well before the ACA

Before the ACA, Vermont was one of only a handful of states where individual health insurance was not medically underwritten; this had been the case since 1992. That means that medical history was not used to determine eligibility for coverage. In addition to guaranteed issue policies, the state also utilized community rating, so premiums were not higher for older insureds (this is still the case; Vermont and New York are the only states where insurers cannot charge older applicants more than they charge younger applicants).

Although these are good measures to protect consumers, they are not necessarily beneficial for health insurance carriers looking to make a profit, and the market had destabilized significantly by 2006. The legislature passed a measure in that year that contained a variety of reforms, and the ACA later piggy-backed nicely on what Vermont was already doing.

Because Vermont had a law that required all policies to be guaranteed issue, there was no need for a state-run high-risk pool prior to the ACA, but the law did still provide PCIP coverage in Vermont starting in 2010.

Medicare enrollment in the state of Vermont

There were 149,614 Vermont residents enrolled in Medicare as of April 2019. This is more than 23 percent of the state’s population – the national average is a little more than 18 percent, but Vermont’s population is older than the national average.

Read more about Medicare in Vermont, including the state’s rules for Medigap plans.

Vermont health insurance resources

State-based health reform legislation

Vermont’s proactive approach to healthcare reform means there is plenty of healthcare-related legislative action in the state. Scroll to the bottom of this page for a summary of recent Vermont bills.

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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