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Vermont health insurance

Two insurers are offering individual-market health plans in the state.

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.)

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 was available to all states, but most rejected it.)

Open enrollment in Vermont follows the federal schedule of November 1 to December 15, and Vermont has been one of the few state-run exchanges that hasn’t issued extensions in recent years. But two days after the enrollment period for 2019 plans ended, Vermont Health Connect announced that call volume had been particularly high on December 14 and 15, and that they would allow a few more days for people who weren’t able to get through to the exchange late in open enrollment due to high call volume. Residents who weren’t able to get through during open enrollment must contact Vermont Health Connect by December 21 at 5pm in order to enroll in a plan for 2019. People who do so will have coverage effective January 1, 2019.

Other than that, enrollment outside of open enrollment requires a qualifying event.

2019 Vermont Health Connect rates and carriers

Two insurers offer plans in Vermont’s individual market: MVP and Blue Cross Blue Shield of Vermont. For 2019 health plans, the average rate increase in Vermont is about 6 percent. Specifically, the average rate increase for MVP plans is 6.6 percent, and for Blue Cross Blue Shield of Vermont, it’s 5.8 percent.

And premium subsidies are significantly larger for 2019, which is good news for the 82 percent of Vermont’s exchange enrollees who were receiving premium subsidies in 2018. The larger subsidies are a result of Senate Bill 19, which allows insurers to add the cost of CSR to on-exchange Silver plan premiums, and create slightly different off-exchange “reflective Silver plans” that do not include the cost of CSR in their rates.

This will result in larger premium subsidies for everyone who gets premium subsidies (since higher Silver plan rates result in larger subsidies), and gives people who don’t get premium subsidies the opportunity to purchase a non-Silver plan or an off-exchange Silver plan, without having to pay the added premium cost for CSR. According to Vermont Health Connect, the average subsidized enrollee will receive subsidies in 2019 that are more than $100/month larger than they were in 2018.

In 2014 and 2015, Vermont did not allow off-exchange plans at all; anyone purchasing coverage in the individual market had to obtain a plan via Vermont Health Connect. But in 2016, Full-Cost Individual Direct Enrollment, which is essentially an off-exchange market, was created. Vermont residents can now buy qualified health plans (QHPs) directly from Blue Cross Blue Shield of Vermont or MVP.

As it is with every state, no subsidies are available when QHPs are purchased through carriers, so the state only encourages the direct enrollment pathway for enrollees who aren’t eligible for subsidies. As of June 2018, enrollment in individual plans through the exchange stood at roughly 27,000 people, and nearly 6,400 were enrolled in direct enrollment (off-exchange) plans.

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 will 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. Details and updates about the state’s all-payer program are available here.

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.

Vermont enrollment in QHPs

Near the end of 2013, the Kaiser Family Foundation estimated that Vermont’s exchange had a potential market of 45,000 residents and that 27,000 of them would qualify for premium subsidies to reduce the cost of their coverage. By mid-April 2014, at the end of the first open enrollment period, almost all of them – 38,048 people – had finalized their qualified health plan selections in the Vermont exchange.

Two years later, in April 2016, Vermont Health Connect reported that 28,167 people had enrolled in QHPs through the exchange and another 4,606 had enrolled in QHPs directly through carriers.

Vermont’s individual health insurance rates have been the fifth highest in the nation, partly because of the low level of competition in the exchange, and partly because the population is older than average and the state uses community rating, with premiums that are not based on an insured’s age.

By June 2018, enrollment in individual plans through the exchange stood at roughly 27,000 people, and about 6,400 more were enrolled in exchange-certified plans purchased directly through MVP and BCBSVT (those plans are not eligible for subsidies, but are the same plans that people could otherwise purchase in the exchange). And nearly 45,000 people were enrolled in small business QHPs as of June 2018.

Read more about the Vermont health insurance marketplace.

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. While Vermont’s uninsured population was already quite low pre-ACA, the state’s average monthly Medicaid enrollment increased by 14 percent from 2013 to 2016.

But that leveled off and began to decline in 2016, when the state implemented a robust eligibility redetermination system. By August 2018, enrollment in Medicaid/CHIP was virtually unchanged from where it had been at the end of 2013.

Nationwide, eligible applicants can enroll in Medicaid at any time during the year.

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. According to a Kaiser Family Foundation analysis, 36 percent of the uninsured population was expected to be eligible for expanded Medicaid or CHIP, and the exchange had signed up 85 percent of its potential private plan enrollees by the end of the first open enrollment period.

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, however, to 4.6 percent (nationwide there was also a slight uptick in the uninsured rate in 2017, after President Trump took office).

While access to coverage has improved and the overall uninsured rate is lower than it was in 2013, Medicaid/CHIP enrollment as of August 2018 was virtually the same as it had been at the end of 2013, before Medicaid expansion took effect, with only about 235 more people enrolled. In other similar-sized states that expanded Medicaid and saw their uninsured population shrink, Medicaid enrollment has grown much more sharply than it has in Vermont.

Medicaid enrollment in Vermont did grow more in the first couple years, and total enrollment was up about 11 percent by mid-2016. But the state has worked to implement accurate eligibility redetermination processes since 2016, to ensure that people are enrolled in the correct coverage. The result has been fewer people enrolled in Medicaid, and more people enrolled in private coverage.

The state merged its individual and small-group markets, which has helped to stabilize the individual market. By June 2018, enrollment in individual plans through the exchange stood at roughly 27,000 people, and about 6,400 more were enrolled in exchange-certified plans purchased directly from the state’s insurers.

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.

Former Gov. Peter Shumlin was not only supportive of the ACA, he was 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.

In November 2014, Gov. Shumlin defeated Republican Scott Milne by about 2,400 votes. But since neither candidate garnered more than 50 percent of the popular vote, it came down to the state legislature to determine the outcome of the governor’s race. Ultimately, Shumlin retained the governorship for a third two-year term.

But 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 has expanded Medicaid under the ACA and is running its own exchange, Vermont Health Connect. The state is also piloting an all-payer system that’s focused on efficiency and health outcomes, as opposed to paying providers on a fee-for-service model. And starting in 2020, Vermont will implement an individual mandate, requiring residents to have health insurance or pay a penalty. The ACA includes a mandate, but the associated penalty no longer applies after the end of 2018. Massachusetts already had a mandate, but Vermont, New Jersey, and DC enacted legislation in 2018 to implement their own mandates (effective in 2019 in DC and New Jersey, but not until 2020 in Vermont).

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

Vermont Medicare enrollment reached 143,511 as of September 2018, about 23 percent of its population – the national average is 18 percent. About 84 percent of Vermont Medicare recipients qualify based on age, while the remainder are eligible due to disability.

In 2016, Medicare spent about $7,541 per Original Medicare enrollee in Vermont. The state was one of just eight where average per enrollee spending was under $8,000 (the data is adjusted to account for regional variations in payment rates.

Private Medicare Advantage plans are available as an alternative to Original Medicare, although they are far less popular in Vermont than they are in much of the rest of the country. As of 2018, only about 15,000 enrollees (10 percent of Vermont’s Medicare population) had opted to receive their Medicare benefits from a private insurer instead of Original Medicare. That was far below the 36 percent of Medicare beneficiaries who make that choice on a national scale.

Vermont Medicare recipients can also select stand-alone Medicare Part D prescription drug plans to supplement their Original Medicare coverage and about 65 percent do, compared with 43 percent nationwide. This makes sense, as Part D plans are intended to supplement traditional Medicare (Medicare Advantage plans generally have built-in Part D coverage), so in states where Medicare Advantage enrollment is lower, Part D enrollment is likely to be higher.

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.