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Vermont health insurance

Green Mountain State testing all-payer model agreement

Rate increases in Vermont’s individual market for 2018 were once again in the single-digit range, and far smaller than the double-digit average increases that most other states experienced. Vermont did not allow insurers to add the cost of cost-sharing reductions (CSR) to premiums for 2018, even after the Trump Administration eliminated federal funding for CSR in October 2017 (North Dakota and DC were the only other places where insurers weren’t able to add the cost of CSR to premiums).

But for 2019 and future years (assuming federal funding for CSR is not allocated), Vermont enacted 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 will 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 will give 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.

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, the state introduced individual direct enrollment (enrollment directly via insurers, rather than the exchange) for people who don’t qualify for premium subsidies. By January 2018, enrollment in individual plans through the exchange stood at roughly 27,000 people, and nearly 7,000 had signed up for direct enrollment (off-exchange) plans.

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 on October 28, 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 has been expanded to include nine of the state’s 14 hospitals (some are only partially participating, with Medicaid patients only), and OneCare will provide care to roughly 120,000 patients in 2018.

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

Vermont health ratings

When it comes to overall health, Vermont was tied with Minnesota for #1 in the nation by The Commonwealth Fund’s Scorecard on State Health System Performance 2015, and claimed the top spot on its own in the 2017 Scorecard.

The state’s earned its strongest marks in the categories of Access (#1), Equity (#2), and Prevention & Treatment (#1). The state’s lowest-performing category, Avoidable Use & Cost (#12) may be improved under the all-payer pilot program described above, in which the state is moving towards a system based on efficiency and outcomes, rather than fee-for-service.

The state’s 2017 scorecard includes additional details on how its ranking was determined.

In the 2015 edition of America’s Health Rankings, Vermont placed second out of the 50 states—Hawaii earned #1. And in the 2017 edition of the Rankings, both Hawaii and Massachusetts edged out Vermont, pushing it to 3rd place. The state ranked second for three of the five major metrics: Community & Environment, Policy, and Clinical Care, but 14th for Health Outcomes.

Trust for America’s Health published 2016 Key Health Data About Vermont that includes rankings for the state across a wide variety of specific diseases and health outcome predictors.

And this interactive map created by the Robert Wood Johnson Foundation lets you compare health factors and outcomes on a county-by-county basis in Vermont. It is worth noting that the percentage of uninsured ranges just 8 to 14 percent across Vermont’s counties, placing it in the 10th percentile. The state’s overall physician to patient ratio is 880:1

How has Obamacare helped VT?

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. But while access to coverage has improved, Medicaid/CHIP enrollment was only about 1 percent higher by the end of 2017 than it had been at the end of 2013, before Medicaid expansion took effect, with only about 1,500 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 January 2018, enrollment in individual plans through the exchange stood at roughly 27,000 people, and 6,900 more were enrolled in exchange-certified plans purchased directly from the state’s insurers.

2018 Vermont Health Connect rates and carriers

Vermont’s state-based health insurance exchange was once the only game option for those buying their own coverage. The state did not allow off-exchange plans to be sold. However, 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.

Vermont’s exchange combines individual and small group markets — only one of two states that have done so. In 2018, MVP and BCBS of Vermont are continuing to offer plans through Vermont Health Connect; their rate increase average 3.5 percent and 9.2 percent, respectively. State regulators approved lower average rate increases than filed by each carrier, as was the case in prior years.

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 January 2018, the exchange reported that roughly 27,000 people had enrolled in 2018 coverage through Vermont Health Connect, in addition to 6,900 people who had signed up for exchange-certified plans 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).

Vermont and the Affordable Care Act

In 2010, both of Vermont’s U.S. Senators, Bernie Sanders and Jeff Leahy, voted yes on the Affordable Care Act. In the House, the lone Vermont representative, Peter Welch, also voted yes. All three are still in Congress and still supportive of the health care reform law.

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.

For the time being, 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.

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 had increased 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 late 2017, enrollment in Medicaid/CHIP was only 1 percent higher than it had been at the end of 2013.

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

What is Vermont’s health insurance history?

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.

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 131,381 in 2015, about 20 percent of its population – the national average is 17 percent. About 82 percent of Vermont Medicare recipients qualify based on age, while the remainder are eligible due to disability.

Medicare spends about $6,903 annually per enrollee in Vermont. The state ranks 47th in overall Medicare spending with $941 million each year.

Medicare Advantage plans are available to Vermont residents who want additional benefits. These plans are selected instead of Original Medicare, and about 8 percent of Vermont Medicare enrollees choose Medicare Advantage over a traditional plan in 2017 – far below the 33 percent of Medicare beneficiaries who make that choice on a national scale. Vermont Medicare recipients can also select Medicare Part D plans 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

Filing an insurance complaint in Vermont

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 healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.