Friday May 3, 2013

ANDREW McKEEVER

The Manchester Journal

MANCHESTER -- Major changes are coming to the ways Vermonters will obtain health insurance, and on Tuesday night, one of the state’s top officials charged with implementing the new system described how it would work.

Robin Lunge, Vermont’s Agency of Administration’s Director of Health Reform, focused on the way small businesses -- those with 50 employees or less -- would be affected. However, her more than hour-long talk, interspersed with numerous questions from her audience of more than 125 at the First Congregational Church, also touched on the broader scope and thrust of the new system being readied for unveiling on Oct. 1, 2013, when individuals and businesses can start enrolling in it.

The new destination for those in pursuit of health insurance coverage is Vermont Health Connect, the online marketplace or exchange where individuals, businesses and families will be able to compare public and private health plans and select one that fits their needs and budgets.

"Right now, if you were to try and buy insurance, you basically would need to go all over the place," she said near the start of her talk.

"You’d need to talk to each different insurance company, you might talk to a broker to help you navigate that system."

But starting on Jan. 1, 2014, Vermont’s health exchange -- Vermont Health Connect -- will have a menu of plans with ranges of deductibles and premium prices for consumers to select from. The health exchange is an outgrowth of the federal Affordable Care Act, which passed Congress in 2010 amid much controversy, and became the subject of a lawsuit which eventually found its way to the U.S. Supreme Court, which deemed the act constitutional last year.

Vermont’s legislature, in turn, passed two pieces of legislation in 2011 and 2012, which authorized the exchange now known as Vermont Health Connect and how it would be implemented.

Controlling the "unsustainable" growth in the costs of health care and health insurance coverage was one of the principle objectives of the new system, Lunge said.

"If we don’t tackle how we come up with a sustainable system, we’re going to watch the system fall under its own weight," she said. At the same time, she stressed it was important to maintain the high quality of healthcare, and suggested that wringing inefficiencies and unnecessary costs out of the way health care is provided would be a key.

Along with reducing costs, the state has three other goals: Assuring that all Vermonters have access to health care, assuring greater fairness in how it’s paid for, and improving the overall health of the state’s population.

The state starts off in a fairly good position on the last point, where several studies have suggested that the state as a whole is among the healthiest in the nation. And only 6 percent of the state’s population doesn’t have some form of health coverage, which ranks Vermont second out of the 50 states in that regard, she said.

On the other hand, many Vermonters remain "underinsured," meaning that what they pay in health insurance reflects a low percentage of their healthcare costs, she said.

Vermonters who do not currently have health insurance, or purchase it individually, or who are on Medicaid or enrolled in one of the state’s existing programs such as Dr. Dynasaur, Catamount Health or the Vermont Health Access Program, are eligible to enroll through Vermont Health Connect. It’s also the vehicle small businesses will use to determine whether or not, and how, they will offer health insurance benefits to their employees, assuming they are a small business of with fewer than 50 full time employees or the equivalent. A full-time employee is defined as one who works 30 hours a week.

Vermonters who are currently enrolled in the federal Medicare program, however, will not be affected by the new system. They will continue to receive their benefits the same way they do now, she said.

There will be four levels of plans offered on the exchange, through two health insurance providers; Blue Cross/Blue Shield and MVP. Ranging from "bronze" to "platinum," the plans will differ on the rates of premiums and out-of-pocket expenses, with bronze plans featuring higher deductibles and lower monthly costs. "Platinum" plans, by contrast, will offer low deductibles, with higher monthly costs. All plans will offer the same coverage for "essential" healthcare services, Lunge said. Those will include emergency care, prescription drugs, hospitalization and laboratory services, among others.

At this point, Lunge began to get peppered from questions from her audience on areas ranging from how it affected businesses who had operations out-of-state, what defined a full time employee, how were seasonal employees to be calculated and the role of health insurance brokers under the new system.

Brokers will still have a place in the new system, and consumers will be able to use them and continue their existing relationships. At the same time, Vermont Health Connect will be employing their own personnel, known as "navigators," to assist buyers.

On the central point of the evening -- exploring the impact of the new exchange and the new rules for small businesses, Lunge said that employers will have a choice about whether or not to offer health benefits, since their employees now will be able to access health care through the exchange themselves. If they decide not to offer health insurance, they will not be subject to a federal penalty either.

Small businesses with 25 or fewer employees who currently offer health insurance may also find they qualify for federal tax credit, she said. The decision on whether to offer health insurance to employees of small businesses will probably hinge on the salaries and compensation they are paid. Businesses with highly compensated individuals may decide it makes sense to continue to offer those benefits; others, where the salaries of their employees are lower, may decide they are better off to discontinue company-wide plans and let their employees shop for themselves on the exchange, she said.

"The pros and cons may be different," she said. "We are working on resources to help you with that decision. It’s not a decision the government could or should make for you, but we can try to help."

In 2016, businesses with more than 50 employees will also become part of the exchange, and in 2017, Vermont hopes to have a broader, universal healthcare plan in place, sometimes referred to as a "single-payer" plan, but that is dependent on a federal waiver which is not yet in place, Lunge said. Those seeking more information about Vermont Health connect can visit their website at vthealthconnect.gov.