Official: Exchange plan is about finding insurance, not about cost

Friday October 12, 2012


Staff Writer

BENNINGTON -- Starting in 2014, everyone will have to be enrolled in a health insurance plan. To make buying an affordable plan easier, Vermont intends to create a health benefit exchange which will be to health insurance what websites like Travelocity and Priceline are to airline tickets and hotels, according to Lindsey Tucker, commissioner of the Health Insurance Exchange.

"Another bureaucracy's responsibility"

Tucker and Stephen Kimbell, commissioner of the Department of Financial Regulation, held a forum Wednesday at the Bennington Free Library and explained the exchange to a group of about 20 people representing small businesses, schools, and health care entities, many of whom wanted to talk more about the cost of health care.

"The exchange is a way to purchase insurance," said Kimbell. "Reducing cost is another bureaucracy's responsibility."

Kimbell said cost control falls under the Green Mountain Care Board. Both the Vermont Health Benefit Exchange and the board were created by Act 48 which was designed to dovetail with the federal Affordable Care Act. On its own the exchange does not lower the cost of care, Kimball said, but acts as a central location for Vermonters and small businesses who qualify to shop for insurance plans.

Kimbell said the exchange has to be up and running by Jan. 1, 2014, which is when everyone must be enrolled in a health insurance plan that meets certain standards. Individuals and businesses with 50 or fewer employs will be eligible to use it. Those who are not insured will have to pay an assessment unless they are from a low enough income bracket or qualify through some other exemption.

Kimbell said the federal law requires states to set up an exchange so people can easily compare and buy insurance. He said Vermont decided to make its own exchange.

He said the exchange is meant to act as a bridge between the current system of health insurance and the one supported by Gov. Peter Shumlin and President Barack Obama.

"The exchange is not an insurance company; it's a portal where you can get information," Kimbell said.

According to Kimbell any insurance plan available in Vermont will be available through the exchange but plans on the exchange will have to meet certain requirements. Among them, "out-of-pocket" expenses for customers will have to be limited. Deductibles can be no higher than $2,000 for individuals and $4,000 for families. The total cost sharing per year, which includes deductibles, co-pays, and co-insurance, is capped at $6,050 for individuals and $12,500 for families earning more than 400 percent above the poverty line. For families bellow that the cap is prorated.

Those earning under the 400 percent of the poverty level will have access to tax credits which go to their insurance carrier and allow it to reduce their premiums. Individual and family shares of the premium is capped at 9.5 percent.

Information on how to use the exchange will be on its website but a call center will also be set up, said Tucker.

Small businesses that purchase insurance for their employees through the exchange can pick among tiered plans where they employees can then select one of a number of tiers that work for them. The exchange will calculate the costs, she said.

The exchange offers other incentives to small businesses for participating in it, said Kimbell. Through 2013 businesses with under 25 employees are eligible for tax credits equal to 35 percent of their contributions to employee premiums provided they cover at least half of the employee's premium. In 2014 through 2015 the credit goes up to 50 percent.

Kimbell said if health care costs do not decrease the exchange will not function.

Bert Savoia, a former hospital chief financial officer, said while he felt Kimbell and Tucker did well in explaining the exchange, it was only "half a glass of water."

He and others seemed more interested in the cost of health care and how it would be reduced. Savoia said if the cost does not go down things like the exchange will shift costs to insurance carriers, who may pull out of Vermont. He said the federal tax credits also don't reduce costs so much as shift them to the federal government.


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