Health exchange delay: How it will work
By Neal P. Goswami
VERMONT PRESS BUREAU | November 09,2013
MONTPELIER — The Shumlin administration released details Friday on how it plans to handle short-term insurance policies necessitated by a three-month delay in Vermont Health Connect’s insurance coverage for individuals and small businesses.
The administration’s road map, crafted in recent days by state officials and the state’s two health insurance carriers, arrived more than a week after Gov. Peter Shumlin announced the delay because of persistent technical problems with the online insurance marketplace.
Despite assurances from Shumlin and senior administration officials over the past few months that the site was on track, consumers experienced glitches after its Oct. 1 launch. Developers continue to scramble to make the payment mechanism functional on the federally mandated exchange.
Roughly 100,000 Vermonters are expected to need Vermont Health Connect for coverage.
“We’ve provided more options for Vermonters to enroll in Vermont Health Connect and have provided the opportunity for more time for them to make their decisions if they so choose,” said Mark Larson, commissioner of the Department of Vermont Health Access, in a conference call Friday with reporters.
Individuals and small businesses can now extend current plans by up to three months to March 31 while maintaining their 2013 premiums. Even those who have already received notification from their insurance carrier that a current policy will be canceled can extend the plan.
Deductibles for current plans will reset Jan. 1 as they typically would for a new plan year. A plan extension into 2014 is essentially a short plan year, administration officials said.
However, any deductible amounts and out-of-pocket expenses paid during the short extension period will be applied to whatever new 2014 exchange plan is eventually chosen as long as the insurance carrier remains the same, officials said.
Larson said individuals who do nothing will have their current plans automatically extended into 2014 and will then have to choose a new exchange plan by March 15 to meet the new April 1 coverage mandate.
Additional changes have added the option for small businesses to enroll in exchange plans directly through MVP Health Care or Blue Cross Blue Shield.
Administration officials said Friday that small businesses will soon receive a notice from their insurance carrier with information about the exchange plan closest to their current plan. Businesses choosing to enroll in that plan will be automatically rolled into it and billed.
Businesses that want to select a different plan, enroll themselves on the exchange or switch insurance carriers will need to inform their current carrier by Nov. 25.
To avoid any lapse in coverage, small businesses must select a “plan menu” for employees by Feb. 1, and employees will then need to select their insurance plan from that menu by Feb. 28 for April 1 coverage.
Unlike for individuals, businesses that do not respond will be rolled into an exchange plan that is closest to the current coverage they offer employees rather than have current plans extended.
Both Blue Cross Blue Shield and MVP will send notices to their small business clients in the next several days with instructions on how to take advantage of the available enrollment channels, Larson said.
Meanwhile, Vermonters currently on state and federally subsidized insurance — Vermont Health Access Plan, or VHAP, and Catamount Health — who do not qualify for Medicaid in 2014 will have plans automatically extended to March 31. Those plans had been slated to end Dec. 31.
That could result in an additional cost to the state. Larson said state officials are working with the federal Centers for Medicare and Medicaid Services, or CMS, to ensure continued federal support for the programs through March 31.
“I’m very confident that CMS will provide that opportunity to us,” Larson said. “There may be a financial impact to the state for individuals that continue in VHAP and Catamount.”
The decision was made to extend the programs to offer consistency to all individuals, Larson said. Many Vermonters enrolled in those programs will likely take advantage of the additional three months of coverage because premiums for some are lower in those programs than what is available on the exchange.
“Based on that individual assessment, their best option in terms of extending or transitioning to a 2014 Vermont Health Connect plan in January varies,” Larson said.
Both Blue Cross Blue Shield and MVP could lose money as a result of the mandate extension because many of the 2013 insurance plans they currently offer carry lower premiums than the 2014 exchange options.
“There’s no financial agreement that has been made between the state and carriers,” Larson said.
Kevin Goddard, vice president of external affairs for Blue Cross Blue Shield, said it’s too early to determine what, if any, financial impact the delay will have on carriers.
“We spent so much time this week trying to understand and finalize the details of how these options would work and put them into place, so we really have not taken the time to even estimate what the financial implications of this are,” Goddard said.
“A lot of it actually depends on what happens with folks — how many decide to extend their current coverage and how many decide to go into the Vermont Health Connect products,” he said.
Any losses would be covered by reserve funds, which can be replenished through the state’s insurance rate approval process, Goddard said.
“If there were financial consequences to this that were material and significant and if it reduced our reserve to a point where that was a cause for concern, then that would be the vehicle that the Green Mountain Care Board could look at,” he said.
Despite the unknowns, Bill Little, vice president of MVP Health Care, said in a statement Friday that his company firmly backs the delay. The insurance carrier continues to work with the administration on the logistics, he said.
Blue Cross Blue Shield is also on board, according to President and CEO Don George.
“We’ve worked closely with the state on how the additional options announced by Gov. Shumlin will work,” he said, “and now that those details have been finalized our exchange specialists and all Blue Cross employees are ready to assist our customers and all Vermonters in understanding their coverage options for Jan. 1.”