As Problems On Exchange Persist, Speaker Smith Questions Mandates For Businesses
Next year, a state mandate kicks in that will require businesses with between 51 and 100 workers to purchase their employee health benefits from the online insurance exchange. But House Speaker Shap Smith says lawmakers should get rid of that mandate, unless the Shumlin administration can demonstrate serious improvements at Vermont Health Connect.
It’s been 16 months since the Shumlin administration cut the digital ribbon on Vermont Health Connect. And the state’s online health insurance exchange continues to disappoint.
Between the billing errors, wrongful policy terminations, cost overruns and miscellaneous technological glitches, lawmakers are at their wits’ ends. And Smith says it’s time to seriously consider getting rid of a state law that will soon require medium-sized businesses to conduct their health insurance business through the online marketplace.
“We have a significant change coming up in 2016 with employers that have 51 to 100 employees, and I think if we can’t be assured sometime early this session that the exchange is going to work, I think it’s very important for our heath care committee to look at the possibility of making the exchange voluntary,” Smith says.
Smith’s plan doesn’t go as far as some would like to see. Republicans, and groups like the Vermont Chamber of Commerce, want businesses to be able to purchase insurance plans that aren’t available on the exchange, a move they say would expand choice, and potentially decrease cost.
"We have a significant change coming up in 2016 with employers that have 51 to 100 employees, and I think if we can't be assured sometime early this session that the exchange is going to work, I think it's very important for our heath care committee to look at the possibility of making the exchange voluntary." - House Speaker Shap Smith
Smith’s plan wouldn’t open up the market to those kinds of options, but would allow businesses to work directly with private carriers, instead of through the state-run exchange apparatus.
Betsy Bishop, president of the Vermont Chamber of Commerce, says that would be a welcome step.
“Businesses being forced to use a web portal that doesn’t work is just not good policy, and starting in 2016 we essentially have another group of employers that are going to be mandated to do the same thing,” Bishop says. “So if there’s a repeal of that mandate and still an allowance for businesses to purchase directly from insurers, we believe that’s progress.”
Businesses with up to 50 employees are already required to purchase from the exchange. But that mandate has been temporarily suspended, pending resolution of the problems at Vermont Health Connect. And Smith says that if the exchange isn’t ready for businesses of up to 100 people, then no one should have to comply with the mandate.
People with individual health plans are now the only group required to purchase directly from the exchange.
“I think at this point in time, the default setting would be that we ought to move toward make the exchange voluntary, for that population. And actually it would be voluntary for all people, because you can’t just single out a particular population,” Smith says.
"Businesses being forced to use a web portal that doesn't work is just not good policy, and starting in 2016 we essentially have another group of employers that are going to be mandated to do the same thing." - Betsy Bishop, president of the Vermont Chamber of Commerce
That means the burden of proof is now on the Shumlin administration to show that the exchange will be ready for primetime, and soon. Lawrence Miller, chief of the health care reform for the administration, says the exchange’s inability to process changes in consumers’ billing circumstances is at the root of many of the problems.
He says the new contractor brought on board to fix the exchange looks to be on pace to rectify those problems by April.
“From where we sit today, recognizing all the frustrations we’ve had, since [new contractor] Optum has come on, they’ve met all the deliverables they’ve been asked to hit,” Miller says.
Miller says the state wouldn’t enforce the mandate until the site was fully functional. But he says buying through the exchange offers customers significant benefits. When employers purchase through the exchange, Miller says, their workers can select from policies offered by either Blue Cross Blue Shield or MVP. When they purchase directly from the carrier, however, their employees' options are limited to ones offered by a single private insurance company.
"From where we sit today, recognizing all the frustrations we've had, since Optum has come on, they've met all the deliverables they've been asked to hit." - Health care reform chief Lawrence Miller
Miller says employees buying from the exchange would also enjoy a continuity that would allow them to switch jobs mid-year, without sacrificing whatever they’ve paid toward their deductible.
“The other design criteria that I’m particularly interested in is the portability of policies from business to business, or business to individuals, as people move their employment,” Miller says.
Administration officials recently disclosed that the exchange is going to cost nearly $10 million more to operate this year than they’d previously thought. House Minority Leader Don Turner says the program has been a failure, and that the state shouldn’t force people to buy from an exchange that doesn’t work properly.
“Vermonters should be holding these people accountable. We don’t trust what they’re telling us. They haven’t proven to anybody in my caucus that they actually can make this work, the way it was sold to Vermonters,” Turner says.
Turner says eliminating the mandate to buy through the exchange is a welcome first step. But he says opening up the market to non-exchange-qualifying plans would be much better. Those plans don’t meet certain federal minimum requirements needed to be on the exchange, but might offer cheaper options, Turner says.
"They haven't proven to anybody in my caucus that they actually can make this work, the way it was sold to Vermonters." - House Minority Leader Don Turner
“Well it’s all about accessibility and cost,” Turner says. “We believe that if you have more products to choose from, you’re going to be able to buy at a more affordable rate.”
Bishop says that right now, many businesses with between 51 and 100 employees are purchasing insurance that isn’t sold on the exchange. If repealing the exchange mandate altogether would allow those businesses to continue purchasing that insurance, then they should have that option, if they believe it will benefit them.
Miller says Vermont’s small size, and uniquely rigorous state standards for insurance sold here, mean there probably wouldn’t be much appetite among private insurers to pick up market share in Vermont by competing for business that is otherwise going to plans sold on the exchange.
“And I don’t see it being likely that other insurers would come into the market all of a sudden just because there was an in the exchange and out of the exchange, [due to] the market size and the coverage requirements,” Miller says.