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Phil Scott, Democratic Senators Head Out In Search For Exchange Solutions

On Monday morning, the Democratic chairs of the Senate committees on finance and appropriations hopped into the lieutenant governor’s pickup truck and headed for southern New England. The purpose of the road trip was to find money-saving solutions to Vermont’s health exchange problems. And this bipartisan crew of politicians says it might be time to team up with other states.

Republican Phil Scott, a former Late Model champion at Thunder Road, was the driver, as might be expected. Along for the ride were Caledonia Sen. Jane Kitchel, chairwoman of the Senate Committee on Appropriations, and Chittenden Sen. Tim Ashe, chairman of the Senate Committee on Finance.

“I have a four-door pickup, so Sen. Ashe took the back seat,” Scott says.

The trio headed for an 11 a.m. meeting with the head of Connecticut’s version of Vermont Health Connect. Though far from perfect, Access Health CT, as the exchange is known there, has performed far better than operations in other states.

At a recent annual meeting of lieutenant governors in Washington, D.C., Scott says he spent time commiserating with his counterparts about exchange horror stories. And he says Connecticut Lt. Gov. Nancy Wyman suggested that Vermont might be able to hitch its train to Connecticut’s success.

“If there’s another way of doing business that could potentially save us money, real money, state money, I think that it’s perfectly appropriate for us to do that, to look elsewhere,” Scott says.

"If there's another way of doing business that could potentially save us money, real money, state money, I think that it's perfectly appropriate for us to do that, to look elsewhere. " - Lt. Gov. Phil Scott on his recent trip to explore joining Connecticut's health exchange

  Gov. Peter Shumlin last month declared that it Vermont Health Connect doesn’t meet key milestones soon, then he’ll abandon the technological infrastructure in favor of a federal version of the exchange. But Ashe says that even if the administration can get the exchange running smoothly, the costs needed to operate it could become a budget buster for years to come.

“We’re seeing that across the country operating costs for exchanges are in the $20 to $30 million dollar range,” Ashe says. “That is in stark contrast to what we’re looking at here in Vermont with $51 million a year. Just something is wrong here.”

The state share of those costs have ballooned from an estimated $14 million annually last year to $26 million, according to the latest projections.

“These are real numbers and that $12 million additional operating expense is coming at the expense of everything else we do in state government,” Ashe says. “So that’s the reason for major concern.”

Scott says he asked Kitchel and Ashe to meet with him, Wyman, and the head of Connecticut’s exchange, James Wadleigh, to explore ways in which Vermont might “piggyback” on the Constitution  State’s system. Unlike Vermont, where the Department of Vermont Health Access operates the exchange, Connecticut has enlisted a private entity to administer its exchange.

Kitchel says she sees potential in some kind of partnership with Connecticut, and possibly other states, though she says it’s premature to say precisely what that partnership might look like. The newly minted head of Rhode Island’s exchange, Anya Rader Wallack, also attended the meeting, to see if her state might benefit from tie-ins with Connecticut. Rader Wallack formerly served as chief of health reform for Peter Shumlin.

“If there’s anything we’re working on and want to continue to explore is, is there some economic advantage to states working together,” Kitchel says.

Kitchel says it’s time to step back and reevaluate the path Vermont has chosen, given the budgetary consequences of the operating systems on which Vermont Health Connect will rely. If there are ways to alter the “architecture” of those systems, or pay a state like Connecticut to administer components of Vermont’s exchange, Kitchel says it might mitigate the fiscal impact of the enterprise.  

“Perhaps there’s a way of piggybacking or getting the benefit. Or are there certain functions that are common to all states, for example a call center, member services? If you join and create a larger volume of business, can you in fact negotiate a better price?” Kitchel says.

Shumlin has said that if Vermont’s exchange can’t get its “change of circumstance” functionality resolved by the end of May, or be ready for open enrollment by October, then he’ll ditch Vermont Health Connect in favor of the federal exchange, or what’s known as a federally supported state-based exchange.

Scott, however, says Wadleigh says there may be another option.

“He did say he thought that we could work together …  because it is a quasi public-private kind of arrangement that they have in Connecticut, where they could actually pull us in if need be,” Scott says.

Ashe says he can’t imagine a scenario in which Vermont offloads entirely the administration of its exchange to another state. But he says a place like Connecticut could certainly play a role.

“Many of the functions that Vermont Health Connect has are done by private vendors. The question is whether another state’s exchange could also pick up some of those functions. And it’s got to be explored,” Ashe says.

Connecticut has a vested financial interest in expanding its own exchange to provide services states like Vermont and Rhode Island that are struggling with theirs.

Shumlin’s current chief of health care reform, Lawrence Miller, says he’s looked into state partnerships in the past. He says he wasn’t convinced it would improve Vermont’s circumstances.

"So the question is to whether or not you could save substantial amounts of money, or would it in fact cost more to have second solution." -- Lawrence Miller, chief of health care reform

“So the question is to whether or not you could save substantial amounts of money, or would it in fact cost more to have second solution … is where I’ve gotten hung up in the past when I’ve looked at alternatives,” Miller says.

Miller says, for example, that even if Vermont offloaded exchange operations to an external operator, then it would still have to develop the infrastructure needed to process people enrolled in Medicaid. And there are other complications as well, such as the fact that Vermont is one of only two states that provides state subsidies to lower-income residents purchasing insurance on the exchange.

Miller says building a standalone bureaucracy to administer those subsidies could quickly consume whatever savings Vermont realized by not having its own exchange.

Miller however says the administration isn’t closing the door on the idea. The director of operations at Vermont Health Connect met with his counterparts from other state-based exchanges across the country at a meeting in Denver, Co., last week. Miller says discussions included potential for collaboration with other states.

“We’ll be looking at other alternatives … if for some reason we don’t meet the milestones that we’ve laid out in the proposed legislation,” Miller says.

Scott, Ashe and Kitchel say they hope to brief the administration on their trip, and begin more in-depth conversations with Connecticut.

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