In April, Vermont became the first state to announce proposed insurance premium rates for the Affordable Care Act's public health insurance exchanges opening for 2014. According to published reports, the rates for a family range from an average high of about $1,700 a month. Catastrophic coverage - only available to those under age 30 - will average about $745 a month for a family.
The costs still need to go through an approval stage, and do not include the subsidies that certain people will receive. Even so, the numbers provide a glimpse at the ballpark of rates that consumers will be dealt next year.
EBA spoke with Mark Larson, commissioner of the Department of Vermont Health Access, about the progress his state has made so far on Vermont Health Connect, the name for the exchange. He shares what Vermont is doing differently from nearly every other state, a timeline for brokers and much more.
Can you summarize Vermont's exchange rates?
First, I should say that the rates that we posted were those proposed by the two carriers in Vermont in the individual and small-group markets that are proposing to offer plans on our exchange. Those rates haven't been subject to review and approval through our regulatory process, so they are proposed rates and won't be final for a couple of months. In looking at the proposed rates, generally what we saw was that the rate shock that some had predicted didn't materialize and that the rates are generally consistent with what we've seen in the Vermont market to date, even though many of the products will have enhanced benefits and more beneficial cost sharing for consumers.
What are the two carriers?
That would be Blue Cross Blue Shield of Vermont and MVP Health. We do have an application for license from a health CO-OP in Vermont. They're not currently licensed, so that application is still pending. So we could end up with three [carriers], but we have proposed rates from two.
Do you find it significant that Vermont is the first state to issue proposed rates?
I think we have observed that the marketplace has produced a new level of competition amongst the plans and clearly we envision there will be a greater ability of consumers to compare plans apples-to-apples, as was envisioned by the Affordable Care Act.
And in that regard what we're seeing is some of the desired outcomes from the exchange and the ACA starting to play out. I think what also is significant to us for all the public forums we've done and education done around the exchange, the most pressing question that people will ask is, "But how much will the rates be?" And so it's very significant to get to the point where people ... have a sense of what the options will be starting in October.
The other thing that is true for us in Vermont is that normally rates for the upcoming year might not be approved until October, November, even as late as December. And we're on track at this point to have rates approved by July. So both individuals and small businesses who are looking for options for 2014 will have information about plans and rates far earlier this year than they have in the past. It's a significant change from the past.
I know there's a lot made of the notion of the importance of predictability and we always point out that health insurance has been something that has never been predictable. So if nothing else, people have the information earlier than in the past and we think that's a positive step.
The rates released don't account for subsidies for low income individuals and families. What will these people pay?
For individuals and families purchasing outside of employment, their premiums will be capped as a percentage of their income, and those percentages are set. So somebody could calculate today what their premium would be as a percentage of their income. There's a variety of resources that provide access for people who want to know what that will be. That information is available on the federal health care website and our website as well, which is VermontHealthConnect.gov.
Vermont is unique in that we're one of two states looking at further reducing premiums through a state-based premium assistant program that in essence will buy down the percentage of income by an additional 1.5% below the federal premium assistance tax credits. That is pending approval by our legislature, so we should know within the next two to three weeks.
How many people are you anticipating will participate on the exchange in 2014?
We expect around 120,000 Vermonters will access coverage through qualified health plans purchased in Vermont Health Connect ... and then also individuals will be able to access our Medicaid-funded programs in Vermont. That means up to 170,000 additional Vermonters will be able to access coverage through the exchange through publicly funding plans.
You've already mentioned a few things that are different about Vermont in comparison to other states, anything else?
We are unique in having the entire individual and small group markets purchased through the exchange so we will not have an off-exchange market for individual and small group plans. That means that if you are a small business owner with 50 full-time employees and you want to provide coverage to your employees then you would purchase that insurance through the exchange as opposed to directly from an insurance company.
What's going on with the employee choice in Vermont, as it's been delayed in the federal public exchanges?
We're moving forward with providing full employee choice. In Vermont, we are operating one exchange, an integrated exchange, for both the individual and the small group plans. And we're continuing to plan that employers could access the exchange to offer all the plans from a specific carrier or full choice across carriers and metal levels so that employees can go on the exchange on their own.
When we talked to small businesses, that was actually something they were very excited about with the exchange and we wanted to provide that option for both employers and employees because it was certainly something that received a lot of positive feedback when we surveyed employers.
What role will brokers play on your exchange? And have they been trained yet?
We haven't begun training yet, but we have worked closely with brokers in Vermont and we've convened a broker advisory group to provide direct input into the development of the exchange.
We included funding in our federal exchange grant that will allow small businesses to maintain their relationship with their broker if they so choose. We've been working with our broker advisory group on how to operationalize that assistance. We know that a lot of small businesses are interested in preserving their relationship with their broker.
We are in the process of reviewing applications for navigators right now and as soon as those decisions are made, I believe our plan is to implement [broker] training by June to start that training. So that clearly by mid-summer, navigators and brokers can be out in the community working with individuals and small businesses to prepare for the choices that they'll make later in the fall.
It made news when the federal public exchange application for individuals was reduced from 21 pages to three. What is the length of Vermont's?
I haven't seen it completely yet because we've been waiting for the federal application so that we could use that as a template in finalizing ours. So we'll take all the information from our evaluation of our revised business processes in terms of eligibility screening and enrollment, we'll compare that with the federal application, see if anything's missing in the Vermont context. We're certainly pleased ... that it's shorter than what we've received in the past.
Anything else?
It's certainly a very busy year and we are realistic about the amount of work that's left to do, but we believe if we stick to our plan, we'll be ready for shopping on October 1. I think that we remain excited about the impact of the ACA and ... we project there will be many Vermonters who will have more access and see their coverage improve. And there will be a number of Vermonters who don't have coverage today who will be able to access coverage. So for all of those reasons we think the work is worth it, although it has been a daunting task.
