The state has released its recommended “cost-sharing” structure for insurance plans offered through the federal health care exchange.
The plan will limit the maximum out-of-pocket costs paid for by an individual and families. The cap is $6,250 for an individual and $12,500 for a family of four. In addition, Vermonters insured in the exchange will be responsible for up to $1,250 in prescription drug costs. The maximum deductible allowed in the exchange is $2,000.
The exchange will go into effect in 2014, and the state plans to use it as a platform for the Shumlin administration’s ambitious single payer health care plan.
Robin Lunge, the director of health care reform under Gov. Peter Shumlin, explained to reporters that the administration is “required to do the exchange, but that’s not where the governor wants to end up.”
Health insurance premiums in the new federal exchange will fluctuate, depending on the quality of the plan and the level of subsidy available for individuals. Premium levels have not yet been developed for the nine different plans that will be offered through the exchange.
“We live in a federal system where the first step is building the exchange,” Lunge said. “The exchange requires a range of plan designs at actuarial levels. We’re trying to balance the diverse needs of consumers by having a range of choices from what some feel is inadequate to what some people think is too rich.”
Monthly premiums for an individual would represent no more than 9.5 percent of total income, according to a sample sliding scale spreadsheet from the Department of Vermont Health Access that is based on a “silver” level plan. Vermonters whose income is 400 percent of poverty or lower will qualify for a federal tax credit.
For an individual who makes $2,793 per month, the monthly premium for a silver plan would be $189, with the federal subsidy. The rate for individuals who make $3,724 a month is $354. A family of four living on $3,842 a month would pay $242 a month and household incomes of as much as $7,684 would pay $730 a month.
The total cost of the benefits offered in the exchange will be split between insurers and consumers. There are four actuarial levels in the plan, and each one is meant to clarify the value of the insurance, based on what percentage of the health care costs incurred by patients is covered by the insurer. The actuarial values are grouped by “metal level.” The bronze plan, for example, covers 60 percent of the cost of a patient’s health care; silver covers 70 percent; gold covers 80 percent; and platinum covers 90 percent.
Catamount Health, the state subsidized program for uninsured Vermonters, falls somewhere between gold and platinum, according to Lunge.
The Shumlin administration has set up six different “specified plan designs” within each “metal level” and three “choice designs” that allow insurance companies to develop alternative plans for consumers. The details of each plan vary, depending on the co-pay and coinsurance amounts for specific services.
The specified platinum plan, for example has a $250 deductible and an out-of-pocket maximum of $1,250 for medical care and $1,250 for prescription drugs. Office visits include a $10 copay, and a trip to the ER is $100.
Under the sample “choice” bronze plan, the medical deductible is $2,000 and the prescription drug deductible is $1,250. The total out-of-pocket costs are $6,250 for medical care and $1,250 for drugs. The cost of the extras — ambulance services, specialists, radiology, etc. — is shared 50/50 by patients and insurers.
Lunge presented her recommendations to the Green Mountain Care Board on Tuesday. The board will make a decision about whether to adopt the plan in late September after a public comment period of six weeks.
Two weeks ago, Lunge asked the board to consider a model plan for the scope of “essential health benefits” in the exchange. BlueCross BlueShield of Vermont was selected as the “benchmark” insurance plan for the exchange. Vermont’s two other health insurers, MVP and CIGNA, will be required to emulate the BlueCross plan.