Details emerge on cost of health care plans under the Vermont Exchange

Robin Lunge

Robin Lunge, director of health care reform for the Shumlin administration, updates the Vermont Health Access Oversight Committee in June on the progress of setting up a health benefits exchange where Vermonters will purchase health insurance. VTD File Photo/Alan Panebaker

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.

Anne Galloway

Comments

  1. Len Vignola :

    My wife & I are in our mid-70’s. We are covered by Medicare A&B. Our premiums are deducted from mo. social security payments. We also have VT Blue65 to supplement Medicare coverage. We have Blue Medicare Rx coverage for prescriptions. We pay the mo. premiums for both to BC. These plans have been working very well for us & are reasonably affordable.
    Can someone please tell me if we can. My wife has been a diabetic for 51 yrs.- this is an URGENT REQUEST!
    Thank you.

    • The exchange will not change Medicare plans. The program is for people who have no insurance.

      • Dan McCauliffe :

        The health insurance exchange in Vermont is not only for people who currently have no health insurance. In 2014 the exchange is for individuals and small businesses with 50 or fewer employees, most who currently have insurance. The health insurance exchanges were established by the ACA or ObamaCare law. Under the ObamaCare law participation in the exchange is optional. However, Vermont is the only state that has made it mandatory that all individuals and businesses with 50 or fewer employees participate, even though Gov. Shumlin’s own administration has estimated that costs will go up for businesses who currently buy their health insurance through associations, by over 18%. The reason participation is being forced upon Vermonters, who might like to keep the policies they have, is that the Shumlin administration wants to get access to ObamaCare federal subsides that become available only to individuals in the exchange. By forcing employers into the exchange where health insurance costs are higher, the Shumlin administration hopes that employers will drop coverage for their employees, without penalty. By dropping coverage, employees become individuals and may qualify for the ObamaCare subsidies. You see if employees continue to get health insurance through their employer, they will not qualify for the subsidies. The more subsides that Vermont can capture, the more funds they hope to roll over into the single payer system. The hope is that these captured federal subsidies can go on in perpetuity to support the financing of the single payer system. Currently the exchange will start in 2014 and the plan is to switch over to the single payer system by 2017, if not sooner.

      • Dan McCauliffe :

        The health insurance exchange in Vermont is not only for people who currently have no health insurance. In 2014 the exchange will enroll individuals and small businesses with 50 or fewer employees, most who currently have insurance. The health insurance exchanges were established by the ACA law, also known as the ObamaCare law. Under this law participation in the exchange is optional. However, Vermont is the only state that has made it mandatory that all individuals and businesses with 50 or fewer employees participate, even though Gov. Shumlin’s own administration has estimated that costs will increase by over 18% for businesses that currently buy their health insurance through associations.
        The reason participation is being forced upon Vermonters, who might like to keep the policies they have, is that the Shumlin administration wants to get access to ObamaCare federal subsides that become available only to individuals in the exchange. By making health insurance costs higher for businesses, the hope is that employers will drop coverage for their employees, without penalty. By dropping coverage, employees become individuals and may qualify for the ObamaCare subsidies. You see if employees continue to get health insurance through their employer, they will not qualify for the subsidies. The more subsides that Vermont can capture, the more funds they hope to roll over into the single payer system. The hope is that these captured federal subsidies can go on in perpetuity to support the financing of the single payer system. With the growing federal deficit, that hope may not be a reality. Currently the exchange will start in 2014 and the plan is to switch over to the single payer system by 2017, if not sooner.

    • Dan McCauliffe :

      Mr. Vignola,

      The health care exchange is a temporary place to buy health insurance starting in 2014. Vermont will discard the exchange on or before 2017 when the plan is to move to a single payer health care system. You will be interested to learn that the Shumlin administration is seeking a waiver so that Medicare and Medicaid patients can be rolled into the single payer system with most other Vermonters. What this means to you and your wife and other Medicare patients is uncertain, as the details of the single payer plan are still largely unknown.

  2. Dave Bellini :

    “EHB approach to be reviewed by the federal government in 2016
    –leaves open the possibility of an exponential increase in state costs in 2016″

    From the GMCB website August 9, powerpoint summary.

    So can anyone tell me the plan when the FEDS pull the plug on funding in 2016? How much will folks pay after the “exponential increase in state costs”?

  3. Tom Licata :

    Anne Galloway writes: “The program is for people who have no insurance.” This is a false statement. Less than 10% of Vermonters lack insurance and the state of Vermont wouldn’t be going to all this trouble for such a small population-set. Anne’s cheerleading belies Vermont Digger’s biases. The state of Vermont’s collectivism will deliver impoverishment and misery to its people. Churchill said it best: “Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.” Anne, as you know, you find comfort in your media brethren (WCAX, Times Argus, Burlington Free Press, et al.) but it will not ease the coming pain and suffering to which you will have been a part of.

    • Bob Johnson :

      And yet the countries with the highest standards of healthcare, best infrastructure, best education and longest life expectancies are… wait for it… ultra-socialist!

      Does getting everything wrong ever make you stop and question your assumptions?

      Or to you just keep drooling at the thought of a coming apocalypse that never seems to get here?

    • David Bell :

      ” Less than 10% of Vermonters lack insurance and the state of Vermont wouldn’t be going to all this trouble for such a small population-set.”

      I’m sure the idea of compassion is utterly foreign to you, and so the notion of going to some trouble for those in need is beyond your grasp.

      Thankfully, the same is not true of the Vermont state government.

      • Tom Licata :

        “They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.” – Benjamin Franklin

        • David Bell :

          Yes, the liberty to welsh on paying medical bills, driving up the cost for the rest of us is truly a freedom worth dying for.

          Almost as much as the freedom to watch the poor die of treatable illnesses.

  4. Jeanne Keller :

    Some facts, folks:
    1. The Exchange is not just for the uninsured. The Exchange plans will be available to any individual wanting insurance who is not already covered by a government plan like Medicare or Medicaid. Exchange plans will be available for small businesses (defined as having 50 or fewer employees). So, because Catamount Health will be eliminated in 2014, everyone now on Catamount can go to the Exchange. Anyone now buying individual insurance can go to the Exchange. Small businesses now purchasing through the Chamber, BRS or other associations, can buy through the Exchange if they want to continue offering coverage. But if you are covered by Medicare or Medicaid, you would have to drop that coverage to buy through the Exchange. “Medi-Gap” policies will not be available on the Exchange, only full medical insurance and dental insurance.
    2. Subsidies in the form of federal tax credits will be available to individuals who buy insurance thru the Exchange, on a sliding scale up to 400% of the federal poverty level. Subsidies are not available to people who are in the Exchange because their employer sponsors an Exchange plan.
    3. At this point, the local carriers intending to participate on the Exchange appear to be the new Vermont Health CO-OP, Blue Cross and Blue Shield of Vermont and MVP Health Plan. It is not clear whether CIGNA will offer plans on the Exchange, because they are not currently selling plans in either the individual or small group markets.
    4. The Exchange is NOT mandatory. No one will be forced to buy insurance. As the US Supreme Court recently decided, the ACA is allowed to impose a tax on people who choose not to buy coverage. However, if you do want to buy insurance and you are an individual or small group, the Exchange will be the only place where you can buy insurance. That was decided by the VT Legislature.
    5. The potential “exponential increase” in the cost of the Exchange plans to the state in 2016 has nothing to do with the Green Mountain Plan. It is because up until 2016, the feds have agreed that the federal subsidy would include the added cost of any state insurance mandates included in the Exchange health plans. In 2016, the feds could decide to set a more limited federal Essential Benefit Plan design to define what is subsidized, and if Vermont wanted to continue with the BCBS benefit model, which contains many state benefit mandates, the state would have to pick up the cost difference for the subsidies. This is what is in the ACA requires, but the feds, in their Exchange rules, punted that day of reckoning to 2016, and are allowing states to include mandates in their benefit package.

    • Dan McCauliffe :

      Jeanne,
      I agree with your statement: “However, if you do want to buy insurance and you are an individual or small group, the Exchange will be the only place where you can buy insurance. That was decided by the VT Legislature.”
      In other words, individuals and small businesses with 50 or fewer employees that want to purchase health insurance are not allowed the option to purchase it outside of the exchange, as permitted by the ObamaCare law that established the exchanges. Instead they are forced to purchase it in the exchange, where for many the cost will be substantially higher than it would have been, had they been allowed to purchase health care outside of the exchange.
      Vermont is the only state that forces individuals and small businesses to purchase their health insurance through the exchange. I think it is a bit misleading to say they are not forced into the exchange because they have the option to not purchase any health insurance. Forgoing health insurance coverage is not really a viable option and inadvisable for good reason.
      Has anyone questioned the legality of Vermont outlawing purchasing health insurance outside the exchange, as this limitation is not in compliance with the ObamaCare law?

  5. Robert Lewis :

    Why do these “fixes” sound like more layers of the same dysfunctional and confusing crap that we already have?

  6. walter carpenter :

    “Instead they are forced to purchase it in the exchange, where for many the cost will be substantially higher than it would have been, had they been allowed to purchase health care outside of the exchange.”

    I am not sure for who the cost would be higher, except those on Catamount or Vhap, which are regulated by income eligibility. An individual policy for someone who wants to buy health insurance on their own now is about $400 a month premiums with a $5,000 deductible, or about ten grand a year before one can even use the insurance. At least within the exchanges the premiums are subsidized and one is no longer at the mercy of insurance companies, like a friend of small business-ower friend of mine in Vermont who had the plan he was on cancelled arbitrarily. His premiums jumped higher to something like $900 a month (family) and his deductibles increased under the new plan he was put on.

  7. Karen McCauliffe :

    Walter, the coverage is much higher for some businesses that previously purchased their insurance through associations and now are forced into the exchange to continue covering their employees and insuring themselves. The premiums will go up for them over 18%. The Grocers Group thought that their premiums would go up over 40%. Vermont was ranked 48th (best to worst) in the 2011 Small Business Survival Index (released Nov 2011). We will be off the charts for small business survival index in this state!!! Interesting to note, neighboring NH has a rating of 33rd. Plus everyone does not have subsidies in the exchange, some of individuals forced into the exchange are not eligible for subsidies. Also if the business owner continues to cover their employees then there are no subsidies.

    There is no individual liberty and freedom for those forced to purchase our insurance in the exchange. Not the individual liberty and freedom that exists in all the other states. If it was truly about the concern for all Vermonters then the employer should have been able to offer coverage out of the exchange and let the employee decide to accept what the employer offers or jump into the exchange.

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