The U.S. Department of Health and Human Services granted the state of Vermont conditional approval to operate its health benefit exchange, Vermont Health Connect.
The approval means Vermont is in compliance with federal regulations. It also means the state is on track to officially open the new insurance marketplace in 2014 and begin enrolling Vermonters in the exchange come October.
Vermont was one of seven states on Thursday to gain federal approval to operate a partially or fully state-run insurance exchange. In achieving this status, Vermont joined 19 other states from across the country. States that are not seeking such approval will default to an exchange created and implemented by the federal government.
A combination of the Affordable Care Act and Vermont law mandate that all Vermonters above 133 percent of the federal poverty line, who do not work for businesses with 51-plus employees, will be required to enter the exchange. That includes roughly 17,000 individuals now covered by the state-subsidized health insurance plans Catamount and VHAP. Without state aid, their out-of-pocket costs would skyrocket under the exchange.
Vermont is one of 18 states that is creating and plans to operate its own exchange. The state must create a comprehensive information technology (IT) system that will cost more that $100 million in less than a year to meet the October deadline set by the Affordable Care Act. The lion’s share of those funds is coming from the federal government, and the state must spend them by the end of 2014.
To build the IT framework for that system, the state has contracted out to the tech giant CGI for $36 million. CGI is helping build the federal exchange as well as marketplaces in Colorado, Massachusetts and Hawaii.