Special Report: Charting implementation of the Affordable Care Act in New England

In this article, VTDigger assesses the impact of the Affordable Care Act in the six New England states. Our analysis is based on spending and enrollment data for federally qualified health plans.

The landmark federal health care law recently marked its fourth anniversary, and online insurance marketplaces were launched six months ago.

ACA1_Earmarks

Federal funding for implementing the Affordable Care Act was made available to states through implementation grants. The grants were earmarked for states, which are billing the feds for expenses as the money is spent.

Significantly more cash was made available to states that chose to build their own online insurance marketplaces, known as exchanges, than for states that opted to use the federally built exchange.

Four of the 14 states plus the District of Columbia that chose to build their own exchanges are in New England. Vermont, Connecticut, Rhode Island and Massachusetts all received earmarks of up to $100 million.

The above chart shows a snapshot of how much each state spent the federal money. The figures were collected from March 7 to March 10. The per-head spending figure reflects how many people had enrolled in health coverage through the state’s online marketplace at that time.

The return on spending varies widely, with Connecticut’s exchange being touted as a national model. Massachusetts is among the states with the least to show for its efforts.

Despite spending $63 million of its $180 million earmark, 62,000 Bay State residents had temporary coverage, as of early March, according to a spokesman for Massachusetts Health Connector, the state’s exchange.

The spokesman said $69 million of Massachusetts’ exchange funding was slated for the Connector website, but only $15 million of those funds had been spent as of early March. Since the figures were collected, Massachusetts dropped the tech firm responsible for the website, CGI — the same company that is responsible for Vermont’s exchange sites.

Of Vermont’s $171 million earmark, $54 million was set aside for the initial creation and launch of the Vermont Health Connect website. Vermont’s contract with CGI is worth $84 million; $30 million of that sum is for ongoing maintenance and operation of the site during the first two years of operation. The maintenance and operational money will be built into the state budget over the next three years.

The latest figures show Vermont has paid CGI more than $19 million for a website that still lacks significant functionality.

Rhode Island has also struggled to get its exchange functioning properly, and lawmakers in the Ocean State were at one point pushing to scrap their website and go with the federal healthcare.gov website instead.

Enrollment figures used to calculate the per-head spending figure include people that sought coverage through the exchanges and discovered they qualified for Medicaid as part of that program’s expansion through the Affordable Care Act.

The figures do not include populations in Vermont and Massachusetts that were automatically transitioned from state-subsidized health insurance programs to Medicaid. In Vermont, roughly 35,000 people formerly on VHAP or Catamount are now on Medicaid. The numbers also do not include people enrolled in exchange-based plans from the small group market.

Vermont is the only state to require businesses with 50 or fewer employees to purchase coverage through its exchange, but small businesses have been unable to use the Vermont Health Connect website. More than 30,000 Vermonters have coverage because the two private insurers offering plans through the exchange picked up the slack for the state and enrolled small businesses directly.

Vermont’s insurers on the exchange have suggested that expenses related to direct enrollment might be built back into their premium rates in 2015.

New Hampshire, Maine and 34 other states went for the federal option. New Hampshire has spent more than $4 million of $8.6 million earmarked for implementation of the Affordable Care Act. Republican lawmakers in the state have blocked appropriations of additional federal funds, according to a spokesman for Democratic Gov. Maggie Hassan.

Maine has spent $4.4 million; a spokeswoman for MaineCare was not able to provide a figure for the state’s available earmark. Tens of thousands in state money is included in the total.

Comparing spending among the New England states that built their own exchanges against those who used the federal exchange website is an apples to oranges juxtaposition. Maine and New Hampshire rely on healthcare.gov, which the feds have spent hundreds of millions to build and fix after a rocky rollout.

In addition, the New England states that built their own exchanges accepted the federal Medicaid expansion, and, as a result, tens of thousands of residents in each state are newly enrolled in the program.

Maine’s Republican Gov. Paul LePage is vehemently opposed to the expansion, and Democrats there have waged an unsuccessful campaign to do so in the face of his opposition. The Republican-controlled New Hampshire Senate recently approved a partial Medicaid expansion, which is likely to sail through the Democrat-dominated House.

The federal government is covering the entire cost of the Medicaid expansion in its first three years, and will cover 93 percent of those costs between 2014 and 2022, according to the nonpartisan Center on Budget and Policy Priorities, a D.C.-based think tank.

In a recent segment on “Fox News Sunday,” Gov. Peter Shumlin sparred with Republican Gov. Scott Walker of Wisconsin over the decision to accept or reject the expansion.

Shumlin said Republican governors who rejected the expansion are denying tens of thousands, and in some cases hundreds of thousands, of residents access to affordable health coverage in order to make a political point.

Walker defended his rejection of the Medicaid expansion. He said he was shielding his state from risk, because Congress, with the blessing of a new administration, could enact entitlement reform in the future that would rescind funding for the expansion and leave states that accepted it on the hook for the cost.

ACA3_Subsidies

This chart shows the percentage of people who signed up for health coverage through the exchanges in each state that will receive a subsidy to reduce the cost of that coverage.

The data comes from the U.S. Department of Health and Human Services and was collected through the end of January. The feds began publishing monthly reports in February with figures from the previous month.

The report released in March provides far less detail, and does not include state-by-state percentages for the number of enrollees qualifying for subsidies. However, figures from mid-March presented to lawmakers by Mark Larson, commissioner of the Department of Vermont Health Access, show that the percentage of people qualifying for subsidies in Vermont has not changed appreciably since the January figures collected by HHS.

Nationally, 83 percent of people are qualifying for subsidies compared to just 54 percent in Vermont. The next lowest New England state is Maine, which has the most similar population and age demographics to Vermont, at 72 percent.

A lower percentage of Vermonters are qualifying for subsidies, according to Larson, because Vermont Health Connect is the only place individuals can purchase insurance, while people in other states can go elsewhere to purchase ACA-compliant plans.

“Basically, our denominator, or pool of people using the exchange, is relatively larger than in other states,” said Larson in an email. “It’s important to note that the majority of Vermonters who are using Vermont Health Connect to get an individual/family plan are enrolling in Medicaid. While Medicaid is very low cost, it is not included in the measure of who is getting subsidies.”

However, the same is true in other states that accepted the Medicaid expansion.

ACA2C_Age

This chart shows the age-demographics of exchange enrollment in the New England states and nationally. It was made using the same, more detailed data HHS presented in its first report with data through the end of January.

There has been much discussion and speculation nationally about whether the insurance risk pools created via the exchange marketplaces could sign up enough so-called “young invincibles,” or people aged 18-34, who believe themselves healthy and therefore disinclined to pay for health insurance.

Nationwide the percentage of 18- to 34-year-olds enrolling in coverage through the exchanges is 25 percent. In Vermont its 20 percent, lower than any of the New England states except Maine, which brings up the rear at 19 percent.

Many argue the viability of the individual health insurance markets on the exchange is predicated on enough young people purchasing insurance to offset older less healthy enrollees, who are more likely to seek medical care.

However, that narrative doesn’t hold in Vermont, according to Larson.

“Frankly Vermont is different in this conversation,” he told lawmakers, when asked if he was concerned about the demographics of the state’s enrollees. “Vermont Health Connect is the individual and small group market. If we have transitioned the market that was in the past, the Vermont Health Connect market is as viable as last year’s market.”

To ensure Vermont Health Connect had a viable individual market, Vermont made a policy decision that individual plans would only be available through the exchange.

If the state had not, it’s possible Vermont’s aging population would’ve exposed insurers offering coverage through the exchange to unacceptable levels of risk.

This article was updated at 9:49 a.m. on March 31, 2014.

Morgan True

Comments

  1. Bryan Bouchard :

    Unfortunately, Scott Walker may be right!

    • Tony Redington :

      And it may rain tomorrow–does one deny medical care for the next three years to tens of thousands of your citizens because on the fourth year the federal government may not fulfill its obligations in the Medicaid program which dates from 1964?

    • Frank Davis :

      Unfortunately, Scott Walker’s action may continue to result in 3 or more years of unnecessary pain, suffering, lack of treatment, lack of prevention of serious medical conditions, and preventable early deaths for thousands of people who cannot afford the level of health care he takes for granted. But then he may save the taxpayers some money, or in the long run will cost them even more.

  2. It appears to me likely that VT and ME would benefit from a New England wide plan and perhaps the other four states would also. The reason is the much larger pool would provide actuarial benefits.

  3. I’m curious to know who are the people in the 65 and over category. My understanding is everyone 65 and over qualifies for Medicare and supplemental insurance can not be bought through the exchange. So who are these folks?

    • Morgan True :

      Hi Paul,

      There was one percent of enrollees in RI and CT who were in the 65+ category. I believe you are correct that supplemental insurance in not available on Vermont’s exchange, but I don’t know if that’s the case in other states.

      Either way, the 65+ group is not statistically significant, and because it appears to be causing confusion, we’re updating the chart to remove that grouping.

      The largest age demographic seeking insurance on the exchanges are those 55-64, which makes sense as they are just shy of Medicare eligibility and are the most likely age group on the exchange to need medical care.

  4. Andrea McAuslan :

    I had the same observation and question about the over 65 group, and hope someone can answer that! I also had another area of concern.

    I was surprised at the percentage of people eligible for a subsidy. However, the web-based application is incorrectly denying folks a subsidy. I am eligible for one, and three reasons came up as to why I was not getting one. I neglected to print the screen, and by the next day, the website would not allow me to access that page, so I could not tell the worker I had on the phone exactly why I was denied. I do remember that one of the reasons was that I had answered the question asking if I would be filing a tax return for 2014 (which, in all honesty I will not know the answer to until the end of 2014) with a “no.” No tax return, no subsidy. Yet on the home page of Vermont Health Connect, at one time it clearly stated that a tax return was not required (that is no longer there, I believe). Hmmm. Unfortunately, the government does not allow me to “correct” my application and it is a long process to get it changed. After it is corrected, I will NOT be able to get a refund of the money I overpaid in order to insure that I have insurance as of tomorrow. Instead, I am supposed to wait and get a tax rebate next year when I file my income taxes.

    If you were denied a subsidy and you think you should have received one, PLEASE speak up for yourself and get this addressed. I intend to pursue my situation until I am satisfied (that is, I get a refund before next year). If you don’t know if you should have received a subsidy, check on the website. You do not have to identify yourself to check the estimator.

  5. Jennifer Brown :

    Most 18-34 year old invincibles cannot afford $350.00 +/- per month for coverage that has little or no benefit with such high deductibles. Add in student loans and housing, and they’re screwed. Make too much for subsidies and too little to afford it.

    Yes, some of you will say–if they’re in an accident or need surgery, they’ll be covered. Yes, that is true.-but the only concesson here.

  6. Karen McCauliffe :

    Paul’s question above…”I’m curious to know who are the people in the 65 and over category. My understanding is everyone 65 and over qualifies for Medicare and supplemental insurance can not be bought through the exchange. So who are these folks?”

    Paul, I also was surprised to see the over 65 group in the exchange numbers.

    Green card holders can purchase Obamacare exchange insurance if not eligible for Medicaid or Medicare, but just that would not explain Vermont’s numbers. Federal taxpayers do subsidize the green card holders if they qualify for subsidies.

    If you have not worked 4o quarters or approximately 10 years then you have to pay for Medicare Part A. What I found next with my research was a shocker! These folks that have worked less than 10 years can then decide to pay for Part A Medicare OR enroll in the Obamacare exchange and if they qualify receive federal subsidies!

    I wonder who would have not worked at least 10 years by the time they are not 65? The disabled are already dual eligible and taken care of by that system. Are some of them “trust funders” able to not work their entire life and then get a sweet deal on the Obamacare exchanges on the backs of the working class?

    “Individuals who qualify for Medicare because they worked for a total of 40 quarters — 10 years — are not eligible for Obamacare. U.S. citizens and lawful permanent residents at least age 65, who have been here five years, may buy into Medicare if they don’t have the work history. Individuals who qualify to buy in to Medicare can choose to participate in Medicare or, buy Obamacare insurance.”

    http://www.nydailynews.com/new-york/citizenship-now/medicaid-medicare-obamacare-article-1.1480037

    This is the Medicare costs based on the quarters that were worked so someone that has not worked the 40 quarters could register in the Obamacare exchange to save the Part A Medicare premiums…

    “The amount you pay for the Part A premium in 2013 is $243 a month (if you have 30 to 39 work credits) or $441 a month (if you have fewer than 30 work credits). These amounts usually increase each year. If you continue working until you’ve earned 40 credits (about 10 years’ work in total), you’ll no longer be required to pay Part A premiums.”

    http://www.aarp.org/health/medicare-insurance/info-04-2008/ask_ms__medicare_9.html

  7. Karen McCauliffe :

    Here is another source that Obamacare exchange plans can be sold to the over 65 person that has not worked the 40 quarters (approximately 10 years) to qualify for Medicare.

    “Exchange plans can be sold to the very small number of people who currently pay Part A premiums; however, an exchange plan probably will ultimately cost more. And should they decide later to rejoin Medicare, these people may be subject to late enrollment penalties.”

    http://newoldage.blogs.nytimes.com/2013/10/11/q-a-medicare-and-the-insurance-exchanges/?_php=true&_type=blogs&_r=0

  8. Wendy wilton :

    Maine was smart…using the federal exchange at low cost to Maine, not on the hook for expansion of Medicaid if the Feds pull the plug, and they made the exchange voluntary with options to buy insurance across state lines. Vermont should have done the same and put our millions into fighting heroin instead.

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