Lt. Gov. Phil Scott, senators explore alternative to Vermont Health Exchange

Lt. Gov. Phil Scott led a mini fact-finding mission to Rhode Island on Monday to learn more about components of the Connecticut health care exchange that could help Vermont save money.

The cost of fixing the dysfunctional Vermont Health Connect website will be roughly $200 million, and maintaining the state’s health care exchange on an annual basis will be about $51 million a year.

Gov. Peter Shumlin last month said he will pull the plug on the customized website if contractors can’t develop proper functionality for the site with deadlines at the end of May and in October. Since then, various alternatives have been floated, including moving the state’s system to the federal exchange.

Scott and lawmakers are looking for ways to cut annual costs associated with the exchange, which could have an ongoing impact on the state’s budget. To that end, Scott brought along Sens. Tim Ashe and Jane Kitchel for an exploratory meeting with Connecticut officials who recently helped Maryland save money on its exchange.

The typical cost of maintaining exchanges in other states is between $20 million and $30 million.

Scott, Ashe and Kitchel are interested in exploring a regional effort to improve Vermont’s exchange. Scott learned about Connecticut’s interest in sharing exchange components at a recent lieutenant governor’s meeting.

“I was thinking about whether there could be another avenue we could take if our exchange doesn’t meet expectations,” Scott said. “Maybe there’s another approach rather than the federal system. Maybe there’s a way to work with other states.”

Nancy Wyman, the lieutenant governor of Connecticut, explained that her state’s exchange program has components built by Deloitte that could be used by Vermont, including the “shop” or web marketplace for small businesses that buy into the exchange. Vermont has yet to build this portion of its exchange. Contractors for the state are still working on building basic functionality for the Vermont Health Connect website. (Anya Rader Wallach, who had been involved with the Shumlin administration’s health care reform efforts but now serves as the head of the Rhode Island exchange, was also at the meeting.)

In addition, it’s possible that Vermont could save money by bidding out its call center service with other states that use the vendor Maximus.

Kitchel compared a more regional approach for the exchange to the state’s adoption of the food stamps debit card known as an EBT some years ago. Vermont worked with Maine and New Hampshire to develop the system, which relies on technology and interfacing with financial institutions.

“For one state to do it by itself wasn’t feasible, but three states pooling resources made it manageable,” Kitchel said.

Ashe said it was helpful to see what other states are doing. “I think it raised questions more than it provided answers, but there are opportunities for potential savings by working together with other states and that seemed possible,” Ashe said. “We don’t know all the complications, but things like call center contracts particularly if we are using the same vendor, might be opportunities.”

Last year, Mark Larson told the Senate Finance Committee that the exchange would cost the state $14 million a year. Ashe and others on the committee were aghast at this year’s $51 million price tag.

“So then to come back this year and have $26 million more, that’s the piece in terms of fact finding we need to be doing that kind of due diligence,” Ashe said. “If you just think about our budget gap, some people say we have all these structural spending problems but if you think about it, we’re losing $59 million a year on Internet sales taxes, and then you’ve got a $12 million jump in cost of operating exchange. That’s not a structural problem, that’s a technological fiasco.”

Scott said he had a debriefing with Justin Johnson, the secretary of the Agency of Administration, and there is interest from the Shumlin administration in exploring the Connecticut model further.

“If the governor truly does pull the plug, we have to consider all the options and I want us to be at the table so we can to go in a direction that’s beneficial in the long run,” Scott said. “Maybe there is nothing there for us, but nothing ventured, nothing gained and more information is better in these times when we have to be realistic about the fact that our exchange isn’t functioning and hasn’t been from the beginning and there is a real possibility we’ll need to do something else.”

Anne Galloway

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13 Comments on "Lt. Gov. Phil Scott, senators explore alternative to Vermont Health Exchange"

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Nancy Fried
1 year 4 months ago
Finally some real leadership, thank you LT. Governor and Senators for your efforts. Getting away from the mentality that Vermont always has to be first and a leader of the nation needs to go. What, do we really think everyone outside the borders of Vermont are dumb and have no good ideas or successful programs? Then why do they have successful health programs for less than half the cost of Vermont’s fiasco? We need to learn, or be willing to learn, from others successes. It is very refreshing to see some in the Legislature are willing to explore this approach.… Read more »
Willem Post
1 year 4 months ago

Nancy,

Why check with Connecticut regarding health care websites?

Next door New Hampshire opted for the federal site, as did almost all other states, at minimal cost.

Vermont’s healthcare “gurus”, with self-discredited Gruber advising the way, are leading Vermont down the drain.

The Legislature is doing some innocent, naive, “helping out” by raising taxes to keep their folly going ad infinitum.

It took a Republican Lt. Governor to finally do something, as nothing of substance and realism can be expected from the other side.

Brian Scott
1 year 4 months ago
There are a lot of numbers thrown around when comparing different state exchanges. The real truth is that very few states have set up exchanges the same way that Vermont has. Medicaid eligibility is a larger piece of the exchange here than the non-subsidized plan part. We are often comparing apples to oranges when we look at what a sustainability budget is for other states compared to VT. One thing every article I’ve seen fails to mention is that Vermont is required by law to provide a system for Medicaid enrollment and determination. If the state moves to the federal… Read more »
Richard Marvel
1 year 4 months ago

Do you have a source for this? I’m interested in finding out more informaiton.

Brian Scott
1 year 4 months ago
http://dvha.vermont.gov/budget-legislative/sfy201602042015.pdf Page 92 is the VHC operations budget (not the $200M federally funded DDI build/repair). When you look at the first column, you’ll see the FY16 broken into its 2 components. The VHC column is all services that are not Medicaid eligible, which means the part of the exchange that caters to the private insurance market. The GC column refers to the “global commitment” dollar, which is essentially a Medicaid eligible dollar that is split around 45/55 state/fed. Those Medicaid services are what the state is required to do under federal law. I don’t have time to research the federal… Read more »
Willem Post
1 year 4 months ago

Brian,

Vermont is supposed to be marching towards a socialist healthcare set up. That is the reason for the different website.

Vermont’s healthcare gurus lobbied for it in Washington, and Washington bureaucrats believed their fantasies, and Vermont tax payers get hosed AGAIN.

Kathy Callaghan
1 year 4 months ago

I’m glad somebody finally stepped up and did this. If we had waited for the Shumlin administration to do it, it probably never would have happened. I’m glad Tim and Jane went, and I applaud Phil Scott for his leadership.

Finally – some leadership.

Tom Sullivan
1 year 4 months ago

Thanks Governor Scott for your leadership. Oops.

Elise Eaton
1 year 4 months ago
I agree with Nancy Fried. The egos of many in government are so inflated it’s affecting their brain functionality. I grew tired of the Vermont “me first” mentality long ago. Rather than focus on what’s gone so wrong for too long with health exchange, I too thank Lt. Governor Scott for taking a SENSIBLE step forward. I do not know Senator Kitchel. Senator Ashe I’ve had the pleasure of talking with about animal advocacy among other topics. His head is on straight, his eyes and ears are wide open, and thank goodness he’s one of the fact-finding missionaries. Positive change… Read more »
1 year 4 months ago
Folks, This is not what it seems. RI is looking to save $24 m and the RI Legislature wants to go to the federal exchange. CT wants to sell services to VT. CT and RI both have working exchanges and they have worked since the launch on Oct 1, 2013. CT went into the “Exchange Consulting Business” when so many state exchanges failed to work and CT’s worked. They’ve made it a revenue generator for their state. Senators Ashe and Kitchel are on the right track and asking the right questions. Hopefully they and their respected committees will have the… Read more »
Steve Cairns
1 year 4 months ago

As a tax preparer, I am appalled at the number of my clients who have attempted to get insurance from the exchange in 2014, experienced many problems and ultimately gave up.

Many others who renewed their insurance in 2015 haven’t been billed yet and are fearing that they will have to pay 4 months at once or loose their insurance.

Others have had payments made in one month applied to other months, etc., etc.

The exchange is still woefully dysfunctional.

1 year 4 months ago

I also applaud this bipartisan effort. Well done!

Helen Black
5 months 14 days ago
This is absolute chaos. Why are Vermont officials scrambling to find a way to plug up the holes in the scuttled heap that this health exchange is. People don’t want the health exchange, people want health care. It seems to me that all the gymnastics people are doing to try to “save” tax payers money could be avoided by not making them give it to private health insurance companies anyways. The whole point of the ACA was to mandate that we should all have health insurance. How, may I ask, is paying private health insurance companies going to subsidize anyone… Read more »
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