The Shumlin administration plans to reveal legislation and multiple reports on Tuesday making suggestions for how the state should proceed to create a Health Benefits Exchange.
The new bill will answer two longstanding questions: which employers will be in the exchange and whether insurance will be available outside the exchange for the small-group market.
The exchange, mandated by the federal health care reform law, will put insurance plans for individuals and the small group market in one place. The oversimplified analogy is a travel Web site only for health insurance.
What this means for individual states is still up in the air. Each state must have an exchange by 2014, or the feds will create one for them. Act 48, the state health care reform law requires the state director of health care reform to address both the insurance issues by Jan. 15.
Robin Lunge, Vermont Director of Health Care Reform, told lawmakers this week, the proposal would recommend that insurance only be sold inside the exchange for individuals and small groups.
“The biggie that most people will be clamoring for is how we move forward with the insurance market,” Lunge said.
Questions also remain about what employers will be drawn into the exchange. The federal law allows states in 2014 and 2015 to define “small employers” as those with 50 or fewer employees or those with 100 or fewer. Because the administration has stated publicly its intention to bring as many people as possible into the exchange, the rumor around the state house is that the proposal will include the larger businesses.
Lunge said she could not divulge the administration’s decision until next week.
The 50 or 100 question has been a lingering issue throughout the health care reform effort.
Sens. Hinda Miller, D-Chittenden, and Vince Illuzzi, R-Essex-Orleans, proposed an amendment to last session’s health care bill to only include employers with 50 employees or fewer. It failed, and they are trying again this year.
“We don’t want to disrupt our businesses,” Miller said.
Miller, who owns her own business, said only bringing in the smaller employers would allow the state to provide health care coverage for those who need it most without disrupting the businesses that already have systems in place.
The bill has garnered support from the business community.
Betsy Bishop, president of the Vermont Chamber of Commerce, said keeping the smaller employers in the exchange will allow the state to work out the kinks in a brand new system, without dismantling the current insurance market — a theme in the Illuzzi/Miller bill.
“Let’s build a system we know that works and add to it,” Bishop said.
She emphasized that businesses want a good exchange, and started with a smaller market will be a better bet.
Jeanne Keller, a health policy analyst and lobbyist, wrote a post this week on the blog “Toward Evidence-Based Healthcare Reform,” outlining arguments for smaller rather than larger employers in the exchange. Keller argues that bringing the larger employers into the exchange will require them to subsidize the smaller ones, whose costs tend to be higher. Bringing in the larger businesses would also remove flexibility for those employers and threaten the exchange’s chance of success.
If plans are allowed outside the exchange, Fuller said, people can have better plan designs.
The one-size fits all approach does not work, she said.
Regardless of the administration’s proposal Tuesday, it will certainly not be the end of the matter. The administration still needs to determine what to do about insurance brokers, who larger employers hire to coordinate employee health plans.
“We’re still drilling down on the broker issues, because the feds have been a little cagey about what’s allowable,” Lunge said.
Under the federal law, brokers could not receive a commission selling plans in the exchange — a big money maker. One option, Lunge said, would be allowing them to be “navigators” in the market who contract to help people find insurance plans.
The state is also in the process of defining “essential health benefits,” which insurance companies must cover for policyholders. Under federal guidelines issued in December, states will develop these benefits instead of the feds. The federal deadline is this fall, but Lunge said she hopes to get a plan out sooner.
Clarification: This story states that insurance brokers will not be able to receive a commission selling policies in a health benefits exchange. The federal Affordable Care Act permits the Secretary of Health and Human Services to establish rate schedules for broker commissions in the exchange. A proposed rule by the secretary, however, does not address how brokers in the exchange would be paid. Under federal regulations, states may allow brokers to help people enroll in insurance plans in an exchange. How they will be paid is still unclear.
