A provision in the federal health care law may mean teachers and other educators will not be in the so-called health benefit exchange insurance market in 2014.
Critics say this is unfair.
According to the Department of Vermont Health Access, 30 plans in the state in 2010 qualified for “grandfather” status under the federal health care reform law. Grandfathered plans are exempt from some new consumer protections and may not be included in the exchange if they continue to offer the same plan as they have in the past.
One such plan is through the Vermont Education Health Initiative (VEHI), a large, nonprofit purchaser of health care plans for school employees. The plan covers some 40,000 people, including teachers and other educational professionals, their families, and retirees.
Critics say it is unfair that groups like educators will be allowed to be outside the exchange while individuals and businesses with up to 100 employees will be required to be inside.
“Why give one group the potential to let some people stay out and not others?” said Jeanne Keller, a health policy analyst and lobbyist. “One can only speculate that this is a political and not a policy reason.”
The problem, Keller says, is that the exchange will limit what types of insurance people can buy, and, she fears, it will cost more. Essentially, people on the VEHI plan, could end up with better plans and not have to cover the overhead of the exchange, she said.
“If people resented the teachers before … cowabunga,” Keller said.
Under federal law, in 2014 and 2015 states will be required to include employers with 50 or few employees. The proposed legislation, House Bill 559 now in the House Committee on Health Care, proposes that employers with between 50 and 100 employees be “in” the exchange during this time — an option under the federal law. The proposed legislation also mandates that these groups can only buy insurance on the exchange.
The issue, says Sen. Vince Illuzzi, R-Essex Orleans, is that the under-50 employee and 50-to-100-employee groups are required to be part of this marketplace, while the larger over-100-employee businesses and certain plans like VEHI are exempt. Illuzzi proposed legislation that would have limited the exchange to businesses with 50 or fewer employees and allow them to purchase insurance outside the exchange.
Illuzzi said he is concerned that the proposed bill will allow large businesses and some unions to have a wider variety of plans to choose from outside the exchange while individuals and small businesses will be limited to the plans in the exchange.
“It’s not fair because if the exchange is being publicly promoted as a stepping stone to single payer and you give the largest group in Vermont a political pass it wants, how does that public proclamation stand in the face of scrutiny,” Illuzzi said.
The Shumlin administration has promoted the exchange as a way to bring more lives into the insurance risk pool to ensure more stability.
As for the inclusion of teachers in the exchange, Rep. Mike Fisher, D-Lincoln, who sponsored House Bill 559, said there is nothing the state can do about whether they are in or out.
The requirements for grandfathering, Fisher said, are “federal rules that we would have no power of changing or ignoring.”
“Will they be grandfathered on January 1, 2014, has to do with their ability to keep costs down,” he said.
Darren Allen, communications director for the Vermont-National Education Association, said the union is “taking a long hard look along with everyone else” at health care reform.
Allen said educators have worked very hard to achieve what they have in terms of health insurance. He said the contract they have for their health insurance has saved taxpayers millions by keeping premiums for these employees from rising as sharply as other plans.
Whether the 40,000 or so people on VEHI insurance will be in or out of the exchange, it is still an open question that hinges on those plans continuing to meet federal requirements.
For the teachers union, Allen said, “We are very concerned about what this will do to our members and retirees. It’s something we’ve worked decades to build.”
