The Shumlin administration has fewer than 100 days to open a new Web-based health insurance market for more than 100,000 Vermonters.
With the clock ticking deep into crunch time, the state’s top officials are preparing for the worst — the possibility that the federal and state information technology systems are not ready to support the insurance exchange, called Vermont Health Connect.
“That is the contingency we’re planning for,” said Robin Lunge, Gov. Peter Shumlin’s director of health care reform. “If the Web portal is broken or isn’t usable we could continue to do a paper process. For example, we could have people sign up directly with the insurer.”
Although the exchange is slated to open for business on Oct. 1, 2013, it isn’t until Jan. 1, 2014, when Vermonters who purchase insurance individually or through businesses with 50 or fewer employees are mandated to purchase insurance on the exchange.
Vermont Health Connect will cost more than $100 million to get up and running, and most of those funds are coming from the federal government. When the market is functioning properly, the state’s IT systems should jibe automatically with other state, insurance and federal databases.
The state is planning to print out Vermonters’ information and file hard copies with insurance companies.
From October to January, however, Lunge said the state is planning to print out Vermonters’ information and file hard copies with insurance companies. The administration is asking the feds for extra funding to run this manual filing system, as the state works with various contractors to pull the entire system into place.
“Everybody should be worried about it because it’s a big IT project, but we are doing the best job we can to manage it,” Lunge told the legislative Health Care Oversight Committee on Thursday.
Richard Boes, commissioner of the Department of Information and Innovation, sits on an executive steering committee with Lunge for this project. He joined her for the committee meeting in the House Chamber, and he is confident the exchange, in some form, will be in place by Oct. 1, 2013.
“We will have an exchange up and running in October,” he told the committee. “There are significant risks and issues. They are being tracked, and they are being managed.”
The administration contracted out to Maine-based BerryDunn to review the risks and issues associated with the state’s IT systems. While the administration has a draft report in hand, Lunge and Boes did not know when the final report would be ready and did not release copies of the draft. Boes said that Oct. 1 is an easier federal deadline to meet because the marketplace doesn’t need to be as functional as it does on Jan. 1, 2014.
The deadlines are difficult to meet, Lunge said, considering that the feds released their final guidance on establishing the exchanges less than a year ago.
“We have identified, as have many other states, that the federal timelines are an issue in the technical IT sense: Something that you need to work around, and plan for and mitigate,” she said.
One of the biggest unknowns for many states is whether the feds will be able to meet the deadlines set out in the Affordable Care Act, aka Obamacare.
The U.S. Government Accountability Office issued a report last week, which found the Centers for Medicare and Medicaid Services had not completed crucial elements of the federal exchanges and data hub and were behind the curve on others.
Vermont is one of 17 states creating its own insurance exchange, but the state marketplace would still tie into a federal data hub to digitally determine a Vermonter’s eligibility for subsidies.
“If the federal hub is not ready Jan. 1, we can either have people self-declare their income, because it does get reconciled at the end of the year for the premium tax credits, or we could have people submit verification from a pay check,” Lunge said.
She said later that the Government Accountability Office report applies to the majority of states, which have opted to the federally run exchange.
If the state can get Vermont Health Connect up and running, and the feds are still scrambling to meet deadlines for federal exchanges, the Legislature and the Shumlin administration’s decision to create a state-run exchange could provide Vermonters with a level of stability other states wouldn’t enjoy.
“Part of the consideration (in making that decision) was: Do you want to be responsible for building this system yourself or put this in the hands of the federal government?” Lunge said.
Clarification: Vermont is one of 17 states creating a state-based exchange, and the District of Columbia is also creating its own exchange.
