Gov. Peter Shumlin’s backup plan for the state’s new health insurance market is designed to ensure that Vermonters eligible for the program have access to medical coverage on Jan. 1.
The two key takeaways? 1. Under the new guidelines, if small businesses don’t make a decision by the new year, the insurance companies can make it for them. 2. The state is extending coverage for VHAP and Catamount beneficiaries.
The latter could drive up unforeseen costs for the state budget.
A week after Shumlin announced a contingency plan for the state’s new health insurance market, his commissioner of financial regulation put it into motion. On Thursday, Susan Donegan issued an order defining the parameters of the new options available to 100,000 Vermonters buying health insurance independently or via businesses with 50 or fewer employees.
Vermont Health Connect was set to become the sole health insurance marketplace for these groups on Jan. 1. But technical problems and delays plaguing the Web-based exchange forced the administration to offer new options.
The administration is automatically extending state-subsidized Catamount and VHAP plans for low-income Vermonters who are already enrolled in the plans through March 31.
The Catamount and VHAP programs were initially set to expire at the end of 2013. Mark Larson, commissioner of Vermont Health Access, said he believes the federal government will continue to fund these programs at a 55 percent match for three additional months. That funding is not guaranteed, however.
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Of the roughly 50,000 Vermonters covered by the plans, the state estimates about 30,000 are eligible for Medicaid in 2014. The state will automatically enroll those Vermonters in the Medicaid program.
The remaining 19,000 Catamount and VHAP beneficiaries are eligible for the three-month extension, officials said.
The state did not budget for this scenario.
Larson did not provide cost estimates for the extension.
Deductibles, Deadlines and Defaults
Small businesses have three options.
They can keep their current health insurance plans until March 31, which is the end of the federal open enrollment period for new plans. They can buy one of 18 plans offered on Vermont Health Connect directly from one of the two insurers selling them — Blue Cross Blue Shield of Vermont and MVP Health Care. Or they can default by deciding to make no decision about health insurance by Jan. 1.
The latter option would effectively give insurance companies the power to make the decision for a business. Insurers would choose the plan for employers and employees that most closely resembles their current plan.
“If they don’t make a decision, they would be mapped to the most similar 2013 VHC plan,” Larson said.
Robin Lunge, director of Health Care Reform, said the insurers will send small businesses a letter letting them know what plan most closely resembles their current plan and what the deadline is for extending coverage until March 31. Deadlines could vary.
While only small businesses have the option to buy directly from insurers, Vermonters buying plans independently can also extend their current coverage. If these Vermonters decide not to act on health insurance by Jan. 1, their coverage will automatically be extended through March 31.
To be covered on April 1, Vermonters buying new health insurance independently must do so by March 15 through Vermont Health Connect.
Although the open enrollment period for purchasing plans technically ends March 31, Vermonters will have 60 more days to buy new coverage because the end of their current plans constitutes a so-called “qualifying event.”
Small business employers and employees have tighter deadlines. For new coverage to take effect April 1, employers must choose plans by Feb. 1 and employees must choose plans by Feb. 28.
Deductibles and out-of-pocket limits will reset Jan. 1 for extended plans. What Vermonters spend on health care costs toward those deductibles and out-of-pocket limits can only be applied to another plan offered by the same insurer.
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If an individual reaches his or her $1,000 deductible on a Blue Cross plan by April 1, that payment toward the deductible will only carry forward if he or she buys a new Blue Cross plan. That person’s deductible would be reset if he or she decided to switch from Blue Cross to MVP, or vice-versa.
Lunge said that the two insurers handle contributions toward out-of-pocket limits differently. She encouraged Vermonters extending their plans to call the insurers to find out more about the details. The fact that a person’s current plan might not have out-of-pocket limits could complicate the situation for that person.
Larson says Vermonteres can buy plans through Vermont Health Connect by phone or paper. The state is working with its contractors to make the website’s payment mechanism functional.
“We continue to encourage Vermonters to use Vermont Health Connect,” Larson said. “We believe that there are very clear advantages and opportunities for them.”
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