Vermont will apply for an extension of its roughly $100 million in remaining federal grants for implementing the Affordable Care Act, state officials confirmed Monday.
Vermont has spent more than $72 million thus far, and state officials have indicated they believe it will take the full $171 million earmark to complete the project.
Four of the 15 states building their own exchanges have already applied for extensions from the federal Centers for Medicare and Medicaid Services and several others told Politico they intend to apply.
Lawrence Miller, chief of health care reform, said “So long as states are making a good effort and are undertaking a responsible path to finish the work, (CMS) is going to continue to be supportive.”
The extensions would not increase the money available for exchanges, and there are no details on how long they could last. However, so-called “no-cost” extensions are common practice with federal grants, according to a CMS spokeswoman.
An extension would allow the state to continue using that money past the Dec. 31 deadline to build core components of its exchange – most notably completing the Vermont Health Connect website. The grants are not to be used to cover operating costs.
But it’s not that simple, Miller said.
If an exchange lacks a basic function, such as allowing users to make changes to their applications – which Vermont’s does – then costs that would otherwise be considered operating costs, such as running a customer support call center, can be partially billed as development costs, according to the guidance the state has gotten from CMS, Miller said.
An extension is “necessary,” he added, and without one, Vermont would likely have to come up with additional money to operate the call center and prop up functions that are eventually expected to be automated.
The administration is not anticipating needing additional state money for Vermont Health Connect in fiscal year 2016 or in the FY 2015 budget adjustment, Miller said.
There are contingencies for using personnel to process changes and renewals through next year, Miller said. The state has already said it would continue to allow small businesses to obtain insurance through the exchange directly through the insurance carriers in the next enrollment period.
“Knowing what we know now, nobody feels comfortable assuming (the remaining work) will get done,” before the end of open enrollment in February 2015, he said, though the state will continue that work.
Under pressure to scrap VHC?
Small states with fewer customers in their exchanges could have trouble covering the IT bills necessary to run a state-based exchange, according to Politico’s report.
Jon Kingsdale, with the Wakely Consulting Group, told Politico that he anticipated pressure on small states to adopt the federal exchange or join “some kind of multistate operation,” but that “state’s with aggressive health care reform agendas are likely to continue to push for local control.”
Kingsdale was not comfortable doing an interview with VTDigger without permission from state officials, as he is currently consulting for the state on health care. State officials did not respond to an email request to interview Kingsdale.
But Vermont is a small state; its exchange has only 67,000 commercial customers, the rest of the 103,000 users are on Medicaid. Of the 67,000 commercial plans people bought, less than half, or 33,000, were purchased using the website – carriers having enrolled the rest.
For example, Washington state, with roughly 12 times Vermont’s population, has 164,000 commercial customers and enrolled close to 600,000 people total in it’s exchange.
Vermont’s intention to provide universal coverage for residents through a single-payer program qualifies its reform agenda as aggressive.
Correction: The fiscal years referred to in which additional state money for VHC were incorrect in earlier versions of this story. The correct dates are FY16 and the FY15 budget adjustment.