Editor’s note: This commentary is by Hayden Dublois, of Manchester, who is an economics student at Middlebury College, and a political commentator and strategist.
[O]n April 14, 2015, Vermont State Auditor Doug Hoffer released a concerning — or rather, a jaw-dropping — report on the current state of Vermont Health Connect, the state of Vermont’s health insurance exchange. The report highlights the difficulties of the exchange that date back to its initial launch. In my opinion, the series of administrative failures plaguing VHC and other aspects of state government didn’t just “fall out of the sky.” In fact, they are the result of an underlying common factor: an utterly incompetent administration. But before making that argument, it is imperative to see just how problematic state government has been over the last few years.
The problems with Vermont Health Connect began with technical issues and delays in getting it up and running in 2013. The initial enrollment deadline was extended by Gov. Shumlin by four months to compensate for the website glitches. However in January 2014, before the new March 31, 2014, deadline had arrived, the online process for small business was in such a poor state that officials told businesses to enroll directly with insurance companies, thereby bypassing the exchange altogether. In the 15 months since then, difficulties continued to plague VHC, including allegations that (former) Commissioner of the Department of Health Access Mark Larson had misled the House Committee on Health Care regarding the website’s security vulnerabilities. Eventually, Larson resigned, likely due to the mounting difficulties surrounding VHC.
Another devastating blow to VHC was delivered just recently in the form of Auditor Doug Hoffer’s report. Apparently, the state of Vermont has paid VHC’s processing firm, Benaissance, more than half a million dollars to make sure small business premium payments were transferred from the exchange to carriers. The problem is that the previously-mentioned decision made in January 2014 had small businesses bypass the exchange altogether! The state has been paying Benaissance for a processing function that hasn’t existed for over a year. More frightening is that Chief of Health Care Reform Lawrence Miller had no idea of this oversight until the release of Hoffer’s report. On top of that, the report indicates that the state has no current plans on how it will implement the small business portion of the exchange. And that’s just the tip of the iceberg.
The report suggests that despite the switch of tech firms (from CGI to Optum), website functionality continues to plague the exchange. Technical dysfunctions have created a backlog of over 7,000 “change of circumstance” requests, where many Vermonters are unable to update critical account information. Numerous customers have received delayed care and have been billed incorrect amounts. Security weaknesses and contract deficiencies raise additional concerns about the functionality of VHC. And now, Blue Cross Blue Shield is pressuring the state to fork over millions in premiums that are past due. VTDigger puts it best: “A year and a half after VHC launched, the report shows a management structure that is still in flux, contracts that lack performance metrics or financial penalties, ongoing security shortcomings and an unsustainable reliance on expensive and inefficient manual processes.”
These oversights are the fault of an administration that is incompetent: an administration that fails to oversee contracts, that has failed to implement a health exchange despite numerous delays and multiple website contractors, and that is dishonest about its knowledge of state revenues.
While the VHC troubles are inexcusable, they don’t stand alone when it comes to the long list of administrative failures that have racked up under the Shumlin administration’s watch. In a memo issued this past February, Hoffer also suggested that health care adviser Jonathan Gruber — whose economic models were intended to determine the projected impact of single-payer health care that the state was considering — over-billed the state and overstated hours on numerous invoices. If the Gruber documents are taken literally, they imply that the one research assistant working on the project would have had to work 14 hours for 10 weeks to be consistent with the amounts charged in the invoice.
The broader issue of Vermont’s single-payer pursuit is just as troubling. The state of Vermont neglected to abide by its own deadlines to present its financing plans by nearly two years, eventually leading to a state representative from the governor’s own party filing a lawsuit against the administration. Then, conveniently just after the governor’s slim plurality in the recent gubernatorial election, Shumlin abandoned the plan at the last minute — citing cost concerns that many had been pointing out for years.
Outside of the health care realm, the administrative failures are no less prevalent. This past fall, Hoffer issued another report suggesting that the Agency of Human Services had provided insufficient oversight around social-service contracts with outside parties, leading to a mismatching of what was paid for and what services were actually provided. The current $100+ million budget deficit didn’t come out of nowhere either. A few weeks ago, Gov. Shumlin seemed to blame economists for allegedly forecasting an unrealistic 5 percent growth rate from the start of his term in office until just about nine months ago, when they supposedly switched to a 3 percent growth rate. Tom Kavet — an economist hired by the state Legislature — says the administration has been fully aware since July 2013 that the long-term revenue forecast was closer to 3.5 percent. If that statement is true, then the Shumlin administration has known that the 5 percent figures were incorrect for more than 20 months — not the nine months that Shumlin cited.
These administrative oversights aren’t random. They aren’t the consequence of outside factors beyond the control of policymakers. These oversights are the fault of an administration that is incompetent: an administration that fails to oversee contracts, that has failed to implement a health exchange despite numerous delays and multiple website contractors, and that is dishonest about its knowledge of state revenues. The Shumlin administration has become the very definition of a bureaucratic nightmare.
For a moment, put aside your ideological and political views. Forget about your views on single-payer, education financing, land-use laws, budget cuts, and tax increases. At the end of the day, Vermonters of all political affiliations recognize that this administration is utterly and totally incompetent, regardless of the governor’s policy pursuits and positions. While Gov. Shumlin has attempted to define his governorship as a pursuit for health care reform, drug treatment, and education, he’ll likely be remembered for the administrative failures that continue to affect the lives of everyday Vermonters.
