[G]ov. Phil Scott’s administration has thrown its support behind an individual mandate that would require all Vermonters to buy health insurance.
The announcement, made Thursday by Department of Vermont Health Access Commissioner Cory Gustafson, comes as the House Health Care Committee is poised to vote on a bill that would impose a mandate next year.
Just last week, Scott administration officials had raised concerns about whether an individual mandate was a good idea. But the committee since has revised its bill, which now would allow a “working group” of state officials more time to figure out how to administer and enforce a mandate.
“The administration is supportive of a mechanism to encourage health care coverage,” Gustafson told legislators. “Vermont has had a continued, stable health insurance market, and we’d like to see that continue. I think that this type of mechanism can align with that idea.”
The Vermont individual mandate bill — H.696 — arises from changes made by Congress in enacting a tax overhaul last year. While the federal requirement for buying health insurance remains on the books, the financial penalty for those who don’t comply soon will disappear.
Some worry that will cause many people to drop their health insurance, which could lead to cost increases for those who retain coverage.
A recent study commissioned by the Green Mountain Care Board and the state Department of Financial Regulation said Vermont likely won’t see a major, immediate impact from the loss of the federal mandate’s enforcement mechanism. But the study does predict an enrollment drop and a premium increase for those in the small group and individual insurance markets.
A state individual mandate would combat such changes by requiring all Vermonters to maintain “minimum essential health coverage.”
The original version of H.696 imposed a financial penalty on those who did not buy coverage. The penalty would have been included with annual tax returns.
But that bill caused concern among state agencies including the Department of Taxes and the Department of Vermont Health Access. Officials worried about the administrative and financial burden of setting up a new mandate system; vetting requests for exemptions; and enforcing financial penalties.
On Feb. 22, a Department of Vermont Health Access official told lawmakers that “keeping people insured is a huge priority, but it’s not clear that instituting a mandate at this point is the way to do that.”
The committee’s bill has changed since then, however. The revised legislation establishes an individual mandate as of Jan. 1, 2019, but it does not immediately create a penalty for those who don’t comply.
Instead, a working group of state officials would look at administration and enforcement options and report back to the Legislature later this year. It would fall to lawmakers in the 2019 session to determine the best way to enforce the mandate.
Gustafson said the Scott administration supports that working group concept, though he requested that the working group also consider “alternatives to a standard financial penalty.” It’s not clear what those alternatives might be, and Gustafson said he wanted to leave such deliberations to the working group.
That group will “brainstorm and bring ideas to the table and come to consensus or at least a logical conclusion,” he said.
The Green Mountain Care Board also supports the individual mandate working group, board member Robin Lunge told the legislative committee. She said a group that includes state officials and insurers already has been meeting to discuss federal issues like the mandate.
Officials still were tweaking the language of H.696 on Thursday. Health Care Committee Chairman Bill Lippert, D-Hinesburg, said he expects the committee to vote on the bill Friday.
While the legislation still has a long way to go, Lippert said winning the administration’s support is an important milestone.
“That they’ve come back to the table and said, ‘Ok, we agree that there should be a mandate’ — I think that is significant,” he said.
Rep. Tim Briglin, D-Thetford and the committee’s ranking member, said enacting an individual mandate would be one of several state responses to federal health care policy changes.
For example, lawmakers have enacted — and the governor has signed — a bill designed to counteract federal health care subsidy cuts ordered last year by President Donald Trump.
“There are things that have happened at the federal level that, in my opinion, have pulled the Jenga pieces out of what makes up a stable health care market,” Briglin said.