[M]ore Vermonters signed up for individual health insurance plans this year, but some small employers looked elsewhere for coverage.
Those are the two main highlights from new statistics released this week by the Department of Vermont Health Access. The numbers include 2019 enrollment in Vermont Health Connect, the state’s insurance exchange.
The state’s small group insurance market, for businesses with 100 employees or less, saw a decline of more than 10 percent compared with this time last year. Officials attributed that mainly to employers migrating to newly expanded association health plans.
But state officials also noted that enrollment in individual health plans grew by 0.7 percent. That’s considered a positive development, given that the federal government eliminated a financial penalty for those who don’t have health coverage in 2019.
“The good news in this (individual) data is that we did not see enrollment decline,” said Ena Backus, the state’s director of health care reform.
The stability of Vermont’s individual and small employer insurance market is a key concern for insurers and state officials. The state has a low uninsured rate of just 3.2 percent, a recent Department of Health survey showed, but policymakers worry that number could rise due to regulatory changes.
There’s also growing concern about affordability. The same Department of Health survey found that many insured Vermonters don’t have policies that sufficiently cover current and future medical expenses due to high deductibles and out-of-pocket expenses.
The new state statistics don’t provide much insight into the affordability question. But they do hint at the ways in which governmental policy is and is not impacting insurance enrollment in Vermont.
For example, the relative stability of the state’s individual insurance market is a pleasant surprise for those who were concerned that the effective end of the federal individual mandate would cause many people to drop their coverage this year.
Vermont has enacted its own mandatory health insurance law, but it doesn’t take effect until 2020.
The state’s statistics show that individual health plan enrollment, both on and off the exchange, is 34,396. That’s up by 254 people from a year ago.
Officials said there was increased enrollment among customers receiving subsidies and among those who are unsubsidized. They also noted an increase in the number of new enrollees in the exchange in 2019.
The Department of Vermont Health Access also says that, within subsidized insurance plans, the 26-to-34 age group saw the biggest increase in enrollment this year. That age group has the highest uninsured rate in Vermont.
The availability of increased government assistance for 2019 likely played a role in bringing in more young people. The department says the average subsidized customer is paying $131 monthly for coverage this year, compared with $163 last year.
“Younger people tend to be more sensitive to price,” said Sean Sheehan, deputy director for the department’s health access eligibility and enrollment unit.
On the other hand, the individual market saw a small decrease in enrollment among those who are 45 or older. Officials attributed that to baby boomers who are turning 65 and moving into Medicare coverage.
That trend is expected to continue, because, demographically, Vermont is an old state. The department calculated the 10 most-common ages among those in the individual health plan market; the youngest is 54.
“It certainly changes the dynamics for the whole state – for the economy and for the health care system,” Sheehan said of the aging population.
Officials identified three other trends in the 2019 individual health insurance market:
• Income levels in the marketplace are rising. The number of those with income between 300 and 400 percent of federal poverty level grew by 12 percent this year, while those whose income is 150 percent of federal poverty or below declined by 11 percent.
• There were more customers leaving Medicaid to enter the insurance market (1,083) than there were leaving commercial health plans for Medicaid coverage (686). Sheehan said that’s likely a function of a relatively strong economy and low unemployment.
• The statistics show a movement toward more expensive gold plans, which are up 84 percent. Sheehan said that may be because Vermonters were encouraged to comparison-shop during open enrollment for 2019. “We need to look more into that to find out exactly what’s going on, but we do know that more people than ever used the plan-comparison tool – looking not just at premium, but also total cost,” Sheehan said.
While the individual insurance market was stable, the market for small employers shrunk from 45,510 in January 2018 to 40,641 this year.
Sheehan said much of that change likely is due to the reintroduction of association health plans, which were expanded by the federal government last year. Those who offer association plans in Vermont say they cover about 5,000 people in 2019, though they’ve also said not all of those customers came from Vermont Health Connect.
The future of association plans is unclear: Advocates say the plans give small businesses and entrepreneurs more affordable, customized insurance options, but detractors have proposed legislation that would eliminate a key advantage of associations.
The 2019 insurance market statistics likely will play a role in legislative discussions in coming weeks, especially as lawmakers debate whether or not Vermont should enforce its mandatory insurance law with a financial penalty.
Backus noted that the statistics represent just “one year of information.”
“But I think we’re lucky that we have this information, and we’re able to look at it so quickly after the end of open enrollment,” she said. “It’s certainly instructive to use as we examine future policy decisions.”
