Vermont Medicaid will help thousands of low-income residents get access to services that private insurance may not cover, under a five year extension of a federal waiver. The waiver, known as Global Commitment to Health, has been a 15-year collaboration between the U.S. Centers for Medicare and Medicaid Services and the state.
Federal regulators extended the program to December 2027, according to a recent letter to the state.
The announcement comes as part of an array of changes that focus on access to care for patients and strengthening the state’s health care sector. The new initiative is funded partially by the federal government but would require some increased investment from the state, according to Ashley Berliner, director of Medicaid policy at the Agency of Human Services. The exact cost to the state was not yet clear, she said, as many of the related initiatives are still being discussed or finalized.
The new programs could impact more than 13,000 Vermonters who are not on Medicaid, Berliner said.
The initiative would include an increase in Medicaid reimbursements to providers, according to Berliner, though the exact amounts are still under consideration.
Providers have long complained that Medicaid does not pay them enough to care for patients. As a result, many providers cap the number of Medicaid patients they accept or avoid Medicaid patients altogether. Increasing the reimbursement rates is meant to incentivize providers to continue to accept Medicaid patients, an important aspect of guaranteeing access to services.
Medicaid, a state-federal program, offers comprehensive health coverage to adults and families below a certain income level. In 2022, the threshold was an annual income of $38,295 for a family of four, according to Vermont Medicaid. Almost 138,000 Vermonters — roughly 22% of the state’s population — had Medicaid in 2018, according to the Vermont Department of Health.
But many low- and middle-income Vermonters fall between the cracks. Some make too much money to qualify for Medicaid but cannot afford private health insurance plans that cover their needs, particularly when it comes to mental health. The new initiative would extend select “wrap around” benefits to certain groups of Vermonters.
For example, Medicaid would extend mental health benefits to an estimated 1,000 middle-income Vermonters with substance use disorders. Roughly 2,300 residents with severe and persistent mental illness would now have access to Medicaid’s community-based treatments.
“We’re really trying to move upstream,” Berliner said. “Rather than pay for care when someone is already really sick and they’ve lost their job or their house, we’re trying to get more upstream (intervention) where it has a bigger impact.”
The ambitious five-year initiative, which is set to begin July 1, would also offer comprehensive prescription drug coverage to almost 10,000 middle- and low-income Vermonters who do not qualify for full Medicaid benefits.
Mike Fisher, chief health care advocate at Vermont Legal Aid, said the agreement offers a “real positive change for a small subset of people.”
But he also said he hoped any increase in Medicaid payout to providers would prompt health care systems to reduce service charges on privately insured Vermonters.
Jessa Barnard, executive director of the Vermont Medical Society, said the success of the state’s plan would depend on exactly how much additional money the state can dedicate to the program. Roughly 55% of Vermont’s Medicaid money comes from the federal government, Berliner said. The state finances 45% of the Medicaid program in any given year.
State officials can recommend how to allocate the funds the federal government would provide, Barnard added, “but there would still need to be a state match that the Legislature is going to have to appropriate … so there could still be limiting factors.”
Lawmakers already approved some increases to Medicaid reimbursement rates in the session that just ended, and the political will may not be there for future increases next year, Barnard said.
Some Medicaid beneficiaries would also have access to new programs in the coming months, according to Berliner. For example, more than 350 enrollees would qualify for a new rent assistance program aimed at addressing housing instability.
“Thinking about being able to treat chronic illness is something really every Medicaid program in the country does,” Berliner said. “But those factors that influence a chronic illness — homelessness, employment, just general quality of life community supports — that is something that we're really taking a focus on.”
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