The state that put itself on the vanguard of health reform only to struggle under the weight of its own ambition is now has an ultimatum for fixing its public insurance exchange.
Vermont Governor Peter Shumlin is giving the state exchange, Vermont Health Connect, until August to get itself up and running on a functioning basis, otherwise a transition to a federally-supported marketplace will be considered.
"We now have a vendor with a proven delivery record to finish the job," Shumlin said, referring to a $57 million contract with Optum, the UnitedHealth Group subsidiary that's been helping fix Healthcare.gov and state exchanges.
"Ideally, Vermonters will continue to benefit from the Vermont-focused health insurance marketplace that we all envisioned," Shumlin continued. "But if our system can't deliver for Vermonters by next fall, we'll need to take action to move permanently to a system that can."
Shumlin's push for a functioning exchange comes three months after his administration decided that pursuing a statewide single payer plan would not be feasible. The "risks and economic shocks of moving forward at this time are too great," Shumlin said.
Beyond economic uncertainty, another factor in ditching the single payer plan may have been the state government's failure to create a functional e-commerce site to enroll as many as 200,000 Vermonters in health plans from two insurers and Medicaid.
Vermont Health Connect was envisioned as a platform that could eventually be used as an enrollment and administrative platform under single payer. In 2016, the state is also set to require small business with up to 100 employees to use the exchange, the costs for which are on track to hit $200 million this year, mostly in federal funding. There is also a backlog of coverage changes numbering some 11,000.
Now, an audit of the exchange is in the works, legislators are considering relaxing the small business requirement, and Shumlin administration is trying to inject accountability into the whole enterprise.
The Governor's move is a "much needed antidote to the mounting frustrations over the exchange's failures," as the Burlington Free Press editorial board wrote. "Vermont Health Connect's mounting costs and persistent technical issues would strain the patience and credulity of even the most devoted believers in healthcare reform."
Among Optum's tasks is trying to automate the processes for changes in eligibility by the end of June. Then Shumlin's administration will evaluate the exchange's readiness for 2016, and come up with a contingency plan.
For the 2017 open enrollment, the Shumlin administration is seeking legislation that would permit the use of a state-federal partnership model. That would let the state rely on federal technology in the event of the Supreme Court nixing the availability of subsidies in federal exchanges but still retain state-based insurance regulation--like the all-payer rate setting policy Shumlin wants to pursue in lieu of single payer.