• Congressional panel challenges Vt health exchange
    Vermont Press Bureau | July 02,2013
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    MONTPELIER — A congressional oversight committee is challenging the legitimacy of a Vermont law that will require small businesses to purchase health insurance through a new online “exchange.”

    In a June 26 letter to Health and Human Services Secretary Kathleen Sebelius, Republican Rep. Darrell Issa, of California, says the Vermont statute “violate(s) the principle of voluntary participation in the exchanges.” Issa, a vocal critic of the federal Affordable Care Act from which the exchange originally sprang, said Vermont will have to amend its law so as to “ensure that individuals and employers have the freedom to enter into contracts outside of a regulated government-created bureaucracy.”

    State officials, however, say Vermont is on safe legal ground and dismissed the letter as an attempt by opponents of health care reform to derail the pending implementation of a key component of the health care reforms dubbed Obamacare. The letter was issued by the House Committee on Oversight and Government Reform, which is controlled by the same Republican majority that has voted on several occasions to repeal the ACA altogether.

    “It’s no surprise this particular membership of this committee would look at states that are trying to move forward with creative approaches to health care reform,” said Robin Lunge, director of health care reform for the administration of Gov. Peter Shumlin.

    At issue is whether Vermont can force small businesses to purchase from the exchange, an online marketplace in which policies are subject to more regulatory scrutiny than plans sold in the conventional market. Lunge said Monday that the administration conducted a thorough legal analysis before passing legislation in 2012 that requires businesses with 50 or fewer employees to purchase insurance through the exchange.

    Issa points to language in the Affordable Care Act under a subhead titled “Prohibition Against Compelled Enrollment.” Language following that subhead stipulates that nothing in the federal law “shall be construed to compel an individual to enroll in a qualified health plan or to participate in an Exchange.”

    The exchange mandate in Vermont, Issa wrote, “conflicts with the text of the (ACA) that requires participation in the Exchange to be voluntary.”

    Lunge said the Legislature and administration were well aware of the ACA language when they crafted the exchange law. While the federal statute makes participation voluntary, Lunge said, that doesn’t mean states aren’t free to go further. She said states have always had regulatory authority over private insurance companies operating within their boundaries. And the ACA, Lunge said, has done nothing to change that.

    “From our perspective, when we did our legal analysis, we felt state authority over the private insurance market was preserved (by the ACA) and that Congress didn’t intend to pre-empt states on that insurance regulation,” Lunge said.

    Furthermore, Lunge said, the federal government has on multiple occasions over the last year closely vetted Vermont’s exchange plan and determined that it passes legal muster.

    Issa’s oversight committee is asking Sebelius to conduct a similar probe of statute in Washington, D.C., the only other jurisdiction in the nation that is forcing small businesses to purchase insurance through the exchange.

    Mark Larson, commissioner of the Department of Vermont Health Access, said that by herding small businesses into the exchange, policymakers ensure that as many Vermonters as possible will be eligible for the federally funded financial assistance that will be available inside it.

    “Obviously the purchase of coverage through the exchange is the only way that individuals can access the significant benefits available through the ACA,” Larson said.

    Vermont’s exchange, scheduled to begin selling policies Oct. 1, is called Vermont Health Connect.

    Darcie Johnston, executive director of Vermonters for Health Care Freedom, joined business groups in 2012 in lobbying against the mandate. She said the congressional inquiry will renew the effort to undo the requirements on small businesses.

    “Vermonters for Health Care Freedom will begin an immediate effort to create a grass-roots effort to encourage the governor and the Vermont Legislature to make the Vermont law compliant with the intent of Obamacare,” Johnston said Monday.

    By corralling businesses into the exchange, Johnston and others say, lawmakers will deny them access to potentially more affordable plans that would otherwise be available outside the exchange.

    Betsy Bishop, executive director of the Vermont Chamber of Commerce, said she couldn’t weigh in on the statutory legitimacy of Vermont’s mandate. But she said small business owners by and large would prefer the option of being able to buy plans outside the exchange.

    “What we said (in 2012) is that if the exchange offers the best product at the best prices, businesses and individuals will flock there regardless of if you have a mandate or not. But that was taken off the table in Vermont,” Bishop said. “And I think having those types of choices would still be preferable to businesses.”

    Issa’s letter notwithstanding, Lunge and Larson said the state is proceeding full force with efforts to get the exchange up and running by Oct. 1. A multimillion-dollar outreach and education effort will ramp up in the coming weeks and months as the state looks to deliver to business owners all the information they need to make a successful transition.

    The House Committee on Oversight has asked the state of Vermont to “produce all documents and communications referring or relating” to a law that “prohibits the purchase of health insurance coverage outside the state’s Exchange.”

    Lunge said the state will comply with the committee’s request.

    Asked what would happen if the mandate were overthrown, Lunge said she hadn’t played out that scenario. But she said she’s confident that the letter won’t result in any substantive changes. If Issa’s argument did get traction, Lunge said, the state would defend its ground.

    “Given that the federal government has already approved our exchange, I think at this point it would be potentially a bit late to change course,” Lunge said. “So I think we would look at what our legal options were.”

    peter.hirschfeld @timesargus.com

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