One-year extension bad for business
Getting a bill might not seem like something to be excited about. But in this case it is.
This week thousands of Vermonters will be receiving bills for insurance they purchased through Vermont Health Connect, the state’s new online health insurance marketplace.
Many qualified for financial help to make that insurance more affordable. And for some, 2014 will be the first year where they will have the security of quality health care.
That’s a big deal. The Affordable Care Act is fundamentally changing the way Vermonters and all Americans purchase health insurance, making it more affordable to many and extending coverage to all.
But while we celebrate the progress we’ve made, we still have a lot of work to do. The payment functions for small businesses on Vermont Health Connect are still in testing. Because of this, we announced last week that any small business that wants to use Vermont Health Connect to provide health insurance to their employees in 2014 will have their current coverage extended past Jan. 1, until the payment functions are ready.
This was a serious and difficult step to take, but we did it for one simple reason: We won’t let delays with the website result in Vermonters losing coverage.
That’s unacceptable to us.
Understandably, many small businesses are frustrated. We’re frustrated, too. In recent days we’ve heard from some small businesses, their representatives and politicians urging that instead of extending current plans for up to three months until the payment functions are operational, we should just extend 2013 plans for all of 2014.
We share the desire to reduce confusion and give long-term clarity, but a year-long extension is not necessary or practical. We have already put in place an extension to ensure there is no lapse in coverage, and a further extension would only move us backwards, causing more confusion without changing our ultimate destination.
Two-thirds of Vermont small businesses are already enrolled in a Vermont Health Connect plan for 2014. If the implementation of Vermont Health Connect were a marathon, we’re at the 17-mile mark. Giving up now would only delay our reaching the finish line. And it won’t change the way the finish line looks.
Vermont is required under federal law to implement its online marketplace, Vermont Health Connect. One way or another that will happen, whether it is now, in three months or in 2015. We think implementing Vermont Health Connect as soon as possible will bring more clarity than waiting another whole year, for no practical or operational reason, to do the same thing.
Additionally, a year-long extension would likely cost small businesses money. Under the short-term extension announced last week, employers and their employees will pay the same premium rates they paid in 2013 until Vermont Health Connect is fully up and running. A year-long delay would change that, requiring a full rate review and likely causing the premiums of current plans to rise.
A rate review includes statutory notice to the public, a public comment period, hearing, actuarial review and a decision, a process which typically takes more than three months. Even with an expedited review, employers would be picking a plan without knowing for months what the actual premium would be.
Because the rate review would likely cause premiums to go up, employers would be under-paying for their plans in 2014, resulting in added expenses — unknown until after plans were selected — once the review was complete.
And lastly, a year-long extension may very well do harm to the tens of thousands of Vermonters already enrolled in a 2014 Vermont Health Connect plans. The plans offered through Vermont Health Connect were based on all eligible Vermonters selecting from that set of plans. A year-long extension would distort the assumptions on which 2014 plans were based. That could undermine the viability of insurance plans in which tens of thousands of Vermonters are already enrolled.
We know this transition has been frustrating for everyone, especially small businesses. And we understand the desire for a year-long extension so that no small business has to think about their health care choices until 2015.
But at this point a one-year extension is not only impractical, it would cause more confusion, cost small businesses money and put at risk the tens of thousands of Vermonters relying on 2014 Vermont Health Connect plans. A year-long extension would be bad for small businesses and move us backwards. We’re focused on moving forward.
Robin Lunge is Vermont director of health care reform.