MONTPELIER — The latest technological setback to the state’s online health exchange has led to renewed calls for the Shumlin administration to delay for a full year the new mandates that have shifted the insurance landscape for small businesses.
But administration officials say the glitches, while not insignificant, won’t mean catastrophic losses of coverage. And they say the $172 million enterprise known as Vermont Health Connect will deliver on its promise to streamline the insurance-purchasing process in the reasonably near future.
“We’re sorry that this happened this way, because it’s not how we wanted it to happen, either,” Robin Lunge, director of health care reform for the Shumlin administration, said last week of the site’s troubled roll out. “But we will get through this. We’re at mile 22 of the marathon — stick with us; we will get through it.”
The exchange has been plagued with technological problems since its launch on Oct. 1. While many of the glitches that made the site so dysfunctional early on have been resolved, news arrived last Monday of a problem that could complicate things anew for some of the small businesses which are, by law, required to purchase employee health plans sold on Vermont Health Connect.
At issue specifically is the continued failure of a payment-processing feature, a failure that will prevent employers who signed up through Vermont Health Connect from enrolling in their new insurance plans in time to begin coverage by Jan. 1, when their current plans will lapse.
Administration officials say they’ve solved the problem by allowing insurers to extend those companies’ 2013 health plans until the payment function is successfully installed.
But Betsy Bishop, executive director of the Vermont Chamber of Commerce, says the latest problems are symptomatic of chronic functionality issues that have eroded consumer confidence in the new site.
Bishop said the loss of payment functions has also diminished the options available to businesses that have enrolled through Vermont Health Connect. Those businesses originally had the option of enrolling in plans directly through the state’s private insurance carriers, Blue Cross Blue Shield of Vermont and MVP.
But news of the payment problems didn’t surface until after the passage of the deadline for direct enrollment, meaning businesses have no choice now but to wait for the technological issues to be fixed before they can initiate their new plans.
“For those businesses that chose to go into Vermont Health Connect, as they had been encouraged to do, they now as of Monday’s announcement have more limited options than they did before,” Bishop said. “So what we’ve asked for it to give them more options.”
Specifically, Bishop’s organization has asked the Shumlin administration to invoke its executive authority to delay the exchange mandate for one year, a time period during which Bishop said the state will be able to work out the kinks that have complicated enrollment thus far.
Bishop isn’t alone in her call. Republican Lt. Gov. Phil Scott last week threw his voice behind the push for a yearlong delay as well.
Lunge said the delay is both unnecessary and logistically impractical. She said the only plans for which private insurers sought authority to set rates next year were the mandated plans being sold on the exchange.
Lunge said they wouldn’t have enough time now to establish new rates for the old small-business plans that will expire for good shortly after the New Year.
Anyway, Lunge said, the latest setback only affects the one-third of businesses that enrolled directly through Vermont Health Connect — the majority, according to Lunge, enrolled directly through the carriers.
And she said the biggest potential problem — lapses in coverage — will be avoided altogether under the contingency plan put forward by the administration last week.
“We’re certainly sympathetic to the frustrations of small businesses, and appreciate their frustrations,” Lunge said. “But the most important thing is that everyone will have coverage on Jan. 1, and we’re making sure that happens.”
Steve Jeffrey, executive director of the Vermont League of Cities and Towns, said his organization is helping municipalities navigate the latest twist in the process. Businesses with 50 or fewer employees are required to buy insurance from the exchange, a category that the majority of Vermont town governments fall into.
Among the problems Jeffrey had identified as of last week centered on deductibles. In some instances, he said, workers getting exchange plans through their employers would pay higher monthly premiums in 2014, but have lower deductibles.
Since those new plans won’t kick in until sometime after Jan. 1, however, Jeffrey said the employees would be subject for a period of time to the higher deductibles, despite that fact that they’ll have to pay increased monthly premiums for most of 2014.
If those employees experience a major medical event early in the new year, he said, “it really exposes employees to a nasty opportunity to pay a lot of money for health care being delivered during whatever time it takes for the payment function to be fixed and the new plans to kick in.”
Jeffrey said Blue Cross Blue Shield has “bent over backward” to address some of the concerns, and has actually made arrangements to enroll towns and small businesses directly through the carrier, so their coverage can begin on Jan. 1, despite the fact that the deadline for direct enrollment has passed.
Darcie Johnston, head of Vermonters for Health Care Freedom, an organization that opposes the health reform initiatives of the Shumlin administration, predicted that after April 1, the deadline for enrollment in the new exchange plans, the state will see a spike in the rate of uninsured Vermonters.
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