HEALTH CARE REFORM HITS MUDDY WATERS
NEWPORT CITY – The Vermont Education Health Initiative – a non-profit trust that assists school districts, their employees, and local unions to navigate health care issues – will be entering uncharted seas when the state moves toward a health care Exchange. Vermont is working toward creating an Exchange, which, among other goals, will set minimum standards for health care coverage for all insurers.State regulators are developing a basic plan in accordance with the Affordable Care Act's (ACA) guidelines but do not have the cost estimates the Vermont Education Health Initiative (VEHI) needs to compare to the health insurance coverage their clients already have. Once the Exchange is in place in January 2014, anyone who needs insurance will have options for the type of coverage they want. But the cost of each plan has yet to be determined.VEHI has a necessary role pushing forward because current health care plans can be grandfathered in if certain goals are met. The ACA sets criteria that the states have to meet to qualify for grandfathered health care plans. VEHI is working to keep all options open such that as long as a school district wants to keep their current plan, they can do so. Laura Soares of VEHI said, “As school district contracts come up, we will see what we have to offer through the current plan and what other offers are available. We will continue to work with school districts as they are ready to transition away from their current coverage.”Under the current system, school districts in this state contract for health care services through VEHI, which contracts with BC/BS, paying a flat fee for all actual claims and an administration fee. When revenues collected from premiums is higher than actual claims, the surplus goes into a trust. Proceeds from the trust are used to offer wellness programs (12,000 participants last year) and additional health care coverage, including a dental program and extended coverage for children up to the age of 26 through a parent's health care plan. In the future, extended coverage will be mandatory under ACA.The trust will remain in existence after the Exchange is created or until the trust is dissolved by the membership. School districts that leave the grandfathered plans before the trust is dissolved will not share in the proceeds. In addition to current school district employees, VEHI also administers the Vermont State Teachers' Retirement System.Soares states, “As long as you like your health insurance, you can keep it; if you want to change it we can help you.”To that end VEHI is working with the Department of Financial Regulation to establish a new regulatory status that will permit the trust to offer grandfathered health insurance plans after the Small Group Association is disbanded.As for the recent estimate of a 14% increase in health care insurance premiums for school districts statewide, Soares said that in addition to the usual increases (higher claims than expected for high end, expensive specialized treatment), they have to take into account a number of new or more expensive mandates required by ACA.Two costly mandates include increased revenue for vaccines ($597,501 over the current fiscal year), and Early Childhood Development Disorder (Autism), with an additional $2,753,717 in funding. Any surplus funds will go into the trust for the members' benefit.Three state and three federal mandates associated with the ACA account for approximately $6.5 million in additional charges for essentially administrative fees for the operation of the Exchange in its first year. These charges will cost school districts through their health care premiums even if they keep their current plans and do not participate in the Exchange.In addition two other federal mandates require all insurers to pay a Federal Re-Insurance Transitional Fee and a Federal Insurer Fee which has yet to been determined. Of the 14% recommended increase in insurance premiums for the 2013/14 fiscal year 12.8% covers known fees; the balance of several million dollars is in anticipation of the cost of these two federal mandates.For individuals and small businesses who want to know what health care plans will be available to choose from, the Navigator System will be online soon. You can also go online at www.gmcboard.vermont.gov for more information.