Vermont punts on Mandate Penalty but locks in six other ACA protections!

Last May, I noted that Vermont was supposedly joining Massachusetts, New Jersey (and later in the year, the District of Columbia) in reinstating the ACA's Individual Mandate Penalty, which added an additional tax to people who don't enroll in ACA-compliant healthcare coverage (whether private or public) and who don't qualify for an exemption due to an affordability threshold, hardship or some other qualifying reason.

I also noted at the time, however, that Vermont seemed to be dragging their heels on the mandate penalty itself:

Strike One: Vermont's mandate won't go into effect until 2020, leaving a one-year gap. This bill getting signed is still good news, but mostly irrelevant for 2019. The "coordinated outreach efforts" part is really more of a counter to the Trump Administration's slashing of the ACA's marketing/outreach budget...but not really, since Vermont already runs their own exchange and should have their own marketing/outreach budget anyway. So this is more of a token gesture, I'd guess.

...Strike Two: Um...yeah. The text of the bill as signed into law doesn't appear to even state how much the penalty itself will be. The original version passed by the House was exactly the same as the ACA's original penalty (either $695/person or 2.5% of the household income), but the final version has that entire section struck out.

That was in May 2018. They've had an entire year to lock in what the actual penalty will be...and in the end, they decided that there...well...won't be one. As Louise Norris reports at healthinsurance.org:

Vermont’s individual mandate will take effect in 2020, but it won’t have any penalty for non-compliance

Vermont will have an individual mandate as of 2020, requiring residents to maintain minimum essential coverage. But there will not be a penalty for non-compliance. Instead, Vermont tax filers will simply have to indicate whether they had coverage during the year when they file their state tax return, and the data will be used by the state to “provide targeted outreach to assist those residents [without minimum essential coverage] in enrolling in appropriate and affordable health insurance or other health coverage.”

Welp. Honestly, this sounds to me very much like a weaker version of the "Easy Enrollment" bill just signed into law in Maryland last month. In Maryland's case, people who didn't have healthcare coverage the previous year check off a box on their state tax form (like Vermont's new law will), which lets the state know what their status is so they can contact them to discuss their options. Unlike Vermont, however, Maryland's law also includes a second box which, if checked, allows the state to automatically enroll them in Medicaid if they're eligible or to help enroll them in a subsidized ACA exchange policy utilizing a new Special Enrollment Period. Vermont's new law doesn't appear to have this.

So...really, this is just a mandate requirement without any means of enforcing it, which, ironically, is very similar to the status of the federal ACA "mandate requirement", seeing how the penalty has been set to $0 or 0% of income.

While this is sumwhat disappointing to me (if you're going to have a 3-legged stool model, you might want to actually have all three legs), the bill does include several other important provisions, which lock in a whopping 6 ACA provisions listed on my State-Level ACA Protection/Improvement Spreadsheet:

H.524 does include various other health care reform provisions, including:

  • Codifying some of the ACA’s consumer protections into state law, including guaranteed-issue coverage without pre-existing condition exclusions, annual out-of-pocket caps, a ban on lifetime and annual benefit limits, coverage for dependents until age 26, and preventive care covered without cost-sharing.
  • Strictly limiting association health plans, including a ban on new association health plans as of 2020.

Technically, only five of these count as new provisions, since Vermont already had a weaker guaranteed issue requirement, although I presume this version tightens that up considerably.

The bill also includes a few additional items which I don't have listed on the spreadsheet:

  • A ban on broker commissions for health care sharing ministry plans (ie, brokers cannot be compensated for enrolling people in health care sharing ministry plans).
  • Directing the Vermont Agency of Human Services to develop recommendations for making coverage more affordable and accessible, and submit their findings and recommendations to the legislature by December 2019.
  • The bill also directs the Agency of Human Services to study the state’s current merged market approach for the individual and small group markets, and determine whether it should be maintained or changed. Changing it could include merging the large group market as well, or possibly separating the markets the way they are in most other states.

I'm all for the first one (I'm not a fan of sharing ministries, as you might imagine). The second one seems to be pretty "meh". As for the third item, I sincerely hope they go with the first option--merge all three markets together. The entire point of health insurance is to have as large, diverse and stable a risk pool as possible.

So...I give Vermont a big thumbs up for seven items, a thumbs down for one, a "meh" for one and a "to be determined" for one.