*(Yes, I know, the District of Columbia isn't actually a state, and Vermont's mandate is...well, read on...)
As the 2020 Open Enrollment Period rapidly approaches (it starts November 1st nationwide...except for California, where open enrollment is starting on October 15th), it's time to start getting the word out about some important things to keep in mind this fall.
One of the most critical things to remember for residents of California, the District of Columbia, Massachusetts, New Jersey, Rhode Island and Vermont is that each of these states* has reinstated an individual healthcare coverage mandate law/ordinance to replace the federal ACA mandate penalty which was zeroed out by Congressional Republicans back in December 2017. This means that if you live one one of them, unless you receive an affordability, hardship or other type of acceptable exemption, you'll be charged a financial penalty when you file your state/district taxes for 2020 in spring 2021 if you don't have qualifying healthcare coverage.
But that's not all! In addition to the actual 2018 MLR rebates, I've gone one step further and have taken an early crack at trying to figure out what 2019 MLR rebates might end up looking like next year (for the Individual Market only). In order to do this, I had to make several very large assumptions:
Vermont is the fourth state to announce their approved 2020 ACA individual/small group market premium rate changes. VT (along with Massachusetts and DC) has (wisely, in my opinion) merged the risk pools for the two markets into one, meaning I have to plug the numbers in differently on my spreadsheet.
Back in mid-May, my initial analysis of the two carriers participating in both Vermont markets put the weighted average rate increase being requested at an even 13.0% statewide: Blue Cross Blue Shield of VT was requesting a 15.6% increase, while MVP Health Care asked for a 9.4% bump.
For comparison, here's a similar state-level pie chart from the Vermont Agency of Human Services. It doesn't start out too bad, breaking out the total statewide coverage along the lines of the Donut. As you'd expect, around half the state's 627,000 residents are covered via private insurance (45% via their employer, 5% via the ACA individual market, 1% via "Association Health Plans"), while the other half is mostly covered via Medicare or Medicaid. Vermont has only a 3% uninsured rate.
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.
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.
It's important to note that the numbers posted in the tables below include both Vermont's on and off-exchange enrollees in the individual and small group markets. It's also important to note that Vermont (like Massachusetts) merges both the individual and small group markets into the same risk pool for purposes of premium rate settings.
There are four tables...two for the Individual market (raw numbers and percentages) and two for the small group market. Perhaps the most noteworthy line is the "Reflective Silver" enrollments...those are people who took up the "Silver Switcharoo"...basically, unsubsidized individual market enrollees who switched from (or chose) on-exchange Silver plans to off-exchange Silver plans to save money on policies which are identical to the on-exchange Silver version but without the CSR premium load.
Vermont is among the few states which also releases their off-exchange numbers, and it's a good thing they do that because it helps explain the 12.3% drop in on-exchange enrollment this year. In short, thanks to VT making the move to active #SilverSwitching for 2019, several thousand people moved from on-exchange Silver ACA plans to nearly-identical off-exchange Silver plans.
Anyway, today they issued a formal press release with additional details...and at the same time bumped up the official enrollment tally by a bit:
2019 Individual Enrollment Report Shows More Vermonters are Covered
At long last, the final piece of the puzzle can be added: I just received the final 2019 Open Enrollment Period numbers from Vermont Health Connect.
Before looking at it, it's important to understand that Vermont has a unique way of reporting ACA-compliant healthcare policy enrollments.
For the first two years of Open Enrollment, the state didn't allow any off-exchange (or "direct") enrollments for the individual market (or the small business market, I believe). That means all indy market enrollments were done through the exchange. Due to technical problems (and possibly for other reasons as well), however, starting in 2016 they started allowing direct/off-exchange enrollment as well, as every other state does (the District of Columbia is the only other ACA exchange which has no off-exchange market). However, Vermont still requires the insurance carriers to report those off-exchange enrollees to them and they report them as well.
I wish every state reported their enrollment data this way; it would make it much easier for me to do my job, since as it stands the off-exchange market is a bit of a mystery in most states.
Unfortunately, Vermont is one of the three states (along with Idaho and Maryland) which hasn't released any 2019 Open Enrollment data yet, so I don't have any numbers to report on that front. However, they did just post this "Open Letter" which I found interesting. The two things to keep in mind about Vermont are: 1) they include their own subsidies on top of ACA subsidies; and 2) they were among two states (North Dakota is the other one) which upgraded their premium pricing in 2019 from "no load" to full #SilverSwitcharoo status.
You can read about the wonky mechanics of this here, but the bottom line is that Vermont residents who qualify for subsidies have substantially better deals available this year, while unsubsidized enrollees have an important workaround to avoid being stung with extra CSR costs:
Open Enrollment is the annual period when new applicants can use the marketplace to sign up for health and dental plans for the coming year. It is also the time that existing members have the option to change plans – an option that many more members than usual will want to consider.
Much more financial help - Subsidized members will receive over $1,200 more in premium subsidies in 2019 than they received in 2018. This is because the premiums for Blue Cross Blue Shield of Vermont (BCBSVT) and MVP Health Care (MVP) on-exchange silver plans are increasing significantly. Premiums for silver plans drive federal subsidies—so when the premiums for silver plans increase, subsidies also increase. Premium subsidies can be used on any metal level plan, bronze through platinum (see illustration of what the typical member pays in 2018 vs. 2019).
In other words, Vermont has finally jumped onboard the #SilverSwitcharoo Express!
Vermont's situation is unusual compared to most other states for a couple of reasons. First of all, VT is one of only two states (Massachusetts is the other one) which has merged their Individual and Small Group market risk pools into one to help stabilize both markets. This is something I wish every state would do, frankly, although it's probably a lot easier to do in deep blue states (and Vermont having such a small population probably made it easier as well).
20 states went the full #SilverSwitcharoo route (the best option, since it maximizes tax credits for those eligible for them while minimizing the number of unsubsidized enrollees who get hit with the extra CSR load);
16 states went with partial #SilverLoading (the second best option: Subsidized enrollees get bonus assistance, though not as much as in Switch states; more unsubsidized enrollees take the hit, but they aren't hit quite as hard);
6 states went with "Broad Loading", the worst option because everyone gets hit with at least part of the CSR load except for subsidized Silver enrollees;
6 states took a "Mixed" strategy...which is to say, no particular strategy whatsover. The state insurance dept. left it up to each carrier to decide how to handle the CSR issue, and ended up with a hodge podge of the other three
3 states (well, 2 states + DC, anyway) didn't allow CSR costs to be loaded at all. Their carriers have to eat the loss, which makes little sense, but what're ya gonna do?
Given how progressive Vermont is, you'd think that they'd be doing as much as possible to batten down the hatches in order to avoid or mitigate the latest wave of sabotage efforts from the Trump Administration and the GOP...and you'd mostly be correct.
Some of the work on that front has already been done. For one thing, Vermont (along with Massachusetts and the District of Columbia) merges their individual and small group market risk pools together, which helps smooth out premium increases and overall morbidity across a larger risk pool. For another, Vermont has fully embraced ACA provisions such as Medicaid expansion and operating their own full exchange, of course. Vermont, along with a few other states, also has pretty strict rules in place limiting both short-term and association healthcare plans, so that portion of Trump's sabotage attack is neatly cancelled out already.