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Gov. Phil Scott has signed a bill mandating that Vermonters purchase health insurance as of 2020.
Some details of the “individual mandate” are still up in the air. For example, officials have to figure out next year how to enforce the rule, and there is debate about whether a financial penalty or some sort of incentive might work best.
But for now, the governor and a majority of the Legislature seem to be in agreement that mandating health coverage is necessary to keep the state’s insurance market relatively stable.
“We are committed to maintaining Vermont’s low uninsured rate,” said Rebecca Kelley, Scott’s communications director.
The state’s pursuit of a mandatory health insurance policy is a response to changes at the federal level: A tax overhaul approved last year by Congress eliminates the penalty for the federal individual mandate as of 2019.
There is concern that the lack of a federal penalty will cause a significant number of people to drop their health insurance, thus increasing costs for those who retain coverage. In fact, Blue Cross and Blue Shield of Vermont — the state’s largest insurer — has said a portion of its proposed 2019 rate hike is due to expected effects of the federal change.
In an attempt to head off such issues, the state House earlier this year approved a version of H.696 that enacted a state individual mandate in 2019 even though officials hadn’t yet figured out how to enforce the law.
The Senate balked, arguing that an insurance requirement shouldn’t take effect without a penalty in place for those who don’t comply.
A compromise version passed both bodies on the last day of the regular 2018 legislative session. That bill pushed the state’s individual mandate to Jan. 1, 2020, giving officials time to figure out administration, exemption and enforcement issues with the help of a working group that’s scheduled to report to the Legislature by Nov. 1.
Rep. Anne Donahue, R-Northfield and vice chair of the House Health Care Committee, said an individual mandate goes hand-in-hand with federal law requiring insurers to cover people with pre-existing medical issues.
The government can’t push insurers to take on the sickest patients, the argument goes, while simultaneously allowing healthy customers to walk away.
“It’s not like there are a lot of people who are thrilled about (enacting) a mandate, necessarily,” Donahue said. “But I think what most people understand is, when you talk about the requirement under the (federal Affordable Care Act) to cover pre-existing conditions, you can’t have one without the other.”
Donahue acknowledged that there’s a debate about whether the Affordable Care Act should be repealed at the federal level. “But the bottom line is, what we have right now is what we have,” she said.
Those issues aside, there’s also a push to keep Vermont’s uninsured rate low. Currently, only 3.7 percent of the population lacks health insurance, according to a recent Green Mountain Care Board report.
Kelley said that’s a priority for the governor, who signed H.696 on May 28. She also cited a desire to avoid insurance cost increases that could be triggered by people dropping coverage.
The governor’s signature isn’t a surprise, because his administration previously signaled support for an individual mandate.
But there could be a debate brewing for 2019, when the Legislature must settle on an “enforcement mechanism or mechanisms” to back up the state’s insurance mandate. There are several references to possible financial penalties in H.696, but the Scott administration has urged lawmakers to consider something different.
“We wouldn’t be advocating for a penalty. It might be something like an incentive,” Kelley said, adding that “a penalty may not be the right approach for families that can’t afford to buy insurance.”
“The real solution isn’t going to be related to mandates or penalties,” Kelley said. “It’s more about giving people choices so they can afford care.”
It will be up to state officials to explain those choices — and the upcoming insurance requirements — over the next few years.
H.696 includes requirements for public outreach led by the Department of Vermont Health Access. Those requirements are for 2020 and 2019 health plans, even though there won’t be a mandate in place for 2019.
“In general, we think it’s a good idea to do outreach around health coverage — certainly around open enrollment each year,” said Sean Sheehan, deputy director for the department’s health access eligibility and enrollment unit.
That outreach can include information about new insurance plans, new costs and available subsidies. It also can include general information “so people understand the value around having health coverage — both the value to the individual and the value to the community,” Sheehan said.
The Office of the Health Care Advocate also is supposed to be involved in the state’s individual mandate outreach efforts.
Mike Fisher, Vermont’s chief health care advocate, said it might be a tough sell in some cases. While Fisher understands the “public interest” argument for maintaining health insurance, he also said it’s difficult to force costly coverage on those who are already struggling to make ends meet.
“As a consumer advocate, we want to speak up for people who can’t afford it,” Fisher said. “It just does not fit into their family’s budget.”
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