Vt. Health Reform Gets Infusion

The Obama administration is injecting tens of millions of dollars into Vermont’s health care reform effort.

The Centers for Medicare and Medicaid Services this week gave the state a $42.7 million grant to jump-start a new Web-based health insurance market, called Vermont Health Connect. Vermont officials had initially requested more, asking for $108 million.

Vermont is one of 17 states creating its own insurance exchange, and this is one of five major establishment grants Vermont has received to date. CMS numbers show that the feds have given Vermont $168.1 million to get the state’s exchange up and running.

Mark Larson, commissioner of Vermont Health Access, said the state applied for the grant because its previous cost estimates were too low for the unprecedented marketplace.

“We went back and asked for additional funds because the total cost had exceeded our original estimates,” he said. “When we requested this grant, we had all of the contracts in place and had negotiated the final price, and before, we were guessing what it would cost to build something that we had never built before.”

This grant is only for the design and development of the exchange. Larson said it was not for the roughly $18 million a year needed to run the exchange, which the state will be liable for paying in 2015.

“It’s not the cost going forward,” he said. “It’s the cost of bringing the system up.”

The money will go to contracts for an exchange call center and premium processing, as well as to contingency planning if certain portions of the state’s massive IT systems are not up and running by Oct. 1, when the exchange must open.

Last month, Vermont officials told legislators that they are preparing to manually process insurance purchases from October to Jan. 1, 2014, when the exchange is federally mandated to be fully operational.

This exchange will be the sole health insurance market for Vermonters buying health insurance individually or through businesses with 50 or fewer employees.

Larson said the biggest chunk of the new grant would go to connecting the state’s eligibility systems for human services. Those systems must be compatible so that Vermonters know if they are eligible for any federal and state health insurance subsidies.

On Thursday, the U.S. Agency of Health and Human Services also announced $618,633 in grants to eight Vermont health centers, running 62 sites.

Agency representatives say that the money is meant to enroll uninsured Vermonters in new insurance plans. According to the agency, more than 10 percent of the 130,659 patients these centers served last year were uninsured.

“This investment will give Vermont neighborhoods and towns one more resource to help people understand their insurance options and enroll in affordable coverage,” HHS Secretary Kathleen Sebelius said in a statement.

The Community Health Center of Burlington received the largest grant of all centers with $104,045, and the community health centers expect to hire 11 workers to help roughly 18,000 uninsured residents get coverage.