Vermont, N.H. Took Very Different Approaches to Establishing Health Insurance Exchanges

Sunday, September 15, 2013
Lebanon — State Rep. Laurie Harding hears the questions at every meeting about health insurance exchanges.

The people attending — many of them well-informed, highly educated leaders in the community — have heard plenty about Vermont’s rollout of the new virtual marketplaces, as required under the federal Affordable Care Act. But all is quiet in New Hampshire.

“I’ve been to a couple of talks where people have said, ‘We’ve heard these ads on the radio. What’s happening to us in New Hampshire?’ ” said Harding, D-Lebanon, the vice chairwoman of the House Health, Human Services and Elderly Affairs committee. “And you have to say, we’re working on it.”

The confusion Harding’s constituents feel is understandable, given their proximity to Vermont and the very different paths New Hampshire and Vermont have taken in setting up the exchanges, where many individuals and small businesses will buy health insurance beginning Oct. 1. Vermont moved early and aggressively to set up its exchange, a key provision of the 2010 Affordable Care Act, and in the weeks leading up to its launch has rolled out a coordinated education campaign across the state, including radio and television advertising. New Hampshire, meanwhile, has fought over every step of the ACA’s implementation.

The reasons are many, but key is the fact that Vermont politics are dominated by Democrats, while New Hampshire is more politically divided.

Vermont embraced the exchange as an opportunity to move toward a single-payer reimbursement system, in which the state government would cover health care costs. New Hampshire lawmakers, when the Legislature was controlled by Republicans, saw the exchange as an onerous federal mandate. Vermont designed its own marketplace. New Hampshire prohibited a state-run model. Vermont accepted federal money to educate consumers. New Hampshire legislators have refused it.

Nationally, no two states have pursued federal health reform in exactly the same manner, and the reasons are more complicated than mere politics, say health care policy experts. Decisions were influenced by the needs of the local populations and history with health reform. Vermont had spent years debating and creating government insurance programs such as Catamount Health long before the Affordable Care Act was passed. As a result, the uninsured are a smaller segment of the population in Vermont.

But ideology undoubtedly played a role in getting both states to this point, with Vermont seemingly far more prepared than New Hampshire with two weeks to go before open enrollment begins. A key difference is the proper role of the federal government in health care and, at a more basic level, whether access to health care is a right.

Culturally, the Upper Valley is united by an economy and local traditions that don’t recognize the border. But the way the Twin States have gone about implementing the Affordable Care Act has laid bare the reality that this is still a region split between two politically distinct states.

No one knows this better than Harding.

“If you compare us to Vermont, and how far out in front Vermont is on the exchange, I think especially for us who live up on the western side of (New Hampshire), I think it’s very confusing to hear Vermont already up and running, talking about how people can enroll, educating the public,” she said. “And New Hampshire right now is nothing short of being, I won’t say chaos, but it’s close.”

Choosing Different Paths

President Obama signed the ACA into law in 2010. In the year that followed, it seemed clear that Vermont and New Hampshire would approach the mandate to create a state exchange differently.

The law was contentious in New Hampshire almost from the beginning. Republicans attained large majorities in both the House and the Senate in the 2010 midterm election. The state was more politically divided than Vermont, which had elected a Democratic governor to work with a Legislature also controlled by Democrats.

The year President Obama signed the ACA into law, New Hampshire was awarded a $1 million “planning grant” to help with educating the public and to study how the insurance industry would be affected. But the state never drew down on that money.

Led by Republicans, the Legislature passed a law in 2011 that required the state to return two-thirds of the grant money. Later that year in December, the Executive Council, then all Republican, which must approve the receipt of funds by state agencies, voted 3-2 to deny the insurance department’s request to use the remaining $333,000. The decisions were largely politically motivated. Accepting federal money to implement what became known as “Obamacare” could be read as tacit approval of the law, according to some Republicans.

“It was all over the Obamacare,” said Executive Councilor Ray Burton, a Bath Republican who voted in favor of drawing down the funds, in an interview with the Valley News last year. “Perhaps it was a bit of political posturing.”

This was not the only fight over federal dollars. Another argument came up this year when the New Hampshire Insurance Department was awarded $5.4 million to coordinate outreach and education efforts in the state. House Republicans blocked attempts to accept the money and, in June, a joint legislative committee declared an impasse. In August, the Insurance Department said it found a way to accept the grant money, much to the objection of Republicans.

State Sen. Andy Sanborn, R-Bedford, is among the Republicans who objected to drawing down the money. Sanborn, a Lebanon native who sits on the Joint Health Care Reform Oversight Committee, said the disagreements in New Hampshire’s Legislature are not just about politics and opposition to the ACA.

Since the ACA is a federal law, many lawmakers thought the federal government, not the state, also should be responsible for education efforts, Sanborn said. The $5.4 million would have been spent on a disorganized consumer education campaign, he said, that would have potentially confused New Hampshire residents more than helped them.

“By accepting the (money), it would have created three specifically distinct groups of people who are going to go out into the marketplace and do the exact same job,” Sanborn said. “Go advocate and try to find people and put them on the exchange. It’s the definition of government insanity.”

The point of the ACA, of course, is to do just that: reduce the number of people in America without health insurance.

As New Hampshire fought over federal dollars, Vermont crafted a more ambitious agenda.

In May 2011, Gov. Peter Shumlin, a Democrat, signed into law Act 48, a far-reaching health reform law that put the state on the path to creating a single-payer system. The law also settled a critical question that every state faced on the amount of control it wanted in running the new health insurance exchanges.

There were three options: States could design and run the insurance exchange themselves; they could leave the responsibility to the federal government; or they could share the duties. The decision each state would make would highlight larger ideological differences that went beyond health insurance.

“There’s a fairly strong split between Democrats and Republicans about what role the federal government should play in lots of different arenas, (and) health care is no different,” said Steve Norton, executive director of the New Hampshire Center for Public Policy Studies, a think tank in Concord. “The way it played out in the Affordable Care Act is a question of whether and how to establish a health insurance exchange and whether or not to accept federal dollars to explore how to do that.”

Vermont accepted federal money and became one of 16 states, along with the District of Columbia, that chose to operate its own marketplace. New Hampshire legislators passed a law prohibiting the Granite State from creating its own exchange.

Democrats and Republicans debated this question in Vermont, too, but it was remarkably civil compared with the deadlock in New Hampshire, state officials said. The same party controlled the Vermont governor’s office and both legislative branches, but Democrats did not merely steamroll the opposition on the road to health reform, said Senate President Pro Tempore John Campbell, D-Quechee.

“It was one where I think we all shared the same goal,” he said. “It was just a question of, how do we get there?”

State Sen. Kevin Mullin, R-Rutland, has been among the skeptics of health reform in Vermont and still doubts whether the state will achieve single-payer. But Vermont’s experience in prior health reform efforts has allowed for a more productive conversation now, he said.

Mullin was a legislator when Vermont created Catamount Health, a program to provide affordable insurance to Vermonters that will disappear at the end of this year when the plans purchased through the health exchange go into effect. Those debates happened when Vermont had a Republican governor, Jim Douglas, who Mullin credits with laying some of the groundwork on health reform in Vermont.

During discussions around Catamount in 2005 and 2006, legislators worked through ideological differences about government involvement in the insurance marketplace, points of contention that have only recently come to the surface in other states like New Hampshire.

“In Vermont, it was already something that we had been working on in a huge way, had some really contentious debates, had gone through those and were on the other side and were moving forward,” Mullin said. “Everybody realizes that the status quo wasn’t going to work, because it was becoming a bigger and bigger piece of gross national product. … I think that was why there was more collegiality in Vermont in trying to get something that might work better than the status quo.”

Preparing for Oct. 1

In New Hampshire, legislators and state officials are still arguing about whether and how to spend money for outreach, and also whether the state made the right decision about federal control of its exchange. That’s because Democrats regained control of the House in 2012 and fell just short in recapturing the Senate.

Earlier this year, New Hampshire was approved for a “partnership exchange” with the federal government, sought by its new governor, Maggie Hassan, a Democrat. In this arrangement, the state retains control over managing insurance plans and consumer assistance functions, while the federal government is in charge of designing and setting up the marketplace.

Sanborn was among those who opposed a state-run exchange. But his decision was made out of concern for cost, not ideology, he said. And every analysis he conducted suggested that it would cost the state a lot of money to do something that the federal government could do equally as well, if not better.

“I’m cheap,” he said. “I don’t think there’s anything wrong with that, especially when I’m spending other people’s money.”

Harding maintains that the decisions over rejecting federal money and running the exchange were political, and as much about New Hampshire politics as opposition to the ACA.

She would have preferred that New Hampshire design its own exchange, though she said the state may be better off letting the federal government take control.

“I think we may have ended up with an option that will benefit us in the long run,” she said, “if we can deal with the public education.”

On public education, Vermont not only has a more robust team of “navigators” — paid for with federal dollars — to reach out to consumers, but also more information to share. Vermont approved the rates consumers would pay in July and made the information public shortly thereafter. The rates offered through New Hampshire’s exchange are still awaiting approval by the federal government and have not been released.

Officials in both states have plenty of concerns. State Rep. Sarah Copeland Hanzas, D-Bradford, Vt., is worried that some Vermonters on Catamount will see their out-of-pocket expenses rise, even after the subsidies to help with higher premiums.

Mullin, of Rutland, is concerned there isn’t much consumer choice in Vermont — only two companies, Blue Cross Blue Shield and MVP are offering plans. Still, that’s one more carrier than in New Hampshire, where Anthem is the only one, at least until 2015, when Harvard Pilgrim Health Care has pledged to jump in. Sanborn regrets that Granite Staters still have so little information about the plans Anthem is offering through the exchange.

The differences between the two states may not matter all that much in the grander goal of improving access to care, according to some health experts.

Gregg Meyer, Dartmouth-Hitchcock’s executive vice president for population health, worked on setting up the nation’s first health exchange in Massachusetts. Every state will approach its exchange differently, he said, and in the end there is no one all-encompassing model. Discussions around Democrats and Republicans, red states and blue, tend to obscure the policy objectives that health reformers are trying to address.

Getting people signed up for health insurance isn’t the same as getting them “the right care, at the right time, in the right place,” as Dartmouth-Hitchcock officials are fond of saying.

“Exchanges are a tool. We often talk about exchanges almost like an end. ‘This state’s doing great on the exchange, that state is lagging behind in deploying the exchange,’ ” he said.

“Probably the most important lesson from Massachusetts is that it’s one thing to give people access to coverage, but it’s another thing to give access to care. … The goal of this is to give people access to care.”

Chris Fleisher can be reached at 603-727-3229 or cfleisher@vnews.com.