The Exchange in Vermont: A Model for Other States

On May 6, the Vermont State Legislature passed a law creating a new health policy for its state.  The Governor signed it into law that same day. The Act, H. 202, includes a fairly comprehensive set of policies that should serve as a model for other states to follow.

H. 202 not only creates an exchange for Vermont, but it also creates a public option to private insurance, places controls on pharmaceutical and provider costs, and unifies the administration of public health care systems.

The exchange, called Green Mountain Care, will be managed by a five-member board, will set reimbursement rates for health care providers and streamline administration into a single, unified system and will offer coverage from private insurers, state-sponsored and multi-state plans. It also will include tax credits to make premiums affordable for uninsured Vermonters. Residents and small employers will be able to compare rates from the various plans and enroll for coverage of their choosing.

An important feature of this law to note is that it attempts to cover every resident in the state, including undocumented people. This is a significant step forward – currently undocumented people can’t access Medicaid and are excluded from exchanges federally. Green Mountain Care will allow them to get the health coverage they need.

And there’s more promising progressive aspects of the Act – it creates a goal of achieving a state-funded and operated single-payer system by 2017. The move to a single-payer system will require an additional Federal waiver and much more planning and study, but the results could inform a path forward for other states.

If there is a weakness in the Vermont program it is related to racial and cultural health care disparities. The exchange will be required to be linguistically and culturally sensitive, as is required by the Affordable Care Act (ACA), but no provision is made in the Act for required interpretation in medical settings or other plans to overcome disparities.

There still are unanswered questions in the legislation.  Tax revenues to fund the plan are yet to be decided as are such issues as the method for merging individual and group markets. The plan will require a Federal waiver for implementation in 2014. Nevertheless, the major pieces of good health policy are included in H. 202 and other states should look to it as a model of what thoughtful and determined leaders can do with the opportunity for reform granted by the ACA.

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