Analyzing Vermont's Health Insurance Market

Dates of Project: October 1, 2011–June 30, 2012

Field of Work: The creation of state health insurance exchanges

Problem Synopsis: The federal Patient Protection and Affordable Care Act (ACA) requires each state to establish a health insurance exchange for individuals and small businesses by 2014. Exchanges are a way to organize health insurance plans so individuals and small businesses can compare them and buy high-quality, affordable health insurance. All health insurance plans sold through the exchange must be “qualified health plans” (provide essential health benefits, follow limits on cost-sharing, and meet other requirements).

Synopsis of the Work: The Vermont Department of Financial Regulation, Agency of Administration, and Department of Vermont Health Access subcontracted with a consulting company to analyze Vermont’s health insurance market and make recommendations based on the analysis to inform the development of the state’s health insurance exchange.

Key Recommendations

  • Vermont should keep the definition of small groups to 50 or fewer employees until 2016, when it will expand under the ACA.
  • Individual and small group purchasing should occur solely within the state exchange.
  • The individual and small group markets should be merged into one market in the exchange, since individuals and non-association small groups would experience premium decreases.

The legislature adopted all of the recommendations in Vermont Act 171 (2012), which amended state insurance law to comply with the ACA and established the way that the health insurance exchange in Vermont would work.

"The work funded under this project was instrumental in ensuring that the state [agencies responsible for health care reform] had information necessary to advocate for the unique nature of Vermont's exchange,” stated Robin Lunge, JD, director of health care reform in Vermont and project director.