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Guest Editorial: $200 million for Vt.'s health exchange? What's Plan B?

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Posted on March 16, 2015 |
By Emerson Lynn



The cost of the Vermont Health Care exchange recently took another jump. It is now expected to cost $200 million, which is the equivalent of billing every man, woman and child in Vermont $320.

For something that has yet to work.

Vermont’s exchange serves roughly 30,000 people (a fraction of what was intended,) which means the per-person cost is $6,666.

Blue Cross Blue Shield employs about 400 people and it services 240,000 Vermonters or eight times the number of people the exchange services. If the insurer paid each of its 400 people $50,000 a year, that would be $20 million in payroll costs; the $200 million that is being spent on the state’s exchange would last Blue Cross Blue Shield a full decade — at $50,000 per person.

But Blue Cross Blue Shield’s system is operational. The state’s exchange is not. Not even close. And the state is setting aside $27.7 million to maintain and operate the exchange for FY 2016.

Again, if the average wage were $50,000, the state could employ 554 people for the $27.7 million being budgeted for the exchange’s operational costs.

In Vermont, that’s a large business.

Back to the Blue Cross Blue Shield example: Does anyone doubt the insurer could have put together the state’s exchange needs and spent less than $200 million? Perhaps half that? Or a quarter? The same question could be asked of MVP, the state’s second largest insurer.

We are where we are for a host of reasons, including some of the poorest decision making in eons. But the primary reason for our predicament is that Vermont elected to go by its lonesome, and not be part of the federal exchange because the federal system would not allow us to proceed toward the governor’s single payer objective.

The governor, however, pulled the plug on the single payer objective. It was not affordable. The exchange is also supposed to develop programs to handle the state’s small businesses, which it has yet to do, and the state is asking the feds for a waiver until at least next year.

There is little about our current circumstance that is part of any plan envisioned by the Legislature when it passed Act 48 and marked the exchange as a “stepping stone toward Green Mountain Care, a system of universal coverage for Vermonters.”

That’s changed.

So what is Plan B?

If the state is $112 million in the red, the $27.7 million budgeted for the exchange represents a quarter of that amount, a significant percentage. Is this amount something the Legislature will be required to appropriate each year?

The numbers are too large, the direction vague, and the quality of the services too much in doubt for the Legislature to allow the question to go unanswered.

What is the end game? How much will it cost? What are our options?

It’s the start of the third week of March; these questions should be addressed before the Legislature adjourns in May.

Emerson Lynn, St. Albans Messenger

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