Vermont Legislature SmartTranscripts:

[Rep. Brian Cina (Member)]: We're matching today. Yes. Hi.

[Rep. Alyssa Black (Chair)]: Welcome. We're live now. It is Thursday, February 12. We have our first witnesses starting at eleven, but we thought So this morning, we all got together in here and we watched the Green Mountain Care Board presentation from yesterday, February 11. And they had two speakers, one from MedPAC or formerly MedPAC. Now I think he said he was an independent consultant, as well as a woman from Maryland, from NASHP. And they are looking, Green Mountain Care Board has been looking at critical access hospital Medicare cost sharing. There's due to federal payment methodologies with Medicare. And so I thought it would be worthy of our committee's time to just watch that presentation back. And so we're just going to spend a couple of minutes. If anyone had any thoughts about what we watched, and anybody who's watching, I encourage you to also go watch it. And it was really kind of some illuminating, inequitable structure that is not benefiting Vermonters receiving outpatient care in our more rural areas, particularly that are served by critical access hospitals and not necessarily even that it makes any difference to the hospital in how they're reimbursed, but essentially what the cost share is between Medicare and that. So didn't know if anyone had any thoughts on what we watched. Robert?

[Robert (last name unknown) – Committee Member]: My takeaway was that, and I could be wrong, but it seemed to me that the elderly staying lower for the services that they're getting than they really should. And we should look at that.

[Rep. Alyssa Black (Chair)]: Yep. Brian?

[Rep. Brian Cina (Member)]: I had a lot of questions, but we couldn't ask questions because we were just watching the presentation. So it might be good to take testimony so we can ask questions and dig deeper into the issues ourselves. And one ask I would have that is if we do that, we try to identify at least something that we can do to address the issue, and that it's not just taking testimony for the sake of taking testimony, but that we take some action because what we saw was that it appeared as if people who don't have a lot of money are paying money into a system and it's going back to the federal government or going to some mystery place, and we need to keep that money in the pockets of seniors. And I just don't think anyone should have a $20,000 bill for the hospital like that when money's being sent back to the government. It's like a foreign taxation almost.

[Rep. Leslie Goldman (Member)]: Yeah, I agree with both what comments have been said. I think it's a real impact in our rural elderly that is totally inequitable. It appears to be unknown nationally. So it all came about because of a public comment made to the Green Mountain Care Board, which astutely was noted and pursued and researched, much appreciated that it was taken on. And I think that we should take testimony for sure. And I also agree with Brian that I would like to see it attached to maybe a committee bill or something so that it could be actionable. And I need to learn a lot more. This insurance thing is really hard, but it doesn't seem like it would be that hard to make some kind of have an impact. And I'd like to

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: see us do that. Yeah.

[Rep. Alyssa Black (Chair)]: I mean, think as we were watching it, I probably notated to myself about 30 questions. So I would personally love to take testimony so we could ask questions. Val? Is it primarily Medicare Part B patients? Medicare Part B outpatient and it's due to federal payment structures and how they reimburse critical access hospitals and the disproportionate cost share that the patient has to pay or their Medicare supplement has to pay. And I

[Rep. Leslie Goldman (Member)]: think that was important because it impacted premiums for Medicare Part B supplements. So if you think you're not paying, you actually are.

[Rep. Alyssa Black (Chair)]: It's so many questions. Allen?

[Rep. Allen “Penny” Demar (Member)]: Yes, I think everything looks good. I think we got information, but that's the first time we've heard it. I think before we take any action, I want a lot more testimony from all parties. Absolutely.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Yeah, absolutely.

[Rep. Alyssa Black (Chair)]: Wendy? I just thought it was

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: I mean, it's so counterintuitive that an outpatient

[Rep. Alyssa Black (Chair)]: is higher than the inpatient. What we're trying to

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: do is get people out of the hospital to lower the rate. Think this is extremely

[Committee staff/technician (unidentified)]: important. So,

[Rep. Alyssa Black (Chair)]: I am more than happy to work with various people to schedule testimony to see if there's anything that we can address or anything that needs addressing. Mainly fact finding to figure out the scale of the and how it's really sort of affecting things. So, with the committee's consensus, like to do that, okay? I can do that. Great.

[Rep. Leslie Goldman (Member)]: Thank you. What's that? A good idea to have a slide together. I think it was really good to have this kind of conversation.

[Rep. Alyssa Black (Chair)]: And I also still encourage everybody to go back and watch the week, two weeks ago?

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: The twenty eighth.

[Rep. Alyssa Black (Chair)]: The January 28. It was very heavy. It was over three hours, but it was a lot around reference based pricing and how this can be structured within hospitals. Okay, great. So we'll move on to our 11AM time. And we have

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Addison along. Here you are, hello, right here.

[Rep. Leslie Goldman (Member)]: Oh, he's not on the screen.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: You're real. He is here. Sorry, I missed the testimony last week. Was sick, but I'm much better.

[Rep. Alyssa Black (Chair)]: And you're here to go over a technical analysis that we had done, I think, two years ago? Yeah, you asked for it two

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: years ago and we gave

[Unidentified person (possible witness support)]: it last one chart. Yes. Great.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Thank you for having me. For the record, I'm Addy Stromlow. I'm the Deputy Commissioner at the Department of Vermont Health Access. I think you all know this, but in addition to Medicaid, I'm responsible for the qualified health plan marketplace. So in particular, the individual market where people enroll through the exchange that we administer at Diva. I just wanted to give a couple of contextual remarks before we get into the report itself, which is quite technical. Just make sure you want me to go into that level of detail. Just keeping it on a high level to start with. The part of the market that we're talking about is very small. It's about 30,000 people. But as you all know well, it's a really important part of the market because it provides coverage for people who don't have access to Medicaid, Medicare, or employer sponsored coverage. And the other thing about it is that because of the federal subsidy structure that's built into the exchange, we do have mechanisms to try to help with out of pocket affordability from a member perspective. So again, during the 2024 session, you all directed us to study strategies to improve affordability in the marketplace and expand coverage. Some of this was in the context of talking about expanding Medicaid. But a lot of it was about the expectation that the federal subsidies that we get through the exchange, the enhancement that we got through the American Rescue Plan Act during the pandemic, were going to expire at the 2025. And that has now happened. So we submitted the report early last session, in early twenty twenty five. And again, I'm happy to go through those findings in some detail today, but just wanted to connect some dots. The upshot of that report was that there may be some viable strategies and ways to leverage federal dollars through that mechanism that I mentioned, both to improve the coverage landscape for Vermonters. But they all come with a cost and a cost that wasn't budgeted for last year and isn't this year and that we have to discuss in this context. And those strategies are reinsurance, which we've talked a little bit about in the context of the DFR bill, the expansion of our state subsidy program, and then something called the Basic Health Program. So those are the three things that we can talk through in the report. I just wanted to mention that even though we didn't pursue any of these further once we submitted the report, the state did do some really good work to try to help with the expiration of the federal subsidies. We did something called silver loading that I'm going to guess that you don't want me to get into detail on. But it's so hard to understand, but it's a way to leverage more subsidies for the people who are eligible. And that was really effective in terms of softening the blow of the expiration for people who remained eligible. We also, as you know, have a state subsidy program, which is something we want to look at further. But many other states didn't have either of these things going into the expiration. And so I just want to make sure we get credit for the fact, and you all get credit for the fact that we did do some work to try to help with that situation. Then the other thing I think relevant to all of your discussions this session is that the real affordability issue in our state is around the cost of care. And so the strategies that we have in place and have explored provide ways to maintain access to coverage by providing affordability band aids, essentially, helping with those out of pocket costs to afford these high premiums. So I just want to make sure that distinction is clear, because member access is what we do at Diva, and we want to continue that work, but in parallel to these other important conversations that you all are having about the underlying cost control and pricing structures in different pieces. The last I'll just give away the farm a little bit. I'll go over these three things that we thought were worth exploring. We are continuing to explore them. We got the Rural Health Transformation funding that you all are aware of. And one of the projects in there is to continue with pre implementation analysis of some of these affordability strategies for the marketplace. So we are planning to continue that work, subject to CMS approval, and do have resources to do so, most likely, which is exciting. So just wanted to give you that top line that we think these are worth pursuing and will. And then depending on the outcome, we'll come back to you all and have a discussion about budget and next steps in terms of legislation. So those are just introductory remarks. I now have a slide deck on the details, but do you want to ask any questions first?

[Rep. Alyssa Black (Chair)]: Your questions first, let's get into the slide deck. Okay.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: So is gonna helpfully run this

[Committee staff/technician (unidentified)]: so that I don't get flustered with the technology, which I usually do. I think just let me know when we're good. Okay.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: We should be good. Good to go? Okay. Okay. So this is just a refresher. Again, '20 24 session, you all directed us to conduct a technical analysis on the marketplace. There were several different components of this. One was about the marketplace structure at the time when we had a merged individual and small group market. One of the outcomes of the study is that we don't anymore, and we did that last session together, which was very helpful. Then we were asked to look at targeted affordability strategies in light of the subsidy expiration, which is kind of the meat of what we'll get through here today. And then broader affordability strategies in the context of expanding Medicaid. We engaged with several partners because we hopefully were appropriated some funds to do this work, both for technical assistance and actuarial assistance. And we did it very transparently with multiple stakeholders being involved and particularly in conjunction with our partners at DFR and Green Mountain Care Board. So the key findings that we wanted to go over today are and I should just say, these slides, we put them together last year. So they're just really stating what is in the report that we submitted. They don't reflect further work, although I can comment on some of the things that I've updated since then. But I'm using products that we did in the context of that study. So key findings. Again, already mentioned the separate markets. That was kind of the one piece that provided some small grief to the small group part of our marketplace insofar as those rates can be a little bit lower than the individual side when the markets are separate. Targeted affordability options. Again, we will talk through these, but that's where I want to focus on the state subsidy program, Vermont premium assistance, as well as this concept of reinsurance. And then in the longer term initiatives, again, that was more in the context of Medicaid expansion. But the strategy that we focused in on is something called a basic health program that seems really promising for our state and that we can talk through. So next slide is just As just a summary, one of the things that our technical partners did in this study is project the impact of the subsidy expiration. You can see the numbers here. And what's interesting is that we're pretty spot on with what the impact would be. The loss is a little closer to $70,000,000 but right in that range. Because, as I said, the subsidies did, in fact, expire at the 2025. So we now know what people are paying for 2026. Premium costs, we went through that whole process with the Green Mountain Care Ward last summer, so that looked a little bit different. But the overall enrollment change is hovering right around seven percent or 8% right now, with the loss of almost 2,500 people. 2,500. And then the overall percentage of our population that is subsidized has reduced from about 92% down to close to 75%.

[Rep. Alyssa Black (Chair)]: Do we know of that roughly 65,000,000 or the spot on 65,000,000? Do we have an idea of under or over 400%

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: or over 300%? How much of that is borne by people who have completely lost any subsidy whatsoever? That's a good question. I think we can do that analysis. I think just intuitively that you're right, that the over 400% group lost everything. So that's a big portion of it. And the folks that remained eligible, but just eligible for a lower amount, the folks who are disenrolling, not surprisingly, almost all of them are over 400% of FPL. So it's the ones who lost

[Rep. Alyssa Black (Chair)]: everything. It just seems like we talk about 65,000,000 and we think about it in terms of 30,000 people. But is it really 65,000,000 mainly born by, say, 10,000 people or 15,000 people?

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: That's a great question. I'm happy to see if I

[Committee staff/technician (unidentified)]: can get that breakdown. Okay.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Okay. So the next slide gets into the first thing that we looked at in earnest, which is Vermont Premium Assistance. That's a statutory program that I think you all put into place back when the Affordable Care Act was passed. It essentially supplements the federal subsidies for premium assistance for individuals with income up to 300% of FPL. A really interesting thing about this program is that the way we pay for it is through our eleven fifteen Medicaid waiver. So there's this other component of needing to negotiate with the other side of the federal government about that funding, which is something that's gonna come up in another year or two. So it's just something to be aware of. The other thing just about the structure of this program that's interesting is that it essentially just reduces by 1.5% the amount of someone's income that they have to spend for health care. And the other piece is what the subsidy will cover. So by definition, slightly higher earners get more. So that's just something to keep in mind about the structure and why it might make sense to revisit at some point. And that's what we were looking at. What would it take to use this program to either partially or fully replicate those enhanced federal subsidies? As you can see, both were pretty cost prohibitive. But we think looking at the structure of this program, particularly because we're going to have to renegotiate it soon with the federal government, would make a lot of sense to continue. And as I said earlier, this is one of the pieces that we have in our Rural Health Transformation project, which will start imminently. We're in 'twenty seven? 'twenty seven.

[Rep. Alyssa Black (Chair)]: 'twenty seven. So before the next We're working on it through '26.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Yeah, we're starting to work now. Yeah, but

[Rep. Leslie Goldman (Member)]: I just wanted to know in time of

[Rep. Alyssa Black (Chair)]: So I had asked this because we were talking about our eleven fifteen waiver the other day, and I had asked about,

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: are we I realize that up to 300% is permissible currently under our eleven fifteen waiver. But does our eleven fifteen waiver specify how much we can supplement? Is there room to supplement more without having to change our waiver? So a couple of things. There is room to supplement more up to 300% of FPL, under our current waiver. The amount that's specified beneath that is in the state statute. So that's a legislative conversation, not a waiver conversation. The other thing is that no matter what, this program is going to be subject to conversation in the context of the waiver negotiation. I think there's a lot of uncertainty about what would be permissible in terms of the renewal of this program under the waiver.

[Rep. Alyssa Black (Chair)]: So when you're giving the 3,800,000.0 for 9,000,000 total funding, is that something we could do right now without waiver And would it complicate our negotiation? And would it take legislative action? Obviously, it would take an appropriation. Would it take changing statute? And would it put in jeopardy that under our eleven fifteen waiver renewal?

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Yeah, speaking from a totally neutral position, I think that you could make that change with a change in legislation and appropriation, changing the waiver. I think everything is gonna jeopardize or at least influence the federal conversation. But I think technically speaking, those pieces are in the state law, not waiver. In Doctor, go ahead.

[Robert (last name unknown) – Committee Member]: This may be a little bit off the subject, but I'm thinking of ways to reduce premium. Working people, if a group of small businesses got together, one or two employees, three employees, formed an association then applied to healthcare. Would that have any impact? You talked about this incentive impact, would that have a better impact?

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: I a little bit need to defer to my colleagues at DFR on anything to do with this concept of association and kind of forming together to buy certain forms of coverage. If the group was getting together to buy a qualified health plan, there could be an element of the stuff I'm talking about that could help reduce premiums for the qualified health plans. But if you're talking about some other kind of coverage, like self insurance, Nothing about what I'm talking about here has any bearing on that.

[Rep. Alyssa Black (Chair)]: And just to clarify, the partially replicating the subsidies, is that $13,400,000 to basically take all income levels and reduce it to make it 1.5%? Is that what you mean by partially, the 1.5% reduction?

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Yeah, I think that's right. So all income levels Sorry.

[Rep. Alyssa Black (Chair)]: Actually, I'm not totally sure what that piece was. It would obviously cost 60 some million if we were replace 65,000,000 if we were replacing the Yes,

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: it wasn't to replicate full APTC. I think it was to apply something like the 1.5 across the population, yeah, across the population, subject to the expiration.

[Rep. Alyssa Black (Chair)]: But it would require a waiver?

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Yes. Doing anything with a different FPL level would require a waiver. So I'm gonna talk about, I think, reinsurance next. But I'm gonna later talk about something called the Basic Health Program, which is a program that can essentially offer alternate coverage to the lowest income population up to 200% of FPL. If we were to pursue something like that, it could free up dollars that we currently use for Vermont premium assistance and allow us to use those elsewhere in the income chart for our population. So potentially, we'd go over 300% trying to address that cliff at 400%, which is now a true cliff again, where it wasn't under the enhanced subsidies. So just wanted to keep that in mind. There are ways that these different proposals could work together to provide a better landscape throughout the marketplace.

[Rep. Alyssa Black (Chair)]: Are you going to come back to this? Okay. Yeah. It comes to

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: PTC, federal PTC. That means premium tax credit. Sorry for the tax income. Yes. Okay. So the next slide is about reinsurance. We And can go back to We'll just do it in order. We'll do reinsurance, which we spoke about the other day. Probably don't need to spend that much time on this. This is something that would Essentially, a program that would reimburse issuers for high cost claims and thereby allow them to bring down the gross premium across the individual market. There's a special way of implementing this program through a federal waiver that would allow us to get funds that the federal government would otherwise be using on subsidies if we hadn't reduced the premiums, and we can get that money as a lump sum pass through amount to help fund the program. This is something that a lot of states have in place. I don't know of any state that's done it under the current federal administration, so I think there are some questions about what that negotiation would look like under the waiver. It's a totally different waiver than our eleven fifteen demonstration. That's something called the thirteen thirty two waiver. But prior to this administration, these were very standard waivers and a way to further leverage federal dollars using that APTC premium tax credit structure in a different way. And I think I gave these figures when I was in a few weeks ago on how much state funding it would take. These, again, are outdated at this point. But way you would build the program is, hey, you want to try to reduce those gross premiums by a certain percentage. How much would it take in state dollars to get basically twice as much, more than twice as much in federal dollars to make that happen?

[Rep. Alyssa Black (Chair)]: And I know we heard about this the other day, but frankly, I'm still not quite sure I understand this.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: About to go there. Happy to break it down.

[Rep. Alyssa Black (Chair)]: So essentially, there's a thirteen thirty two waiver. I can't believe I know all these waiver numbers. At that. This happened to my life. There's another waiver where if we invested state dollars, we could draw down federal dollars to basically go back to the 8.5% for those over 400% that could reduce their premiums for that?

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Wait. Are you talking about this one? Yes.

[Rep. Alyssa Black (Chair)]: What would the reinsurance actually do?

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: The reinsurance would be a fund that's probably managed by DFR, Us, or someone on the state level that would pay MVP in Blue Cross and Blue Shield for their very high class claims. We'd have an attachment point and say, Okay, everything over this amount is actually going to come from this fund for this year, and we have a budget each year. This is a concept that existed under the Affordable Care Act that the feds ran for the first something like three years of the program, and then they discontinued it. And it was very helpful. It just helps them plan better what their pricing is going to be.

[Rep. Alyssa Black (Chair)]: So they would be able to lower their premium because they would know that they wouldn't have to account for these high dollar claims. Exactly. Yeah. And the way

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: the federal money works is that by reducing the premiums, we're saving the federal government money in subsidies. Because the higher the premium, the higher the subsidy amount that we get from them. Let me know if you want me to go into that in any more detail. But essentially, bringing down the premiums also benefits the federal government. This waiver is a way to get those savings that the federal government has experienced back to the state as a lump sum and then put it into the fund for reinsurance and help. And that's where the money is coming from to help the issuers keep the costs down.

[Rep. Alyssa Black (Chair)]: If we calculated 10% of the premiums for people over 400%. No, it applies to everybody, though, doesn't it?

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Yeah, this one is The benefit of it would be felt by the entire individual market. It would be the gross premiums coming down irrespective The money that we get from the feds is tied to the net premium through the subsidy, but this is not specific to the subsidized population.

[Rep. Alyssa Black (Chair)]: This is a really dumb question.

[Committee staff/technician (unidentified)]: It's not.

[Rep. Leslie Goldman (Member)]: Okay, if it is. Right now,

[Rep. Alyssa Black (Chair)]: for all 30,000 people or however many are left in the individual market, if you tallied up all their entire premiums, how much are people paying for insurance in the individual market? Without subsidies or anything, just maybe you added up everybody's premium, how much

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: is that? Unless anyone in the room knows, I can

[Rep. Alyssa Black (Chair)]: look it up because it was

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: in the report, but I don't have it on the slides.

[Rep. Alyssa Black (Chair)]: So I'm not the only one to ask that dumb question.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: No, no. And it's kind of the basis of

[Rep. Alyssa Black (Chair)]: Yeah, this

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: so someone could probably figure it out who's better at math. Okay, Leslie.

[Rep. Leslie Goldman (Member)]: Just to tag onto that question, how many claims are going to require reinsurance so that it

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: is worth doing them? So that piece would be a program design question. We would build the program probably in conjunction. I don't know

[Committee staff/technician (unidentified)]: if it

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: would But a yeah, you have to figure out. I think they refer to it as an attachment point. Or if it's certain types of claims, certain types of services that are covered and not others. There are various models throughout other states that would have to be decided before we implemented anything. And I think before we applied. I think that it's going be hard for me to find the figure that you're asking for, Madam Chair, but I'm happy to follow-up with that.

[Rep. Alyssa Black (Chair)]: I think it's in the report, so I'm I

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: think it's in at least the appendix where we calculated this insurance amount. If you could just remind me to follow-up on that one.

[Rep. Brian Cina (Member)]: I got it, yeah.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Okay, great. The one other piece I wanted to mention here is that the reason why we put language in DFR's bill is that we require legislative authority to even pursue this program and start the conversation about a waiver. So in the event that we're able to make progress this year outside the session, we wanted to just make sure we had that covered. Before doing anything, we would need an appropriation. So we'd obviously be back here talking about it next year. But that is why that topic came up already in the context of the DFR bill. So we could not make this effective for plan year 'twenty seven? It would be for 'twenty eight? Correct. Okay. At this point, it's going to be really hard to do much for 2027, given how far along we are with planning for that year. Is it Okay to move on or not?

[Committee staff/technician (unidentified)]: Yeah. I think

[Rep. Alyssa Black (Chair)]: I have a much better understanding.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Thank you. Okay, yeah, no, sure thing. Okay, so basic health program. So this is this really interesting idea that also exists in the Affordable Care Act, but it's not a waiver. It's an entitlement program that if you qualify for it, you should be able to get it. Actually, District of Columbia just implemented a BHP this past year. So I haven't heard that there's trouble with getting these approved. Although other states that have these programs have had a lot of challenges based on some of the other federal changes that have come through HR1. Anyway, so just to say, there is a federal component to this one, but it should be more straightforward than the other waivers that we plan to negotiate in the near term. So Basic Health Program is essentially an alternative coverage program for individuals who would otherwise be in a qualified health plan up to 200% of FPL. There are a lot of questions about what that coverage looks like. Most states contract it out to either a Medicaid MCO plan or a qualified health plan issuer. But they make the design very customer friendly, with very little cost sharing, little to no premium. And then they regulate the reimbursement structure. Usually, it's tied to something to do with Medicare and enable a very Medicaid like coverage for this lower income population that is not eligible for Medicaid. And similar to the reinsurance, the way it's funded is that we can say, Hey, federal government, by giving this population this other form of coverage, we're saving you this amount of money in premium tax credits. You give that to us as a lump sum. And that's what we'll use to fund this program. It's actually 95% of the total, not the full 100%. So in the study last year, we asked some of the actuaries to do the math on just, it wasn't that detailed, but on a potential program design for basic health program in Vermont. And the math netted out well. It netted out that we would get a surplus if we were to go through this program and basically be able to fund it. There's a lot of things we'd have to figure out, again, about the reimbursement structure. I think we want to be really careful with our individual market because people are leaving it and there's a lot of volatility and make sure if we were to pursue this, do it in a way that maintains stability. And so there's questions to figure out, but there's also a lot of promise. So this is one that we really did want to keep the opportunity alive to look at further. And we'll be doing so under the context of the Rural Health Transformation work.

[Rep. Alyssa Black (Chair)]: This is basically the model of what we had catamouth.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: I think it is similar. I wasn't here then, so I don't know that much about that program. But I think the concept is similar, in that it's a publicly mandated and structured program, largely administered, that is a simple and designed, very little cost sharing, and targets a lower income population and then move to the market.

[Rep. Alyssa Black (Chair)]: Because we're the only state that doesn't have sort of a managed care component because we are our own managed care diva, could we use that or would we have to basically outsource it to one of our

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: QHPs? You've got to the heart of the matter. So we were thinking that would be really interesting to explore, if it would be a DIVA. DIVA could serve as the issuer of the Basic Health Program. That's unprecedented insofar as none of the other states that have done this have anything other than a private health insurance company or several administering it. So that would just produce a little bit more uncertainty in the federal conversation. But that's exactly what we'd want to look at, is if that is possible. And if not, is there a way to almost replicate a Medicaid like coverage structure but administered by the issuers?

[Rep. Alyssa Black (Chair)]: Val, did you have questions?

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Thank you. So through this basic health program, if there is a surplus, where does the surplus go? Right back into the program? Yeah, I think we to hold it in trust, and there are only very particular uses. And I think most of them are just the coverage itself, main claims, everything else. I don't know a lot about that, but I do know that it's pretty strictly outlined in the federal statute, in terms of what you can do with the money. It's not just a free audit money to do anything with. But New York, who I'm not sure if they have it anymore, but they did something really They were able to get a version of their basic health program up to a much higher FPL level, I think maybe even 300%, and have done a lot of interesting things with their BHP trust fund to help with subsidies for the rest of the population and other things. So there have been some downstream innovations from the money. But I think, again, they're parameters that are

[Committee staff/technician (unidentified)]: set out by the federal government that we have to abide by. The

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: last specific thing I want to mention on BHP is that we didn't have the green light to pursue it anyway last year. But there are some complications that relate to silver loading, where right now with our enhanced silver loading, what that population up to 200% is getting on the exchange through qualified upland is very good. It's very, very subsidized. And if we were to replace that with the basic health program, we wouldn't get the same load through the silver loading policy, because the population that it's meant to benefit would be gone in another coverage program. So that was a reason why, 11 until silver loading had to be rolled back in Vermont, didn't necessarily make sense to pursue a basic health program. We are now in a place where there's been a recent proposal from the federal government that looks like it might implicate our silver loading in Vermont. We're going to talk to the Green Mountain Care Board about that soon. It's just a proposal at this But there's been a lot of discussion federally about clamping down on silver loading among states. So if that is, in fact, where things are going, it's another, I think, really good reason to keep looking at basic health programs as an option. Go ahead, Karen. If I may, very briefly, without getting too weaving, silver lining. Yes.

[Rep. Alyssa Black (Chair)]: I'll try. I think

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: it's the concept of inflating the premium for a silver plan, because that's what the subsidy now is tied to. So when you have a higher silver premium, you can get more subsidies. How

[Rep. Leslie Goldman (Member)]: do you do that?

[Rep. Alyssa Black (Chair)]: Never mind. I just

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: looked over at our Health

[Rep. Alyssa Black (Chair)]: Care Advocate, and I hate to say this, I dread saying this, but we might have some time. Could you give us another thirty minutes of what the heck is silver loading?

[Robert (last name unknown) – Committee Member]: Give you thirty minutes or thirty

[Rep. Alyssa Black (Chair)]: minutes. So let's plan on Mike to begin to give us a refresher on silver loading.

[Rep. Brian Cina (Member)]: Can you do like a twenty minute version?

[Robert (last name unknown) – Committee Member]: I think Mike's strategy it makes sense for us to understand the payment parameters rule to understand whether we're doing it to understand it

[Committee staff/technician (unidentified)]: or whether we're losing it before. We move. That's a good point.

[Rep. Alyssa Black (Chair)]: We also want to know if we're losing it, the impact that it could have. And what we might need to do to mitigate the

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Yeah, we looked at in the study, we did look at what that loss of the APTC would have been if we hadn't had the enhanced overload that we have now. And it was $110,000,000 So it's really significant It's serving a really significant purpose in our market right now, and it would be really important, I think, to look for an alternative if we can't do it anymore. So just one clarification. Is silver loading a negotiation with the federal? Is that with them? It's a great question. The reason that we silver load is because the federal government stopped paying for a different subsidy that they were supposed to be paying for on the state level. It's called cost sharing reduction. So under the first Trump administration, they they stopped sending those payments to our issuers. And as a way to make up for that loss, the Green Mountain Care Board started to direct the silver loading, which is increasing the silver amount to pay for that benefit. The benefit didn't go away, just the federal money went away. So the existence of silver loading is purely on the state level. It's driven by the rate review regulator in whatever state you're in. And there are different models out there. And the one in Vermont is pretty robust. But it's not a federally negotiated concept. But it looks like it's going to be federally regulated going forward. Okay.

[Rep. Leslie Goldman (Member)]: So just so I understand, the Green Mountain Care Board just sets that rate at a higher rate, and the Feds just say, Okay. Okay.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Yeah, until now they haven't had the opportunity to say no, because rate review is something that happens on the state level. But now they might. Do or might. It's a proposal.

[Rep. Alyssa Black (Chair)]: Is this the time that I get to publicly give kudos to you all on moving people in the exchange to more advantageous things? Because you did a really heroic effort at that.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Thank you very much. Yeah, that was a big effort. That was kind

[Rep. Alyssa Black (Chair)]: of the big We can understand it. Imagine trying to do this as plan.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Definitely. Yeah, think that was a really good, a really collaborative effort for not this year's open enrollment, but the previous year's to really take advantage of those additional subsidies. Unfortunately, having the following year be a subsidy expiration experience has been really, really hard and probably worse because of the strong work we did the year before that. But I think it

[Committee staff/technician (unidentified)]: was the right thing to do it. We

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: are where we are. Thank you. Thanks. Any other questions? I said, we're continuing to work, starting to figure out what it's going to look like under the Rural Health Transformation work, be happy to report back when we have information to share.

[Committee staff/technician (unidentified)]: So,

[Rep. Alyssa Black (Chair)]: is there We have the DFR bill that has reinsurance in it. Is there anything legislatively that you think that you would need to be able to explore some of these options? Or is that something that you just want to keep exploring on your own? Or there anything you need from us

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: based We on these thought about that really carefully going into this session. I think we definitely are looking for this authority on the thirteen thirty two waiver for reinsurance. But otherwise, I think this is a next session conversation where, depending on the outcome of the work, we will want to work with you to legislate the program design for some of these concepts, if they make sense. And I guess the other thing I will just say is it's uncharted territory with the Rural Health Transformation money. If something happens with that, it's not work that we can completely absorb. So if we need more assistance with building these programs, we might be coming back to you again if

[Committee staff/technician (unidentified)]: something goes wrong with the federal money.

[Rep. Alyssa Black (Chair)]: Since this is really about affordability in the individual market and plans, have we looked at plan designs and whether or not we've had I mean, a common criticism that you hear, and I don't really even know if it's based on reality, we hear all the time that our benefits are too generous and that's why insurance costs so much in this state. We hear that there's not only is there not competition between insurers, but also that there's limited plan designs. And that also is why costs are so high. Is there validity to any of these? And if there is, have we looked at some of our plane designs to see if we should I mean, if we're just strictly focused on affordability, is there anything that we should be doing that we should be looking at in our existing progress or plans?

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Thanks. I think that just the first few comments you made about the lack of competition or the generosity of the benefits, I really want to defer to DFR on that, though I do think there's I'm not sure Those are not the root cause of the problem. The problem is the cost. So we had a very brief conversation about potentially looking at benefits as a lever in this conversation. The initial, it was actually using data from out of state, so someone needs to check this. But rolling back the benefits wouldn't make that much of a difference in premium, is the shot. I think we'd want to

[Committee staff/technician (unidentified)]: look at that a little

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: bit further. But there are some pieces around design that could, to your point. One is that there's some restrictions on cost sharing for prescription That's something that I think we'd like to look at a little bit closer and see if there's some flexibility to be gained there that would result in premium reduction. And then in general with plan design, we're a little stuck because we have to rely on federal guidelines around actuarial value. So the structure is a little bit there's pieces that we just have to adhere to that make us have less flexibility. But with the separation of the markets, one of the things we're doing this year is really encouraging issuers to think about the small group designs differently. In general, they're non standard designs. Because we dictate certain standard design plans, and then the issuers can offer whatever else they want. And so we've definitely been talking about, is there anything to look at there that could help with affordability in the plan design process? Which is something that we do every year in collaboration with DFR, Green Mountain Care Award, Health Care Advocate, and the qualified health plan issuer. So that is a good place to look. I don't know if we can achieve major savings, but there's at least some flexibility. Yeah, Leslie. So the Joint Fiscal Committee heard a presentation on health care transformation. And one of them, I think, says a statewide assessment of options to improve healthcare coverage affordability. And that's, I think, exactly what you're talking about. Yes. And it's asking for $500,000 Is that the right amount? Is that sufficient

[Rep. Leslie Goldman (Member)]: to do what's needed? I thought it just in the first year, I mentioned.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Yes. So that would fund the actuarial support and the technical assistance to build the programs and fill the applications or waivers for the federal government. That's what we think it would cost. And again, our next step is to figure out who to pay those dollars to so that we can make it happen. But then there would need to be a totally separate conversation about funding the programs if we hosted That would be an appropriation on the state level.

[Rep. Leslie Goldman (Member)]: Because some of what I heard through that was like, Oh, today it's okay, but tomorrow it's not. And as we go through this thing, and is that also, you think,

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: at risk or maybe

[Rep. Leslie Goldman (Member)]: I think that's

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: that particular program is just so new that we don't know. And we know it's going to be carefully scrutinized. So I just don't want to overpromise.

[Rep. Alyssa Black (Chair)]: I just want to go back to a question I had asked and you had answered just to get clarification. So the cost sharing for prescription, which is lower, actually could have an effect. But if we got rid of that, because of the federal requirements for certain actuarial values, would everything have to be readjusted?

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Or

[Rep. Alyssa Black (Chair)]: would we be able to just eliminate that, save on cost of the plan, or would we have to readjust the actuarial values on each plan level design?

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: I think the answer to that is we could just get rid of it. From a federal perspective, it's just purely a state issue. And also, I just want to be clear, getting rid of cost sharing protections creates other exposure from an affordability perspective. But if we're talking about premiums, it did seem like that might be worth exploring. Go ahead, Frank.

[Rep. Francis “Frank” McFaun (Vice Chair)]: Did I hear you say a minute ago that you were talking about actuarial analyses and Rural Transformation Health Grant? And I just wasn't clear if I heard, can you use the Rural Transformation Health Grant money for actuarial analyses? That's what we are proposing to do. Okay, so you can, it sounds like, Okay, so can you use it for any kind of actuarial analysis?

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: We wrote a proposal specific to these marketplace affordability strategies that requires actuarial analysis. So I think I can't speak to everything else in that grant, but I can only speak to this particular proposal. So

[Rep. Francis “Frank” McFaun (Vice Chair)]: I'm going to ask another question and you might say I can't speak to that and that's okay. You inspired me when you were talking about using that one time money for actual analysis that could it You may not be recommending this, but is it theoretically possible that an actuarial analysis on universal primary care could be funded with that grant money?

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Definitely can't speak to that, but I appreciate the question. And I would defer to colleagues who are directly managing that program.

[Rep. Francis “Frank” McFaun (Vice Chair)]: Okay, so you're not saying no, you're saying you don't.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: I'm saying I can't, I'm not in charge.

[Committee staff/technician (unidentified)]: Yeah, oh, okay. Well, thank you.

[Rep. Alyssa Black (Chair)]: Thank you, Addison.

[Addy Stromlow (Deputy Commissioner, Department of Vermont Health Access)]: Sure, thank you very much, Addison. Thank you.

[Rep. Allen “Penny” Demar (Member)]: Thank you very much.

[Rep. Alyssa Black (Chair)]: Thanks. Are they ready? I think we're done.

[Committee staff/technician (unidentified)]: At what time, one? We

[Rep. Alyssa Black (Chair)]: are back here at 01:00. Alright, we can go off

[Rep. Brian Cina (Member)]: of