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Vermont Auditor Releases Report On Vermont Health Connect

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The Vermont state auditor has issued a report that finds serious problems remain with Vermont Health Connect, the state’s insurance exchange, and it questions whether the state can fix them in a timely manner.

In his cover letter to legislators Vermont State auditor Doug Hoffer is blunt.  In his first sentence he notes that the state has struggled to run the health exchange since its launch.  He notes that although efforts have been made to fix problems, manual corrections have ended up making things worse.
Because the state has conducted other audits of Vermont Health Connect, Hoffer focused on corrective actions to resolve ongoing problems with the exchange.   “Each one of those reports, which were quite extensive, included dozens, if not hundreds of recommendations about all aspects of the health exchange.  So we said now that we have all this information let’s review it and the question becomes has the state taken this seriously and decided to find and direct the necessary resources to solve these problems?  And as it turned out they have made some progress. But the problems were so extensive that there’s still an awful lot of work to do.”

The audit shows there are significant obstacles and challenges blocking successful implementation of the exchange. Hoffer says the state is making progress, it’s just taking a very long time.   “A couple things that need to be done sooner rather than later is address the continuing problem of change of circumstances, which is creating a lot of problems for people who are trying to change something in their file. That all has to be done manually which just doesn’t work. The other is that renewing your policy has been a problem for quite some time. Also even though they have corrected the most critical IT security risks there are still 70 that are characterized as moderate, but are still quite serious. They need to be addressed.  And there are other problems particularly with premium payment system, which is a mess. So those are just the beginning of a short list of the things we have to do.”

Vermont Chief of Health Care Reform Lawrence Miller says they are aware of many of the issues in the audit and he’s not surprised by its results.   “We have been pursuing strategies to address all of the issues identified in the audit. Obviously operations are still troubled and will continue to be until the automated change in circumstance functionality is completed. But the audit report certainly is consistent with my observations of Vermont Health Connect.”

The audit does not recommend what the state should do. But it does suggest the state consider a cost-benefit analysis on alternatives to the state-run exchange.
House Minority leader Republican Don Turner says he and his caucus have been trying to convince the state to move to the federal exchange.   “It adds a lot of credence to our concerns over the last two years. You know the legislature, if the majority chose to, could direct the administration to do the research that the auditor is calling for to see what it would cost to shift to an alternative system such as the federal health exchange. But we’re not going to see that. This majority and the governor have been hand in hand on this project from day one.  I don’t believe you’re going to see the legislature here with the Democratic majority in charge is gonna do anything.”

Miller notes that he and Governor Shumlin last month announced contingency plans to move to the federal exchange if key problems with Vermont Health Connect aren't fixed by the end of the year.   “Any other path would likely cost more to pursue. We also are waiting for the Supreme Court ruling in King vs. Burwell which is expected in June to determine the legality of states using the federal marketplace as their state’s solution and for their citizens continuing to have access to federal tax credits.”

Vermont State Auditor Doug Hoffer and Chief of Health Care Reform Lawrence Miller are scheduled to appear before the House Committee on Health Care Reform Tuesday to discuss the audit report.

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