by vtdigger.org On October 1, the state is slated to open the doors to Vermont Health Connect, Vermont’s new health insurance marketplace. Three months later, on January 1, 2014, the web-based exchange will become the sole insurance marketplace for an estimated 118,000 Vermonters, who purchase individual plans or work for businesses with 50 or fewer employees. At that time, the state subsidized health insurance programs Catamount and VHAP will end, and the low-income working Vermonters who use these programs would see major cost hikes without new subsidies.
The Legislature this session appropriated $4.35 million in fiscal year 2014 for premium assistance and cost-sharing subsidies to aid Vermonters earning between 133 percent and 300 percent of the federal poverty line. For individuals, that’s an annual income between $15,282 and $34,470.
Since the exchange takes effect halfway through the fiscal year, the $4.35 million is set to double in FY 2015, when the exchange is in effect for the entire fiscal year.
Of that $4.35 million, $1.484 million will go to reducing annual out-of-pocket maximums, which is the yearly limit that someone is liable for paying in treatment costs. Even with these new subsidies, many Vermonters are facing annual limits more than twice what they currently pay Individuals earning between $28,725 and $34,470, who are enrolled in Catamount, would face annual limits that are roughly four times more than what they are currently responsible for.
The administration proposed a higher cost-sharing subsidy at the outset of the session, but the federal government was unwilling to offer matching funds.
The other $2.866 million the Legislature voted to spend on these subsidies will reduce premiums for this population. The feds are willing to pay an additional $3.5 million, which would bring the total premium subsidy to $6.4 million. That’s a 45-55 percent state-federal split.
These combined subsidies are in addition to federal subsidies under the Affordable Care Act that use a scale to cap premiums at a percentage of a person’s annual income. While the state subsidies (with the federal match) only cover up to 300 percent of the poverty line, the Affordable Care Act subsidizes income earners up to 400 percent of the poverty line.
Many Vermonters earning between 133 percent and 400 percent will see their premiums payments decrease in 2014. But single parents, who were enrolled in Catamount and VHAP, are facing the steepest premium increases in the state (link:
Exchange Funding
A major money issue this legislative session was how to finance the operation and maintenance of the exchange’s infrastructure. The administration and a legislative consultant agreed that running the exchange would cost the state $18.4 million annually.
To meet federal standards, the Legislature needed to provide a sustainable financing mechanism to pay for the operational costs of the state-based insurance exchange. The Legislature decided to continue an assessment on employers that don’t pay for their employees’health insurance.
The issue many business groups have taken with continuing the employer assessment is that the administration has encouraged small businesses to drop their coverage, yet they are continuing to be taxed extra for doing so. Currently, employers are assessed roughly $120 annually for each employee they don’t cover.
In fiscal year 2015, the Joint Fiscal Office estimates that the employer assessment will raise $14.4 million. In FY 2016, the office estimates that amount will go up to $15.9 million.
Since legislative leaders are planning to transition to a publicly financed health care system in 2017, they estimate this financing plan will fund the exchange until then.
EDUCATION FUNDING
The Legislature increased the property tax rate by five cents this year to keep pace with a 5.4 percent increase in education spending. Lawmakers bemoaned the move, but had little choice other than to sign off on the bill.
In response to the rise in spending, which is forecast to continue, and the tandem rise in tax rates, the Legislature passed H.538.
Rep. Dave Sharpe, D-Bristol, spearheaded the push to pass the bill.
Asked why the legislation, which was pushed through the Senate at a frenetic pace, was such a priority, Sharpe responded, ‘We felt an obligation to do something with regard to suppressing spending â ¦ to go home without doing something is not acceptable to me and I think to many others in this building.’
The only provision in H.538 that is expected to have a concrete impact on school spending is a change to the excess spending threshold. Currently, school districts pay a penalty when their per-pupil spending hits 125 percent of the state average. The bill lowers the threshold for that penalty to 123 percent in Fiscal Year 2015, and to 121 percent in FY 2017.
H.538 also calls for a study on the renter rebate, which is given to tenants to offset a portion of their rent that is assumed to go towards paying the property tax. The study will look at ‘issues’with the program and explore ‘other ways to provide assistance to renters with high rents and low incomes.’Originally the bill reduced the renter rebate.
The bill also requests data from the secretary of education about acceptable student-to-staff ratios. H.538’s backers hope this will get the ball rolling for the state to establish minimum ratios, which will then allow them to dole out penalties for schools whose ratios fall below the minimum.
‘We don’t have enough information to put actual numbers in the bill,’Sharpe said. He explained that lawmakers are more concerned about staff ratios than they are about teacher ratios.
The bill also makes a technical change to the billing procedure for schools that receive students from other districts.
WELFARE REFORM
Lawmakers had immediate reservations when Gov. Peter Shumlin first unveiled his ‘welfare reform’scheme in January. But they gradually warmed to the proposal, and four months later they followed suit, putting a five-year cap on welfare benefits for families.
The Legislature took a softer approach than Shumlin pushed for; lawmakers decided to delay or waive the cap for families in certain situations.
Reach Up is the state’s family welfare program. Currently families can receive cash assistance for an unlimited period of time.
Starting in May 2014, families will lose their benefits if they’ve been on Reach Up for five years. Any time they spend on welfare in other states will count toward the limit. But families can extend their cash grant beyond five years through a ‘hardship exemption’by either doing community service or securing employment.
Families can also subtract from the five-year limit any period of time in which they are unable to work, are caring for a very young child, have experienced domestic violence or are caring full-time for an ill or disabled person. The clock doesn’t start ticking until the recipient turns 18. Child-only grants ‘which are given to people taking a care of child that isn’t their own ‘are also exempt from the limit.
The reform measure also sets up a working group to assess the Reach Up program, focusing on the sanction policy for families that don’t comply with the program and the caseload ratios. The Legislature’s plan mandates that case managers conduct a review of families at the 18-month and 36-month marks, and it rejects the administration’s proposal to implement a harsher sanction policy.
David Yacovone is the Commissioner of the Department of Children and Families, which administers the Reach Up program. Yacovone, who spent a substantial amount of time peddling Shumlin’s plan to legislative committees, said the plan they settled on is a ‘good beginning.’
Yacovone said he doesn’t think the string of exemptions and deferments will undo the efficacy of the cap. The goal, according to Yacovone, was to enact time limits in a way that distinguishes the ‘unwilling’from the ‘unable.’The exemptions the Senate put in place for families that are working or doing community service ‘say there has to be reciprocity. We’ll help you if you help yourself,’Yacovone said.
Reach Up Case Managers at the Department of Labor
DCF made a late-in-the-session request to redirect $600,000 of a $1.2 million grant, laying off about six Reach Up case managers employed through the Department of Labor and using the funds to hire substance abuse and mental health counselors to serve the Reach Up population. Currently the Reach Up program doesn’t employ counselors.
In the 2014 budget, the Legislature authorizes DCF to redirect $300,000 of the grant and leaves open the possibility that the department can seek to redirect the rest through the budget adjustment act process. DCF has already made it clear that it plans to use the entire grant ‘which covers 14 positions ‘to cover the cost of substance abuse and mental health counseling over the course of two years.
Some lawmakers have said they are doubtful that hiring substance abuse and mental health counselors will make much of a difference for Reach Up recipients, given that there are long waiting lists across the state to receive treatment for these conditions.
DCF Commissioner Yacovone said he doesn’t need the Vermont Department of Labor employees, who are charged with helping Reach Up recipients find employment.
‘I think it’s a good move in the right direction. I was very, very pleased with the additional resources to help with substance abuse. It’s still enough to begin to make a difference for those who are fighting with those addictions,’Yacovone said.
OPIATE ABUSE
Gov. Peter Shumlin and the Democratic leaders in the Legislature touted an omnibus drug abuse bill as one of the most important pieces of legislation passed this year. H.522 addresses problems stemming from opioid and methamphetamine abuse from several different angles.
● The bill’s centerpiece is an effort to revitalize the Vermont Prescription Monitoring System, the statewide online database that allows physicians and pharmacists to track prescriptions, alerting them to signs of doctor-shopping. Participation, which is voluntary, has been lackluster.
Only 36 percent of doctors who are licensed to prescribe controlled substances are registered to use the VPMS and among these 1,881 doctors, there isn’t data on how many actively use the database. Some 163 of 400 in-state pharmacists are registered.
H. 522 requires doctors to register with the VPMS by Nov. 15, 2013, and it sets minimum standards for when they must consult the database. It also paves the way for the Department of Health to share information with databases in neighboring states as long as adhere to certain privacy and security standards.
● The bill sets up a pilot program to distribute drugs that can reverse opioid overdoses to people who are at risk of an overdose, as well as their family and friends. Currently in Vermont, only physicians and paramedics can administer these ‘opioid antagonists.’
● It requires people to show a valid ID before buying allergy medicines, such as Sudafed, which contain active ingredients that can be used to make methamphetamine. It also requires pharmacies to use a free electronic database to record all sales of these products. The provision sunsets after three years, in response to privacy concerns raised by the Vermont ACLU.
● It tasks the Department of Health with implementing a statewide drug disposal program by July 2014, allowing people to discard unused prescriptions at no cost.
● It makes it easier to designate a place as ‘abandoned property,’which lawmakers hope will, in turn, make it easier for law enforcement to crack down on drug activity.
● The bill calls for several studies. One will examine the effect methamphetamine production can have on housing. Another will look at how to regulate precious metal dealers to crack down on the sale of stolen property used to fuel drug addictions. The bill also makes slight changes to the recordkeeping requirements for pawnbrokers.
● H.65 is a separate piece of legislation that gives limited immunity from a narrow set of offenses ‘parole violation or procuring alcohol for someone under 21, for example’for people who seek medical attention for some who has overdosed. The hope is that this will encourage more reporting of these events.
EMERGENCY HOUSING
The 2014 budget caps the amount that the Department for Children and Families (DCF) can spend on putting homeless people up in motels during emergency situations at $1.5 million. At the outset of budget deliberations, the department had suggested putting a cap of $2 million in place. Shaving off another half-million dollars might be hard, DCF Commissioner Dave Yacovone said.
DCF relies on motels when shelters are full, but the amount of money they are spending on this stopgap approach has ballooned recently, raising questions within the department and outside of it about how to stem the trend. DCF will have spent approximately $3.4 million on emergency housing by the end of FY 2013, according to Yacovone.
The Legislature also lays out a temporary definition of who can qualify for emergency housing, leaving it up to the department to develop permanent guidelines. Anyone can qualify during a ‘catastrophic situation’or during very cold weather. Otherwise, people have to meet the definition of ‘vulnerable.’The maximum stay at a motel is limited to 28 days.
The budget defines ‘vulnerable’as someone who is either 65 years of age or older; receiving disability benefits; a child under 6 years of age; or a woman in the third trimester of pregnancy.
Yacovone said it will be important for the department to develop more flexible eligibility guidelines to replace the ‘drawing a line in the sand’approach. He used the example of a 64-year-old person who has diabetes as somebody who should qualify for emergency housing but would not meet the standards laid out by the Legislature.
CHILD CARE
Nothing fell flatter this session than Gov. Peter Shumlin’s proposal to decrease the state’s Earned Income Tax Credit (EITC) to fund an expansion in the state’s child care program.
Shumlin asked the Legislature to support his plan to divert $16.7 million from the EITC to do three things:
â ¢ Update the federal poverty level (FPL) from 2010 to the 2013 level, which would make more families eligible to receive a child-care subsidy;
â ¢ Reconstruct the subsidy ‘cliff,’to give a larger subsidy to families at the higher end of the eligible income bracket;
â ¢ Increase the market rate by 40 percent for child-care providers.
The Legislature chose not to touch the state portion of the Earned Income Tax Credit, which supplements the federal credit and is considered a highly effective anti-poverty mechanism for working Vermonters.
Having eliminated the funding source, the Legislature left almost all of Shumlin’s child-care expansion plans on the table.
The 2014 budget allocates just $1.6 million to fund the governor’s initiative. That money will be used to update eligibility guidelines to the 2013 FPL and to increase provider rates by 3 percent, starting in November 2013.
Lawmakers say the 3 percent raise is consistent with what’s been allocated for other providers in the Agency of Human Services portion of the budget.
SCHOOL LUNCH
The Legislature passed a bill to make school lunch free for all low-income students and carved out $322,250 in the 2014 budget to pay for it.
Gov. Peter Shumlin identified this as a priority during his inaugural address in January: ‘While some low-income Vermont kids are eligible for free school lunch under federal guidelines, others have family incomes just high enough that they are forced to pony up cash they don’t have to eat lunch. We must fix this problem for the thousands of low-income Vermont students who can’t afford to pay for lunch.’
The free lunch program is available to families with incomes between 130 percent and 185 percent of the federal poverty line. Families below that threshold already qualify for free lunch, paid for through federal funds.
In the 2011-2012 school year, 3,539 students ‘roughly 60 percent of those eligible in Vermont ‘received reduced-price lunches. School food service directors told lawmakers that many students don’t participate either because they don’t have the 40 cents or because they feel stigmatized.
Laurie Colgan, director of child nutrition programs for the Agency of Education, has said she expects the legislation will increase participation by 25 percent. That projection is based on the rise in school breakfast participation after Vermont passed a law in 2008 making breakfast free for reduced-price students.