MONTPELIER — Gov. Peter Shumlin had not even decided to run for the state’s top office when the federal Affordable Care Act was signed into law in March 2010, but the landmark legislation would soon begin to shape his governorship in ways he could not have imagined.
Shumlin, who was sworn into office in January 2011, began his tenure as the state’s chief executive with a trademark swagger. Now as he approaches the end, having announced in June that he will not seek a fourth term, he is hoping to leave in place a working exchange that he has championed, but which has struggled for two years and one month to meet Vermonters’ expectations.
The governor held a news conference Thursday to announce that the site should finally work today, Nov. 1, as the open enrollment period for 2016 health care plans begins. He remains “cautiously optimistic,” he said, a phrase he has likely uttered hundreds of times in the past year when asked about the exchange’s progress.
If the site works today, Vermonters will finally have the product they were promised, albeit with more sweat, tears and frustration than anyone anticipated, including the Vermonters it is intended to serve. If it doesn’t, the travails of the past two-plus years will continue.
‘Everything is fine’
Shumlin and his team were confident in the weeks leading up to Vermont Health Connect’s launch on Oct. 1, 2013. Although some “bells and whistles” would not be ready for prime time, the site would generally work and provide Vermonters with the means to obtain affordable health care coverage, the governor maintained.
The state’s original contractor, CGI, continued to project confidence in the technology until just before the launch, according to Shumlin. In fact, it was on the return trip home from a trip to China, with just days to go before the launch, when CGI delivered bad news, Shumlin said in an interview with the Vermont Press Bureau.
“I had been told that we were going to be driving a Chevy Chevette and that the bells and whistles would be added in the following year, but the Chevy Chevette would get you where you needed to go,” Shumlin, sitting around a conference table with his top staffers, said. “When I landed back in Seattle that day to change planes they were having a discussion on whether we would go forward or not.”
Lawrence Miller, Shumlin’s chief of health care reform, was secretary of commerce at the time. He recalled receiving assurances prior to the China trip that the exchange was on track. The governor, he was told, was free to pitch Vermont to overseas companies as a good place to do business.
“I had talked to (Mark Larson, former commissioner of Vermont Health Access) before we went just to be certain that we should be taking him to China,” Miller said. “It was like, ‘Do we need to cancel that? No, everything is fine,’” Miller said.
Everything is not fine
But in the days after the exchange’s launch, bugs emerged. The site was slow and clunky. Even larger issues would soon emerge. Vermonters and the media began to grasp the significance of the functions that would not be available.
Shumlin and his staff also began to understand the challenges that were ahead.
“The first several months were hell on wheels for all of us because we had more and more Vermonters who were backed up, unable to get the plans they wanted, unable to get a proper bill, unable to know whether they had health insurance coverage or not,” Shumlin said. “Just like the federal government was facing, just like other states were facing. It was not a happy time.”
Shumlin said President Barack Obama and other states that had built their own exchanges like Vermont were experiencing similar issues.
“I think it’s worth mentioning that we were as surprised as every other governor in America at about the same time and the president of the United States,” Shumlin said. “When CGI told the president of the United States that their website was not going to work, that’s about the same time that CGI told the governor of Vermont that his website was not going to work, and it was right before the launch. We all got the same treatment. Everything was beautiful until it wasn’t.”
The administration and the insurance carriers offering plans on the exchange — Blue Cross Blue Shield of Vermont, MVP Health Care and Delta Dental — began work on contingency plans to allow Vermonters to enroll in plans. That process, although cumbersome and not automated as expected, seemed to work.
“Pretty quickly we were able to get to a point where there was smooth enrollment process,” said Cassandra Gekas, the exchange’s operations manager.
Don George, president and CEO of Blue Cross Blue Shield, said his company was concerned about the site’s readiness.
“It’s always a bit opaque about just where the state is and what we should expect. They own and are operating the work plan,” he told the Vermont Press Bureau. “We were very concerned about the state’s readiness to go live.”
With the benefit of hindsight, George said he does not believe the administration misled his company or the public.
“I think that the state really felt, given where they were at, that this was going to work,” he said. “I don’t feel like we were in the dark. I think they were representing to us the status as they believed it was.”
The company, acting on its initial concerns, prepared contingency plans ahead of the launch. Their preparation proved to be fortuitous. BCBS employees were able to work with customers and get them coverage.
“They could have been in a circumstance in which their heads were exploding. They were very patient,” he said.
Trinka Kerr, chief health care advocate at the Office of the Health Care Advocate, a division of Vermont Legal Aid, saw a different side. She said the exchange’s struggles have had a major impact on many Vermonters.
“We heard about a lot of different problems that people have had over the last couple of years. Problems that lasted for months and sorted of snowballed into other problems,” she said. “It’s been hell for a lot of people. It really has. Really, really frustrating. That’s not a secret.”
There were many customers who had paid their premiums but did not have active coverage. Many of them delayed seeking health care treatment because they feared they would be on the hook for the costs, Kerr said.
“Vermont Health Connect worked pretty hard to handle those cases as fast as they could, but they happened,” she said. “A lot of them had tried to resolve the problems by themselves for months and were really frustrated and really angry. And if they had health care needs that compounded it.”
Kerr added, “There have been plenty of angry people and you can’t really blame them when they’ve been making calls for months and not getting anywhere.”
The governor insists he was not insulated from the frustration Vermonters were feeling. In fact, he said, he spoke to many of them personally as they struggled with the system.
“Who do you think they called? I talked to plenty of people who were pissed off that they called Vermont Health Connect, that they called my 800 number, and they hadn’t gotten results,” Shumlin said.
“I was talking to them. Everyone on the fifth floor was talking to them. We were all talking to them. There were over 10,000 of them,” he said.
Miller said, “I’d get referrals by text from people complaining in the grocery store to (the governor).”
Shumlin added, “And I’m like, ‘Lawrence, here’s another one. I just talked to them.’”
Backlog of 10,000
Looking back, Shumlin said the state should have lowered its own expectations and those of the Legislature and the public.
“The biggest mistake we made was not narrowing the scope of the work to what absolutely had to happen to make it function on that date,” Shumlin said.
George, despite the hardship on Blue Cross, said he is not interested in pointing fingers at the governor or anybody else.
“I’m not asking or looking for him to take any more responsibility than he already has,” he said. “They’ve continued with Optum and the people there to work long and hard. The governor’s continued to hold people accountable to get it done. So, Blue Cross is not looking for anything further from the administration.”
Despite the extensive efforts by BCBS and other insurers, plenty of Vermonters remained in the lurch, especially those who needed to change personal information related to their accounts. The exchange was supposed to allow costumers to make online changes to their accounts, such as a marriage, the birth of a child or a change in jobs. But that function was not ready, and CGI could not figure it out quickly.
The result was a backlog of requested changes that had to be done through a manual, paper process. The staff of VHC could not keep up with them and at one point the pending requests numbered more than 10,000.
Billing errors began to occur because changes were not reflected on customers’ accounts. The problems for the Shumlin administration began to compound.
“The lowest point of morale was when we had change-of-circumstances stacking up,” the governor said. “We had to be hiring extra people to come and do manual work that we knew was going to take forever, and our technology contractors were clear that there was no quick fix to our challenges. That went on for six, seven months.”
The Blues blues
The lacking function also created problems for BCBS, said George. Bill discrepancies began to surface. For 2014 health plans, the company is owed $1.6 million for premiums that have not been paid and for claims it paid on insurance plans that had been terminated. The lacking technology did not provide a smooth flow of information to let the insurer know when plans were not active. The company expects to be owed additional money for 2015 health plans.
The company also incurred additional costs in the “millions of dollars” to accommodate the contingencies and manual workarounds required to provide insurance to Vermonters on the exchange.
George said the company is not asking the state to cover those costs, and the company has managed to absorb them without passing it on in premiums.
“We went through it with the lights burning in the building 24-7 and with the employees working extremely hard, but they bought in really early on to a mission commitment to always put the customers first,” George said.
“The conclusion that we came to as a group … was that a lot of our customers are about to have a really bad experience unless you’re willing to step up and do something extraordinary in terms of the contingencies,” he said. “Everybody in the company went forward with that commitment.”
He conceded that the last two years have been an “intense” time for the company. But George said he and his employees worked hard to not “lose our cool.”
“I have frustrating thoughts and moments, but if you demonstrate them to your employees or your partners it doesn’t help. It doesn’t go toward a productive end,” he said.
“As difficult as the sledding becomes, you have to continue to think in terms of the solutions,” he said. “If I have a concern it’s just this great culture that I’m a beneficiary of here and these hardworking people, that the fabric of that will begin to come unraveled.”
Was it junk?
In the weeks and following the exchange’s launch, Shumlin had a few immediate concerns. “How do we tread water long enough to figure out how no Vermonter loses health care coverage?” he said.
Next in line was assessing how to begin moving forward. Shumlin said he initially had one main question that required an immediate answer.
“Is what CGI built such junk that we need to scrap it and start again, or did they do enough good work so that there’s a framework with which another contractor can come in and work on?” he said.
Doubts about CGI within the administration were rampant. So Shumlin’s staff showed CGI’s work to other contractors, including Optum, “quietly while we were still working with CGI,” he said. CGI would eventually be fired and replaced by Optum.
“The direct conclusion was very clearly CGI did some good work here,” Shumlin said. “What they were asked to do in the timeline that was laid out was no easier for CGI than it was for Oracle and the other large contractors that do this kind of work. And while they certainly gave us plenty of challenges, the basic body of the Chevy Chevette was not only savable but there was quality in that work. That was the good news for Vermont.”
The governor said he leaned hard on CGI in the months after its launch to address the core issues with the site.
“I had many, many conversations with the CEO of CGI, so many that in the process of those conversations I asked everything, I said everything, and it wasn’t always my most diplomatic moment,” he said.
No A team for Vt.
The technology firm had fires to put out around the country, however. The federal site, also built by CGI, was in disarray and needed to be fixed. Shumlin said Vermont’s project suffered as CGI’s talent was focused elsewhere.
“My sense of what happened was this: behind the scenes, and I’ve never said this to the press, the president of the United States and I had the same contractor and the same problem. I think the president got the A team,” Shumlin said. “We clearly didn’t have the A team coming in to fix our website.”
Miller left his position as commerce secretary and shifted to a new role overseeing Vermont Health Connect in early 2014. His first duties were to assess the assets in place and determine how to move forward.
“A lot of it at first was just walking around and saying, ‘Hey, you’ve got to go on vacation. You’re out of here for a week. Nobody is working seven days a week anymore. You have to take at least one day off,’” he said.
Miller’s arrival on scene began a host of changes, most notably the end of the state’s relationship with CGI. Optum, which had “bailed out the president,” according to Shumlin, was hired to finish the job.
“Optum has been a dream. They have actually delivered on the promises they have made,” he said. “CGI did not deliver on the promises that they made. That’s why we’re no longer working with them.”
Shumlin said he has been heavily involved with the project all along, joining meetings or conference calls each morning about VHC’s progress. He said he continues to urge the state’s partners to work faster.
“I get on the phone and pound on — or I work collaboratively with our contractors, with the CEO of Optum, with all the teams,” he said, correcting himself mid-sentence.
Line in the sand
Still, even after Optum was hired, calls to abandon Vermont Health Connect began to grow louder. First it was largely from Republicans and opponents of the state-run exchange. But, by the beginning of 2015, even some Democrats began losing patience.
House Speaker Shap Smith, now also a candidate for governor, began to harden his stance and said the state should begin a transition to the federal site if specific benchmarks Shumlin laid out in March were not met.
Shumlin, in laying out those benchmarks that called for adding the automated change-of-circumstance and reducing the change backlog, essentially drew a line in the sand. Should the state not meet them, he would begin the transition. But the governor maintained that a switch to the federal site would be bad news for Vermonters because they would lose state-level subsidies, making their insurance more expensive.
“We could not go to the federal exchange without literally screwing a lot of low-income Vermonters,” Shumlin said. “When folks were losing confidence because of the political pressure it was my job to say, ‘Listen, there are times when you have to do the right thing despite the politics,’ and I’m glad that we did.”
George said he does not believe that leaders should be faulted “for taking bold steps.” BCBS still prefers that Vermont operate a functioning exchange of its own. Switching to the federal site “would cost us a sizable amount to go through that project again,” he said.
“I think, ultimately, having a Vermont exchange is best for Vermonters if we can make it work,” George said. “There are 37 states that now are with the federal exchange. There are 13 with a state exchange. I think health care is local, and ultimately, a state exchange is local and it’s better.”
As VHC staff shifted into overdrive to ensure that Vermonters were receiving their health care benefits, the administration and managers were concerned about the toll that the exchange’s problems — and its portrayal in the press — were taking on them.
“They read the press and they were up there just trying to get people insurance … and everyone is saying that we, and they, are scoundrels. They were just trying to do the right thing,” Shumlin said. “I wasn’t concerned about the political problem.”
Health Commissioner Harry Chen, for a time, served as the interim secretary of the Agency of Human Services. Doug Racine, who was secretary when the exchange launched, was fired in August 2014. Chen said the VHC staff impressed him with their determination to deliver results for Vermonters.
“I have never seen a group of people who keep coming back the next day when most people in their right minds wouldn’t come back that next day,” Chen said. “They’re coming back knowing how long it’s going to take, how big that pile is, but they kept coming back. It’s astounding to me. Now, things are obviously a lot different.”
Despite two years of struggle, Shumlin said the state has managed to reduce its uninsured rate to 3.7 percent — tied for lowest in the country with Massachusetts.
More Vermonters have access to health insurance than ever before, even if it took longer than expected to complete the project, he said.
“No question that this has been the biggest, most difficult challenge to deliver on,” he said. “These are real people, with real lives, who work their tails off — sometimes with two, three jobs — and they finally have health insurance.”