MONTPELIER — A U.S. Supreme Court ruling handed down Thursday ensures that some Vermonters will continue to be eligible for federal subsidies through Obamacare if the state opts to abandon Vermont Health Connect later this year.
The court upheld a major challenge to the Affordable Care Act in a 6-3 ruling Thursday, ensuring that nearly 9 million people receiving federal subsidies under the law can continue to receive them regardless of where they live. The challenge to the law contended that the subsidies were only available to states that created their own exchanges, like Vermont.
The challenge could have had major consequences in Vermont had the court ruled the other way. The state’s exchange, Vermont Health Connect, continues to face technology challenges. Some major functions that were supposed to be part of the state’s online health insurance marketplace continue to struggle.
Democratic Gov. Peter Shumlin has said the state would look to transition to the federal exchange if those functions were not working properly this fall. Vermonters will continue to receive federal subsidies in that event because of the court’s ruling Thursday.
Shumlin issued a statement Thursday after the ruling was announced saying the administration is continuing to work on Vermont Health Connect to ensure it works properly for Vermonters.
“We are making progress to deliver the services Vermonters expect through Vermont Health Connect. We have insured nearly 20,000 Vermonters who previously did not have insurance, and now Vermont has the second lowest rate of uninsured in the nation,” he said.
The state completed an upgrade to the website earlier this month to incorporate the so-called change-of-circumstance function. When fully implemented, it will allow customers to make life change to their accounts online, including marriage, death, birth of a child or a change in jobs. Another function, automated policy renewals, should be up and running this fall.
Republican Lt. Gov. Phil Scott, who has said he is considering a run for governor, used the ruling Thursday to call for Vermont to abandon its own exchange. Scott has been a critic of Vermont Health Connect’s challenges.
“For 18 months, officials have dismissed repeated calls to explore alternatives to our dysfunctional exchange, saying to do so would put Vermonters at risk of losing their subsidies. Now, with today’s U.S. Supreme Court ruling that federal subsidies can be offered in both state and federal health care exchanges, that fear is eliminated, and it’s clear we must immediately explore alternatives to Vermont Health Connect,” Scott said.
Scott called for immediately looking into a regional partnership with nearby states, creating a state-federal hybrid system or simply shifting to the federal exchange.
“For far too long, Vermonters have been underserved and frustrated by this $200 million system. Now that the fear of losing subsidies is no longer a valid argument, we must find the best path to affordable, accessible health insurance for every Vermonter,” he said.
But Lawrence Miller, Shumlin’s chief of health care reform, said Thursday’s ruling does not change the administration’s thinking and officials will continue to work on VHC.
“I think we’ve been clear that going to the federal exchange would still have substantial costs and complications for Vermonters. We would still need to figure out a way to deliver Vermont premium assistance because that’s not a part of the federal exchange,” Miller said.
Vermont is just one of two states that offer state-level financial assistance for customers on the exchange.
Miller said the state would still need to improve VHC even if the state moved to the federal exchange because it administers the state’s Medicaid program, including eligibility and enrollment. And, Miler said, insurance carriers in Vermont would have to devise a new integration model with the federal system.
“It would add substantial cost and complication. That is why we will still remain focused on the work at Vermont Health Connect and getting the level of service to what Vermonters expect,” he said.
Miller said he is glad the uncertainty brought about by the challenge has been settled.
“I’m very pleased with the decision. I think it’s the right decision,” Miller said. “The surprise really was when they took it, in my mind, and that raised a significant amount of uncertainty. If two more justices had seen it the way [Justice Antonin] Scalia (who wrote the dissenting opinion) did a lot of Americans would be having a very bad day.”