 Welcome everyone to the Green Mountain Care Board. The first item on the agenda is the Executive Director's Report. Mr. Chair, a couple of brief announcements. First, next Wednesday's meeting is canceled. We will not have a Green Mountain Care Board meeting on the third. We have posted our meeting schedule for October. I've reviewed it in the past. We have a busy month ahead. We'll be having an advisory committee meeting here on the 10th, and then in addition to our regular board meetings, we'll be going down to the upper valley for a traveling board meeting at the end of the month. And I would ask folks to please sign in at the front desk if you haven't already. And that's all I have to report. Christina, do we have any board members on the phone? This is Robin. Thank you, Robin. I just wanted to make sure before we made any motions, because it'll have to be by roll. So the next item on the agenda are the minutes of Wednesday, September 19th. Is there a motion? Second. It's been moved and seconded to approve the minutes of Wednesday, September 19th. Without any additions, deletions, or corrections. Is there any discussion? Hearing none, Judy, will you call the roll? Sure. Member Holm? Yes. Pelham? Yes. Lunge? Chair. Chair? Yes. So the next item on the agenda is the health resource allocation plan. And Marisa, if you could join us. Hi. Good afternoon. I'm Marisa Melamed, health policy advisor with the Green Mountain Care Board. And I'm going to give you an update this afternoon on the board's work on updating the health resource allocation plan, which is commonly and lovingly referred to as the HRAP. Just a quick agenda run through. I'll give you a review of the new statute that passed this spring. Go over a high level timeline for how we expect the project to progress. And then items three, four, and five are a little bit of a look at some of the work that we've done so far. And we'll finish up reviewing the stakeholder and public input process. So just for some quick history. In 2003, the legislation was passed that created the health resource allocation plan. The plan was first published in 2005 and was updated in 2009. Last year, the Green Mountain Care Board convened a stakeholder group to reimagine the HRAP and develop a proposal to update the underlying statute to better align with the vision that came out of that group. Just as a reminder, Kate O'Neill and I at the board presented those recommendations to the board back in November. And the bill worked its way through the legislative process and passed in May. The old HRAP. One of the key members of the legislature here that's been involved with the HRAP legislation representative, Donna Huso, just want to welcome her as well. Wonderful. So part of the underlying reason for doing this update is that the old HRAP described a static inventory of a specified set of health care resources with a focus on supply. We heard that it was not a driver of solutions, was not being used as well as it could be, and it did not measure gaps or the underlying need. So we worked on a vision for a new HRAP to replace the static inventory. And the narrative report, which people are familiar with that looks like this, that was published in 2009. We envision that the new HRAP will utilize existing data sources to be more dynamic and up to date, and that it will not look like a static publish report like this, but be something that's published online and more interactive and easier to use. The new HRAP language is found in Act 167 of 2018 in act relating to the health care regulatory duties of the Green Mountain Care Board. And the new language, just to summarize, is more general resource allocation language that allows more flexibility to create a tool that improves its relevancy and to help Green Mountain Care Board members with analysis and decision making around CON hospital budgets, ACO budgets and certification, as well as to be a resource for other state and community decision makers on health policy and planning. And on the slide, I have printed here the language, excuse me, from the statute that the Green Mountain Care Board shall publish on its website. The HRAP, which will identify Vermont's critical health needs, good services and resources, the plan shall identify Vermont residents' needs for health care services programs and facilities, the resources available, and the additional resources that would be required to realistically meet those needs and to make access to those services, programs, and facilities affordable for consumers and the priorities for addressing those needs on a statewide basis. The Board may also expand the plan to include the resources, needs, and priorities related to the social determinants of health, and the plan shall be revised periodically, but not less frequently than once every four years. The new HRAP is required to do the following things. Again, this is straight from the legislation. To identify Vermont's critical health needs, good services and resources, to consider the principles in 18VSA 9371, the principles for health care reform, and to identify priorities using existing data sources and reports, such as the health state health improvement plan, community health needs assessments, health care workforce information that is available, as well as materials provided to the Board through its regulatory processes, as well as a public input process. We're also required to identify utilization trends to determine areas of underutilization and overutilization, and to consider the cost impacts of fulfilling any gaps between the supply of health resources and the health needs of Vermont residents. Then the statute defines health resources as investments in the state's health care system, including investments in personnel, equipment, and infrastructure necessary to deliver hospital, nursing home, and other inpatient services, ambulatory care, including primary care services, mental health services, health screening, and early intervention services, and services for the prevention and treatment of substance use disorders, also home health services and emergency care, including ambulance services. And again, we may expand the definition of resources to include investments in personnel, equipment, and infrastructure necessary to address the social determinants of health. So for a timeline, we're kicked off on the project just recently between August and September, so we are still in an early initiation and planning phases, which includes reforming an internal Green Mountain Care Board project team, developing the project plan, and planning for interagency and stakeholder engagement. An immediate need that we have is to fill an open data analyst position on our data analytics team. This position is a director of data management analysis and integrity, and the position will allow us to manage, analyze, and visualize the data in-house. And I'll put a plug in here that that position does close tomorrow on the VTHR website, so if you know of any data analysts, data geeks out there that want to join this exciting, innovative project, they should apply immediately this afternoon. We, in looking at the requirements, we've anticipated that the project will take approximately 18 months with the goal of releasing the final project in January, or the final product in January of 2020, so I've been calling it eTrap 2020. And I have up here just the high level timeline showing right now we're in this initiation and planning phase, we're doing background research, landscape review, looking at available resource and needs data, what data do we need, where is the data. We'll move into a data collection in the winter where we would like to begin collecting data from agencies, hospitals, health facilities, and looking at how to create templates or prototypes for what it might look like when we present the data and analysis. In the spring of 2019, we'll continue with data collection and analysis, including a gap analysis and prototypes for what the product might look like. Continuing that into the summer and fall of 2019, the gap analysis and cost estimates, then finally with the January of 2020 release goal where the final product would be posted to our website. Just to give you a little glimpse of what we've done so far. We did a visioning the future exercise last year with stakeholders in 2017 in preparing for the legislative proposal. Again, this is all still in that planning phase, so these are open to change and revision, but we've been working toward a project charter to work off of. And the current working vision is that ATRAP 2020 will deliver an up-to-date, sustainable, and dynamic resource that enables more informed health resource allocation decision making across the state using state and national data. The ATRAP will identify gaps in excess in healthcare services, availability and accessibility, and consider the underlying health needs across communities in Vermont. With this, there are four objectives that we have been developing. The first is to create a resource to provide easily accessible data on health resources and needs and align data across healthcare sectors or health sectors. That the planning process is guided by Vermont's long-term strategic direction for health and healthcare, and that population health needs guide resource allocation planning, as well as community involvement in decision making is data informed and a necessary element in determining community needs. The deliverables are an inventory of health resources across sectors, a profile of health needs and priorities across communities, a gap analysis between resources and those needs and priorities, a report on utilization trends, including over and under utilization, and cost estimates of fulfilling the gaps. Again, this is sort of preliminary look of what we've been working on in terms of the first two bullets on the slides before of the inventory of health resources and the profile of health needs and priorities. Our initial planning has generated this list of 12 sectors to include in the resource inventory. The sectors are either required in the new HRAP statute or were included based on identified state health priorities. Again, this is a draft. It will go through review, but we've included it today to illustrate some of our initial work. Under each sector, we will then identify the detailed data we intend to collect on facilities, services, programs, and equipment to give us a picture of what resources we have and where they're located. This list includes both services and settings and represents only initial work we've done in preparation for data collection. And as well as I'd wanna point out that the inventory information that we collect is an area that we would likely be looking to collect new data in addition to existing data that's out there. And that could come in the form of surveys to healthcare facilities, organizations, providers. The next side of that is the profile of health needs and priorities. Again, these will be identified through and informed by existing data sources and health needs assessments that the state is currently working on or is continuously working on, including community profiles. So far, we've identified the roughly 18 categories of health indicators listed here as those to include in the ATRAP. And again, this is a draft and will revise categories as needed as we collect input, but these should look fairly familiar. This is not exhaustive, but just to include this visual of the many health-related data sources that currently exist. Part of what we are doing is looking at these data sources as well as various data inventories that have been done by the Department of Health and the SIM project that help us better understand the data that's out there to help us answer the questions that we have about the needs and resources for Vermonters. And I touched on this a little bit already, but the purpose of the ATRAP is to inform the Board's regulatory processes, cost containment and statewide quality of care efforts, health care payment and delivery system reform initiatives and any allocation of health resources within the state. And so in addition to the Board's regulatory processes, we hope that this would be a larger plan that can be used more statewide for community health planning and public health policy. And finally, there'll be a stakeholder and public input process. As with anything that we do, we intend to coordinate the public process and conduct it through the Green Mountain Care Board public meetings. So today would be our first update and we anticipate that we would do this various stages along the way to update the public as well as utilize our Board Advisory Committee and the Primary Care Advisory Group, which are existing means of collecting input. And we're currently developing a more detailed stakeholder engagement plan to include other state agencies and departments, external organizations. We have a project that's beginning to collect qualitative data from providers as well as ongoing public input through general Board meetings or posted materials. And that concludes my prepared comments. I'm happy to answer any questions or take comment and people are welcome to reach out to me directly. So before I open it up to the Board, I just wanted to know if Jess had anything further to add. She's been kind of the person that's had the vision to see what the HRAP could be rather than what it has been. So I'd like to give you the opportunity to add anything. Well, thank you, Jeff. I guess I would just say that I'm extremely optimistic that this is gonna be a new document that will be helpful in our decision making. My hope is that it's helpful also for other state organizations and agencies in their resource allocation. I think that a lot of the needs data is already out there. This is a project that's gonna basically compile all of that data in one place. But marry it to inventory data that we haven't done in a while. So really looking at both of them side by side, both the demand side and the supply side and identifying gaps. And I'm extremely optimistic and I'm thankful for the team that we have on staff that's gonna do this. And I think it's a big project, but if we do it well, it's gonna be an incredible resource that I think potentially could be emulated by other states. So thank you. Okay, are there questions from Marissa from the Board? Tom. So thank you very much. This is a daunting task. I look at that list of data sources and think about how does one, two or three people, not to say 10 people get to know all those and integrate them. And so thank you for this. And thank you, Jess, for being the charge here. The only comment that I would have is that on the page HRAP 2020 vision, it says HRAP identifies gaps in excess in healthcare services. And elsewhere in this document where you talk about gaps, it's just gaps and not excesses. And I guess as a thematic kind of thing, I think in kind of looking at the system in its entirety, there are always gaps and there are always excesses. And possibly in the summer fall when you get to 2019, it's not only developing cost estimates for the gaps, but maybe the reallocation of resources within the overall system to fill some of those gaps. So that's the only emphasis I would have. This is a great job and a really tough task ahead, interesting task, but a tough task ahead and I wish you the best. Yeah and that I will just say the qualitative data that we're beginning to collect from providers I think is with the intention of to get at some of that utilization over and under because that's a tough, not to crack and understand. So we're looking to speak directly with providers about how they view that in their practices and settings. Okay, if there's no one else from the board, we'll open it up to the public for comment on the HRAP, Representative Donahue. As somebody who was involved in the vision in 2003, I am thrilled to see the 2020 vision as being totally aligned with the original vision and hopefully wanting to create what was originally intended rather than some of the other directions that it ended up, I think it's a really vital tool. And I heard in another second somewhere that I would be distressed by the timeline. I'm actually thrilled by the timeline. I think doing it right is what will make it valuable and it does take time to do something right. So I really crazed what was mean. It's all fess up and admit that it was me. Okay, other, yes, go ahead, Julie. Julie Tester for one of the partners. Thanks so much. I really appreciate the comments and this is this and I had a cover of some of Donahue's to thank also for his commitment to help us highlight it. In looking at the profile of health needs and priorities, does it categorize and sense demographic, socioeconomic and environmental factors? Racial and cultural diversity factors are also included in that? We're not at that level of detail. I think we're going to use a partner with the Department of Health and look at it the way that they are looking at it in some of their current plans, the state health assessment and the state health improvement plan. And that's a conversation that we're just beginning to have. So my intention would be to align it with how other agencies are using those indicators. I'll just add to that and say that where we're pulling from that is the understanding that there's definitely inequities across different socioeconomic variables and so to the extent that through the census data we can get, for example, racial differences and access and things like that. We are going to do that, so. And my understanding that those disparities are highlights of the, I see the Department of Health here, highlights of the ship and the Shah this year, so. Okay, Dale. So I had a tough time hearing you, Dale. Can you repeat that? I can add it to the list of things to look at but it had not come up in our initial conversations. That's the way the decision's going. As you probably know that the current thing that is currently is immunization. The next state health group substance use, there we go, yep, those are the five. So I just think that as this unfolds there's a really nice synergy in what you're looking at which we have in collecting and analyzing the data over time. So I think there's going to be a nice collaboration where we come up with the data that we have, a lot of which we will not be able to take by community where we can see inequities but we can see across the state. Our data size is just too small to be able to look at sort of sub-state work on ethnicity, disability, gender identity and poverty. We will be able to do sub-state. So just to get a sense of what we'll have to offer. And then first I just have one question for you. In one of the data places it seems to include mental health and in another place it's significant. So I'm just wondering what the extent to which mental health and substance use will be provided to see oral health is because often times oral health is not considered part of health but we see it as part of the whole body as part of health and not a separate piece as it would be requested in our state health group. Our preliminary work has identified both mental health and dental health and oral health. If you mean these, there's mental health and dental care on this and both. It does. But the top right that is. And actually can I just jump in here for a quick second because we are thinking about the state health assessment plan and had wonderful conversations with you already and the presentation that you made. One of the things that we've been thinking about is since the spring is going to be a prototyping phase we were going to take the categories that have been identified by the Department of Health as those key areas where we need to focus and prototype those. So in some sense we're trying to align right away. And I'd add to on your comment about the community level you are addressing the state health improvement plan and the assessment plan. We are also another required assessment that we need to look at the community health assessments put up at the hospital which there's also some VDH Green Mountain Care Board coordination work going on there. And at least initially to me I identify those as a community level way of looking at needs and in ways that we can use that process to get at community level look at disparities for example or other community specific needs hoping to use that process. Any other questions or comments from the public? Seeing none it's a great start. And as Tom said it's a daunting task that you have ahead of you, Marissa. With many others who are going to assist. Especially the person that we hire by tomorrow, right? Thank you. So at this point we'll invite Agatha. So we're switching gears and getting an update and an overview on the working group that was established in legislation on the individual mandate. And when Agatha gets forward she can introduce our special guest and thank him for traveling to Vermont today. I'm just going to quickly figure out how the pointer works. So hello. We are here this afternoon to give the board an update on Act 182 the individual mandate working groups report and provide an overview of their preliminary recommendations. And before I get started was there anything Kevin that you wanted to open up with or I can go ahead and jump in? So I think you can go ahead and jump in. Okay. I heard some stirring in the background. Robin did you want to say anything? Okay. We can. I think people know that Green Mountain Care Board is one of the working groups set up by legislation on the individual mandate and the mandate itself is tasked on the legislature. So the work that's been diligently meeting and trying to work through quite frankly a lot of very detailed information over the course of the summer and it seemed like it was an appropriate time to bring the rest of the board up to speed on that work. So that's why we are here today. So up with that I'll start with that. Merci beaucoup Robin. Thanks Robin. With me today is Jason Levitis. Jason is a health policy expert on the ACA and has been working with the group during the duration of its discussions. Jason led implementation of individual mandate and other ACA tax provisions at the Treasury Department. So thank you Jason for joining us today. He came up from Washington DC today. Several of the working group's recommendations are adjustments or modifications to federal policy. And so Jason is here to provide a background on that federal policy which will give more context to the working group's preliminary recommendations. On the screen here you will see our agenda for this afternoon which should take no more than an hour. We'll briefly go over Act 182 of 2018, the act that established the individual mandate and the working group. And we will go over the individual mandate, what it is, what we know about Vermont including information about the federal individual mandate penalty in Vermont, information about the uninsured population in Vermont and information about the impact of removing the federal penalty in Vermont. After that Jason will provide an overview of the federal individual mandate after which we will review the working group's preliminary recommendations which they plan to include in the report that they submit to the General Assembly on November 1st. I'd like to mention that there are some members of the working group in the audience here today. And Robin as you know is on the line and has offered to chime in if questions come up that are best suited for a member of the working group because as you know I was not a member of the working group. So please stop us along the way if you have any questions and with that we'll get started. So these next couple slides are just going to be some background on Act 182 in the working group. The Tax Cuts and Jobs Act of 2017 eliminated the federal penalty associated with the individual mandate. In response to this the Vermont General Assembly enacted Act 182 of 2018. This act established an individual mandate in Vermont. It also established the intent that the 2019 General Assembly should enact a financial penalty or other enforcement mechanism and the act established the individual mandate working group to come up with recommendations on minimum essential coverage, exemptions, enforcement and administration and those are the recommendations, preliminary recommendations you'll be hearing today. Act 182 requires the working group to submit a report to the General Assembly by November 1st. I love this pointer. And in order to meet that deadline the working group began their work at the beginning of the summer and they plan to release their draft report for public comment by this Friday. The board is hearing the working group's initial recommendations today this time on your October 17th board meeting to return to this topic after the public comment period. These next couple slides deal with the working group itself specifically and I don't plan to read them to you except to highlight that the members of the working group as required by Act 182 are listed there by department and as you know Robin is the Green Mountain Care Board appointee and also just to highlight the public comment process. The draft report is scheduled to be released on Friday and people can submit comments to the email address that's right up there on the bottom of the slide and also those phone numbers. And as always if anybody wants to send a public comment directly to the board they can do so by using the board's standard public comment process and those instructions are posted on the Green Mountain Care Board website. Next slide. And I'm not going to read this except to point out this section of principles and process. In prioritizing the working group's charge as set forth in Act 182 the group informally adopted principles to guide their work and maintain focus. And doing so the group agreed that the recommendations should focus on maintaining Vermont's low on insurance rate. The recommendations should strive to be practical in other words the recommendations should balance the complexity of health care policy and administrative burden with Vermont's best interest which is not always never an easy thing to do. And lastly the recommendations should include alternative options to present different perspectives and priorities. That brings us to the data slides. Are there any questions so far? So these next slides are going to demonstrate the scope of the federal individual mandate here in Vermont and we're working with 2016 IRS data which is the most current data available. So this chart shows in the upper portions in white income ranges broken down by FPL level these are the different FPL levels here and and these are the buckets on the IRS data chart. The the swells that are highlighted in orange here and here are the FPL levels that are eligible for Medicaid, Vermont premium assistance or federal premium tax credits to kind of give you a sense of who's paying the penalty and what are their income ranges. The lower portion of the data in green I'm sorry in blue here shows the number of returns federal returns in Vermont so there are 325,860 federal returns in Vermont and of those portion below 10,590 of them were subject to the individual mandate penalty about 3.2% of the returns. Now there's an important thing to note here and it's in the footnote is that this chart overstates the amount of the penalty that was actually paid. In this chart which comes directly from the IRS it appears as though the income ranges that qualify for Medicaid were assessed when in fact they were not and if they were it was a mistake so if they did qualify for the Medicaid the low income exemption and they paid they refunded that amount so this $7.3 million that it looks as though was collected in Vermont is actually an overstatement and Jason is there anything you'd like to add to that? No that's exactly right there was some confusion on the tax forms which led people to make erroneous payments in action both with respect to those who overpaid at the time and also to prevent those errors going forward. This next slide looks deceptively the same but it's different it's a comparison of 2015 to 2016 so as you can and it's only showing the change so as you can see there were in 2016 as compared to 2015 2,290 fewer returns that were subject to the individual mandate but that the amount of the penalty that was collected increased by 1.2 million during the same time period, the same 2 year time period the penalty increased from $325 per adult to $695 per adult So any questions on these IRS charts before we move on? This kind of is presenting the scope of the individual mandate in Vermont with the most recent data that we have So this next chart this next slide has to do with the uninsured population here in Vermont These two tables represent two different uninsured populations Table one represents the demographics of the people who are projected to drop coverage as a result of removing the federal individual mandate penalty In other words this is the maintenance population If you want to maintain Vermont's current uninsured rate you would want to maintain this population right here And this table likely looks very familiar to you as board members because it came directly from Lewis and Ellis's individual mandate report that they published earlier this year It's important to note here that Lewis analysis analysis is a projection and only takes financial determinants into consideration So it did not take financial considerations such as risk aversion or health status pending legislation like Act 182 that was passed or a person's sort of individual responsibility to be compliant with the law So it was purely a financial analysis Table two down below represents the demographics of the uninsured population in 2014 when the federal individual mandate was in effect The working group used the 2014 household health insurance survey for this data There's a 2018 data that's due out very soon although it has not been published The working group's understanding is that the 2018 results are expected to be roughly similar to the 2014 data so they felt comfortable using the 2014 data The 2018 data will have a slightly lower uninsured rate overall and a statistically lower rate for those incomes below 139% of FPL, the Medicaid eligibility threshold Any questions on this chart before I move on? This next slide shows what we know about the impact in Vermont as a result of removing the federal penalty As the Board well knows, Blue Cross Blue Shield and MVP each requested a 2% increase in their 2019 individual and small group rates directly attributable to the elimination of the federal penalty The 2% requested increase would have increased overall premiums by approximately $9.8 million The Green Mountain Care Board reduced it from 2% to 1.6% thereby lowering the overall to approximately $7.8 million We know that that's what happened in 2019 It's unclear what will happen in the future The chart on the right hand side is a chart from Kaiser Health Report from March 2018 Kaiser conducted a survey and asked participants whether or not the individual mandate was still in effect for 2018 So the individual mandate penalty was removed beginning in January and these people were surveyed in March A relatively small percentage of survey participants were correct The correct answers are the people in the dark blue And what this demonstrates is that it's unclear. People still are not sure about the status of the individual mandate and as individuals develop a clear understanding of the federal penalty status over time, enrollment and premiums may also be impacted over time So that kind of concludes the background what we know about Vermont using the data sources that are available to us and at this point I'd like to ask Jason if he would go over the federal individual mandate Are there any questions before I move on? Great, thank you Thank you Agatha and thank you for having me here today Again, I am Jason Levitis and let's see what's forward And I am here today thanks to the generous support of the Robert Wood Johnson Foundation which supports a program called State Health and Value Strategies which provides technical assistance to states around the country to implement the Affordable Care Act and other health care issues a lot of helping states navigate the federal landscape As part of that I've worked with several states on path in implementing individual mandates including New Jersey and Washington DC which as you know are the two states that have implemented them to date and as Agatha said I've been providing technical support to the working group which I think has been proceeding with great professionalism and skill and it's been a pleasure to work with them My charge today is to talk a little bit about the individual mandate just sort of nuts and bolts of how it works because it's a possible model for something that might happen here and also I'll say a little bit about what New Jersey and DC did in implementing their mandates and the modifications they made to the federal mandate So with that let's blah blah blah OK, so review the rules and workings and the modifications made by Jersey and DC OK, background, so I think Agatha mostly went through this federal mandate took effect in 2014 along with the ACA's other major coverage provisions the penalty is repealed effective at the end of this year New Jersey and DC passed individual mandates this year closely based on the federal one that will take effect in the beginning of next year and Massachusetts as you know enacted an individual mandate in 2007 as part of its big health reform law So let's talk about the federal mandate and just how it works So the basic structure of the federal mandate is a requirement for individuals to maintain qualifying health coverage qualify for an exemption or else pay a penalty So the key parameters of that structure are the definition of qualifying coverage exemptions that are available and the penalty calculation and I'll walk a bit through what the federal mandate does in each of those areas There's also the question of how it's administered it's primarily through the federal income tax system certain exemptions are granted by the federal marketplace Then the federal provisions also include an associated coverage reporting requirement health insurers and other providers of qualifying coverage have to send an information report to the IRS with a copy to covered individuals sort of like 1099s that you're familiar with from other contexts and then the federal mandate also includes outreach to the uninsured using the information that's collected from the federal mandate about who is uninsured to reach out to those folks and try to get them covered I'm not going to say a lot about the Massachusetts mandate that includes these same major elements sort of 30,000 foot level it's very similar, it's different in a lot of particulars the states that have been looking at a mandate have mostly been doing something based more on the federal mandate I think in large part just because it's easier people are more familiar with it there's continuity there but there are some elements of the Massachusetts mandate that a state may want to consider adopting and we can talk about that if you would like so on to qualifying coverage so the ACA refers to it as a minimum essential coverage or MEC and some people say MEC although that doesn't sound as nice to me but we'll say MEC and it's pretty simple it generally includes all conventional public and private health coverage employer coverage whether it's through insurance or self-insured individual market insurance Medicare Medicaid VA, TRICARE other federal programs it excludes limited coverage like short-term plans dental and vision only plans fixed indemnity plans and then CMS has the authority to designate additional coverage as MEC and this is important because the list that Congress put in the bill leaves out some things like self-insured student health plans which everyone thinks is good comprehensive coverage so CMS has the authority to say that MEC also counts exemptions so there are a wide range of exemptions and I think the key thing to know is there are exemptions that are written into the statute and then there is also again the authority for CMS to designate additional exemptions and they have exercised that authority in a variety of areas so there are exemptions for low income individuals folks with income below the tax filing threshold partly to shield them from paying a penalty and partly so as not to create a new tax filing requirement for people who otherwise don't have to file for unaffordable coverage where the cost of the enrollee to enroll is more than 8% in its index it's now 8.3% of income for short coverage gaps of less than three months members of Indian tribes of healthcare sharing ministries which is a sort of healthcare product which is not subject to insurance regulation but has become more popular in some places if you're enrolled in one of those then you're exempt and certain religious groups so there's this religious conscious exemption and it's fairly narrow in order to qualify for that exemption it's only for certain religious groups that have longstanding exemptions from social security and Medicare payroll taxes it's basically groups that as a policy do not accept any kind of social insurance so if you're in that group and you're already exempt from social security and Medicare payroll taxes then you also can get an exemption from the federal mandate individuals living abroad are exempt certain non-citizens including undocumented immigrants and non-resident aliens and then a range of other hardships there's a whole list that CMS has published loss of a job, foreclosure death of a family member and individuals can also submit an application to say hey I had a bad year and then CMS can consider those and grant an exemption there as well so most of these exemptions are just claimed on the tax return at the end of the year but a few of them under the statute and partly by administrative rule can be granted by the marketplace through a separate process that's available year round and the idea is that for some of the exemptions you want to know during open enrollment before you make a decision about whether or not to enroll about whether or not you're going to be treated as exempt so for example the affordability exemption, you can claim it on the back end, on the tax return you can also claim it beforehand and say it looks like my income is going to be such that coverage is going to be unaffordable give me an exemption now and then that is fixed for the year and then again CMS has brought authority to designate additional exemptions which they've done in a bunch of different cases the penalty calculation so this is sort of at a high level I think I included at the end a more detailed slide that runs through exactly how the calculation works of course it's invisible to most tax payers it's calculated by tax software or your tax preparer but at a high level it's zero at low incomes as we discussed anyone below the filing threshold and indeed because of the affordability exemption most everyone who's eligible for Medicaid which is at least up to 130% of the federal poverty line in states that expanded Medicaid all of those folks are generally pay zero penalty then beyond that it increases both with income and with the number of uninsured members of the family and then it's capped no one pays more than the cost of coverage and it's also prorated for partner coverage so if you have coverage for six months out of the year you'll pay half the penalty etc and again the appendix has additional details and I'm happy to answer questions about it administration so the penalty is collected through the individual income tax system there's a single line on the 1040 which I point out on the next slide if you just want to see what it looks like where you can check a box for full year coverage there's also a space to report the penalty amount there's also a separate form form 8965 where you claim or report an exemption so if you're claiming an exemption for the first time there then there's a code you put in or if you were granted an exemption by the marketplace you get a code from the marketplace which you put again on that form so this next slide again the yellow arrow shows line 61 which is the line on the 1040 and I always get this question so I'll say is that line going to stay in place with the federal mandate penalty repealed the answer no one knows you know the IRS has not released any draft forms for 2019 if I had to guess based on my knowledge of IRS from working with them for many years the real estate on the 1040 is extremely valuable and they are going to want to get rid of that line because it's not going to be connected to any any payment anymore so I think there's a good chance that that line will be gone from the federal 1040 in a couple years okay uninsured so as I mentioned having an individual mandate provides pretty detail information about who is uninsured everyone has to report it on their tax return so the ACA leverages this information by providing for the IRS to notify the uninsured of coverage options each year now bless you the IRS has in fact generally used alternative means for outreach I think in large part because of the cost they don't want to pay to send letters to everyone who is uninsured each year as you may know the IRS has suffered a lot of budget cuts but you know I think from my standpoint you know there's a lot of value in doing it and the one year that the IRS did do that they did see results and indeed Massachusetts has made robust use of this information for outreach over the years they've talked to the Massachusetts folks they'll credit this information and the outreach they've been able to do as a major reason for the success of their health reform and having the lowest uninsured rate in the country um finally changes that DC and New Jersey made in passing their individual mandate so what DC and New Jersey did so there is a common method of passing tax laws called at the state level called conformity with the federal with the federal code so for example I think 27 states for their state income taxes they define adjusted gross income by reference to federal AGI and then they can make you know certain state level additions and subtractions but they start with that so New Jersey and DC basically did that for the individual mandate where they said we're going to incorporate the state mandate rules before it was repealed into their state codes and then they made certain changes on top of that so I'm going to talk a little bit about some of the changes that they made and you know most of them aren't big policy changes most of them you'll see are just sort of adjustments that are necessary for state context so one is they added an exemption for the state filing threshold as I discussed before you don't necessarily want to make people who don't otherwise have to file a tax return file it just for the individual mandate purposes so DC and New Jersey both added an exemption based on their state filing threshold they added exemptions for out of state residents which is something that Massachusetts has as well Washington DC only added an exemption for individuals whose income made them Medicaid eligible so as I mentioned before individuals who are Medicaid eligible are generally exempt from the federal mandate penalty due to the exemption but it's a complicated set of rules to get there and it's not very intuitive and that's why you ended up with all of those accidental payments by folks who were exempt and so I think that DC thought that if they added an exemption that more explicitly applied to those folks they would avoid the erroneous payments and the confusion. New Jersey didn't do that but again New Jersey incorporated the authority that's in the federal mandate to create additional exemptions so they now can go ahead and say we too are going to have an exemption for everyone who's Medicaid eligible or really whatever income level they choose the penalty cap so the federal penalty as I mentioned is capped at the cost of coverage the way it works there it's the national average bronze plan premium is the cap DC and New Jersey both shifted that to use the state average bronze plan premium which doesn't have a lot of impact but it's important is probably going to stop calculating the federal average the national average penalty they both include provisions which Massachusetts also has to ensure that there's no double payment if the federal penalty is ever reinstated it's not very likely that the federal penalty is going to be reinstated but who knows and there's no harm in something that says if you do have to pay a federal penalty then your state penalty is reduced by that amount which is what Massachusetts had done earlier they both have a reporting they both have the reporting requirement modified both for simplicity and for state authority the simplification is that basically they say that reporting entities can use their federal reporting at the state level as well and if since the insurers and other coverage providers are already and will continue to be doing that reporting at the federal level including sending it to the individual New Jersey and DC are saying you don't have to send a second statement to the individual which is seems to make sense and then other simple adjustments like changing the name from CMS to whatever agency exists in the state other things like that so that is everything I wanted to talk about again in the appendix you'll find more details about the penalty calculation if you're interested and beyond that I'll just say thank you for having me and I'm happy to answer any questions you have well thank you Jason it's a great pleasure to have you and I hope the plane ride up was good and I hope that the impending weather forecast doesn't make your stay much longer than you would hoped my first question is in your research did you do any analysis on pre ACA mandate and after ACA mandate on free and uncompensated care and what percentage of the overall health care spending that was and what the effects might have been on the cost shift sure so I have not done research like that myself and I should note I am a lawyer not an economist so my work tends to focus more on the legal and regulatory and the policy aspects but I don't normally engage in economic research but I am aware of research like that which folks at the urban institute have done a bunch of research in that area and they certainly found a significant effect on uncompensated care and I think they also found that to the extent that states had programs that subsidize uncompensated care when it happens then the states could also potentially reap savings from reducing the uncompensated care that was happening in the state and I am happy to share that research with you but again it is not original to me. Has there been any analysis in Massachusetts on whether there are other factors that have led them to lead the nation in unsure other than the individual mandate? So there certainly has been and indeed there has been research both in Massachusetts and also at the federal level about the impact of the individual mandate the challenge in doing it as it sounds like you are aware is that the individual mandate came into effect at the same time as other changes and so how do you tease out the impact? The best research that I am aware of especially about the federal mandate was done by, so I am also a non-resident fellow at the Brookings institution and a colleague of mine there Matthew Fiedler, he did some research where he looked specifically at people with incomes above 400% of the federal poverty line so they were not eligible for the premium tax credit or cost sharing reductions under the Affordable Care Act so if you look at them between 2013 before the main coverage provisions of the ACA were in effect and 2014, 2015, 2016 when all of that sort of came online you can get sort of a relatively less obstructed view of what the mandate did in isolation and when he does that he found a significant impact both on coverage and on premiums his coverage, the coverage effect he found turned out to be fairly similar to what major analyses like the congressional budget office have found which is a nationwide impact on coverage of something in the 7 to 9 million range in fact on premiums on the order of 10% I have a follow-up question to that how do you disentangle the mandate effect from the penalty effect in that kind of analysis so that's a great question and I am not aware of much of any research that has looked at the effect of having a mandate without a penalty so I can't really speak to that you could imagine that there would be some influence from it yeah and certainly you could look at individuals who have incomes low enough that they're exempt from the penalty but are just sort of aware of the mandate and what effect did it have on them there may be research like that and I'm not aware of it I'm probably the last one that should be saying this but it's similar to driving down the interstate that if you have the law that says you will go 65 you may or may not go there if you're like me you'll probably do a calculation of what is safe if there was no ticket involved and you probably would drive 80 but that would be me other questions from the board are I riding with you to Castleton tomorrow save you some time I just have a question about this the exemption at 80% of income and 8% of income and is there in your mind a solid rationale for that number or is that a number that came out of the scrum of Washington and that's where they ended up that's a great question I should know I often get that question about the amount of the penalty as well what evidence is there that this is the right amount of the penalty because the contours of the federal penalty and the federal affordability exemption are sort of similar to the Massachusetts one sort of lines that go up but they have different specifics and what's the evidence for which of them is the right answer and I must confess that I don't know of any evidence like that that the mandate is effective and I think general reasoning leads one to believe that a larger penalty is going to have a stronger impact on behavior than a smaller one but is the mandate penalty in the right place we really don't know that and again to your specific question about the exemption I think that there was research done into what fraction of income do many people pay for coverage today for employer sponsored coverage and 8% was determined to be reasonable and the way that it's indexed it is indexed by looking at how the average share of income that people spend on coverage over the year is changing so it is sort of tracked to something reasonable but was 8% the exact right place to start you know again I think it's more that it was there was a negotiation and it turned out to seem reasonable one kind of question so I understand the research involved in the effectiveness of the individual mandate and I'm wondering from the legal perspective and a regulatory perspective what are the conversations out there like around the carrot versus the stick approach in enforcing or encouraging compliance with the individual mandate sure so in terms of the individual mandate itself it is largely I mean in terms of the discussion out there it largely is associated with sticks of various kinds there are other options that are more like carrots those are generally different things I mean Vermont already has the subsidy or two subsidies both for premiums and cost sharing which you know we refer to it as a wrap because it wraps around the federal subsidies and so that's a great way to get more people covered through a carrot there are other ways states have worked on reinsurance programs which reduce premiums certainly doing outreach and education can have an effect as well but as for an individual mandate itself so there is some work especially in Maryland and a little bit in Connecticut although I think less developed in Connecticut to try to combine individual mandate with something that then takes the payment that that individual made and applies it towards their future premiums and therefore to refer to it more as of a down payment right so yes you weren't covered so you have to pay this amount now but this is not a penalty that you lose this is a down payment towards you purchasing coverage in the future so I mean a couple things in that one just from a policy standpoint on the one you know it certainly is a bit of a distraction in terms of you know seeming less punitive in some way from a standpoint of the incentives it creates I think it's helpful in that people then get discounted coverage so they're more likely to enroll once they pay the penalty on the other hand the upfront incentive the stick to get coverage in the first instance is weaker because you think you might not lose that money so maybe you say oh well I won't enroll this year because I'll owe a penalty I'll get that money back and apply it towards my future coverage so I think you know and as for you know how that how those balance in terms of does that create more coverage or less than a sort of plain vanilla individual mandate I'm not sure and then I think there's also there are also sort of administrative challenges involved with approaches like that just sort of questions that needs to be worked out which I think could potentially be worked out but would be potentially a fairly heavy lift and require a lot of coordination between your tax department and your marketplace in a way that would just take a lot of programming and figuring out questions thank you so I know some of the slides that will come out I think one of the challenges to an incentive for coverage that we ran into was that our concern was that in order to apply it in a fair so you have to either look at applying it like how do you parse that do you only give it to people who were uninsured for a period of time if you target it to a specific group so we started to go down that route in terms of like a tax credit idea or an enhanced premium assistance idea but there was I think we felt a little challenged by the fact that that was going to be an expensive alternative that didn't seem particularly likely to be move forward in the current budget climate so you'll see some more when the slides come out on Friday hopefully that gives some context in that but we spent at least three work group meetings or working group meetings trying to come up with creative ways to do that can I just follow up on what Jess was saying so I know this says here on our agenda it's the work group proposal here it says the overview of recommendations but it is just about the penalty so not having the slides we haven't actually got into the work group yet that's next on the agenda is to go over the working groups preliminary recommendations to get there I have one more question Jason the states have pretty much gone through the filing periods for the QHP filings for next year we know what the impact in Vermont is going to be 1.6% and we know that it would be less than helpful comparison to look at other states because Vermont had different things going for it that other states didn't have but he's compiled the information and what the variance is for the rate increases in other states because of the lack of the mandate the penalty so there has been some writing on this which again I'm happy to I should be keeping a list of things to send you there has been some research on this the one that sticks in my mind it went the other way is New Jersey announced that as a result of having the individual mandate in place this year that the proposed premiums for 2019 came in was it 8% or 6% I think it was 8% lower than it would have had they not instituted their mandate to take effect in 2019 but there's been a range of estimates that the picture has been complicated this year for a number of reasons one is that a lot of analysis showed that premiums for 2018 were probably too high and if there had not been changes like the federal mandate going away then in many places rates would have actually declined and actually they did end up declining in New Jersey so that's one piece of it I think the other piece of it and if there are any issuers in the room forgive me for saying this is that the level of uncertainty about the federal environment has been great enough for several years including about the enforcement of the federal mandate even when it was technically still on the books you may recall that in early 2017 there were stories about the silent returns the IRS not rejecting silent returns and whether the IRS was just in fact not going to be enforcing the mandate that and as the slide as the slide that Agatha showed in terms of public opinion a lot of people thought the mandate was already gone anyway for all of those reasons our understanding is that issuers may have already even before 2019 been inching up their premiums because of uncertainty or you know federal factors or you know sort of saying like well we don't know about this mandate we're going to increase it now a bit so premiums long story short we think that 2018 premiums already to some extent reflected a less effective or partially repealed mandate and so now when you go to a fully repealed mandate it's not clear that the jump to 2019 is going to be as big of course there isn't a fully repealed mandate there's a fully repealed penalty and we all make that mistake that's I think that's right yeah you know it would be interesting the Kaiser polling has not focused on that question it's complicated in part like you are absolutely right that if you read the bill it zeroes out the penalty and does not repeal the mandate on the other hand if you look at how say President Trump and other politicians talk about it all the time they talk about it in terms of the mandate is gone so it would be interesting to know what public opinion is because of course when issuers set their rates what they care about is do people think there's a mandate out there it would be interesting to know do people understand that distinction that the penalty is gone but the mandate is still in place and I'm not sure about that so Agatha do you want us to open it up to public questions at this point or wait till well I think maybe go through the recommendations the reason Jason went first is because so many of the working group's recommendations are similar to what he just discussed so they would make sense to package those together that's okay Jason do you mind if I use that clicker I'm gonna reuse some of your slides alright so we're gonna reuse a couple of Jason's slides so now I'll go through the working group's preliminary recommendations but before I do that it's important to note that the working group was unable to come to consensus on an enforcement mechanism as well as two of the exemptions the working group's report attempts to provide a fair and balanced presentation of alternative alternative approaches and I will highlight the areas of non-consensus when we get to them but now I'll go into the recommendations on minimum essential coverage what is qualifying coverage and since Jason just went over this I'll use his slide the working group recommends adopting the federal definition of minimum essential coverage mech as some people call it including all the forms of coverage Jason just went over on this slide however in adopting the federal definition for application in Vermont there are a couple technical corrections or modifications that the working group would recommend two of them specifically one is that currently federal MEC has both a definition and associated guidance and Act 182 adopted the federal definition as of December 31st of 2017 but not the associated guidance and so the working group would recommend that the associated guidance also be adopted as of December 31st 2017 so it's a technical recommendation the second recommendation is the working group recommends that the Department of Financial Regulation be provided authority to consider and deem new forms of coverage or health insurance products as MEC using the criteria established in federal law and guidance very similar to what D.C. and New Jersey did is taking it from the CMS level to the state level and so those are the two modifications that the working group would recommend as it relates to minimum essential coverage the benefits of doing this is that it provides consistency to policy holders so if someone had MEC compliant coverage last year they'll have it this year as well assuming they have the same plan and maintains high standards for health insurance coverage in Vermont and ensures that individuals will not be subject to different state and federal level state and federal definitions of minimum essential coverage and that in a nutshell the recommendations on MEC are there any questions? Questions from the board Robin anything to add before I open it up to the public currently not so any public comments or questions I hope so well that's a quiet group well minimum essential coverage might be the least tantalizing portion of the recommendations exemptions and after exemptions is enforcement and that will wrap up the recommendations so the working group recommends, I'm going to use Jason's slide the working group recommends adopting the federal list of exemptions which are up here on the slide but in adopting this federal definition the working group recommends also adopting that associated federal guidance as of December 31st 2017 modifications for application in Vermont so I'll go through these and they're actually very similar a lot of them are very similar to what Jason went over from New Jersey and DC so the first bullet low income below a tax filing threshold the working group recommends just syncing this up with the Vermont filing threshold bringing it to the state level the second bullet unaffordable coverage this is essentially an affordability exemption it's so closely related to the penalty whenever people talk about the they talk about an affordability exemption and vice versa so I'll actually discuss the affordability exemption when we get to the penalty slide the next bullet point short coverage gaps the federal definition is two months or less and so the working group recommends bringing it to three months or less this brings it in line with Vermont's definition of short term limited duration insurance the next bullet point this has to do with categories of memberships in certain groups and a majority of the working group recommends maintaining the ACA interpretation of this exemption the working group was approached by healthcare sharing ministries and Christian scientists specifically under the federal definition healthcare sharing ministries are exempt Christian scientists are not each of these groups requested to be exempt from the individual mandate the working group discussed these requests and decided to stick with the federal definition continued to exempt healthcare sharing ministries but not the Christian scientists but this is one of those areas where there was not full consensus Blue Cross Blue Shield does not agree with exempting healthcare sharing ministries and recommends that they also be subject to the mandate individuals living abroad again something that New Jersey and D.C. did that when it's a national mandate state borders don't matter but when it's a state based mandate state borders do matter and so this would exempt non-Vermont residents that make income in Vermont so if someone lives in New Hampshire but they earn income in Vermont they would be exempt from the Vermont mandate and then the last bullet point are their hardships the working group does recommend including a hardship exemption they recommend that Vermont issue a state specific guidance including a list of events that are presumed to cause a hardship this would make it easier to administer and easier for the public to understand and then lastly the second to last bullet is about how the exemptions are administered the working group recommends that all exemptions be claimed at the point of enforcement and not prospectively Jason mentioned that under the federal individual mandate someone could apply for the exemption part way through the year this would be a retrospective the working group recommends a retrospective administration so someone would request the exemption at the time that they need it and not at the time that they think they might possibly need it again this is reducing administrative burden lastly the working group recommends honoring all federal exemptions issued to individuals based on the criteria above so if someone is granted an exemption certificate on the federal level it would be honored in Vermont that concludes the recommendations on the exemptions we still have enforcement mechanism to go okay um the final set of recommendations addresses the enforcement mechanism and at this time I just want to read quickly the language from Act 182 which describes legislative intent on this topic it is the intent of the general assembly that the individual mandate to maintain minimum essential coverage established by this act should be enforced by means of a financial penalty or other enforcement mechanism and that the enforcement mechanism or mechanisms should be enacted during the 2019 legislative session in order to provide notice of the penalty to all Vermont residents prior to the open enrollment period for coverage for the 2020 plan year so that just kind of sets the stage for what the legislative charge that the working group was trying to fulfill as noted earlier the working group was unable to come to consensus on enforcement mechanism but in line with the working group's guiding principles that I mentioned earlier to present alternatives when consensus is not met the working group's draft report includes different enforcement mechanism alternatives so the um I'll first describe where there was consensus the group agrees that a key mechanism for maintaining coverage relates to continued and improved outreach and monitoring of the uninsured population specifically as it relates to improved outreach and monitoring the agency of human services will continue outreach efforts that will emphasize the responsibility Vermonters have to maintain health coverage the agency will also continue to educate consumers about the results of silver loading including the increase in premium subsidies for 2019 the relative value of non-silver plans and the options for unsubsidized members to enroll in reflective silver plans in in terms of enhancing monitoring the agency of human service will improve monitoring and timeliness of data on the uninsured to monitor any changes in Vermont's uninsured rate both overall and by specific demographics so that's an explanation of a mechanism by which we could maintain coverage through enhanced efforts of outreach and monitoring not all working group members believe outreach and monitoring efforts are sufficient alone those members recommend a financial penalty through the state income tax system in addition to the outreach and monitoring efforts specifically they recommend modifying the federal penalty for application in Vermont and I will go through that quickly using Jason's slide here so that first bullet point zero at low incomes the penalty approach would incorporate a flat exemption for families below a certain income what income the working group discussed a threshold level ranging between 200 and 400 percent fpl specifically they discussed using the doctor dinosaur qualification level of 312 percent fpl but did not reach consensus on a specific level the next bullet point increases with income and number of uninsured this this is the affordability exemption that I was punting from the exemption section the recommended penalty approach adopts the federal calculation so as Jason went over if the cost of coverage is more than 8.3 percent 8.3 percent now of household income for families above the threshold they would be exempt from the mandate the next bullet point no one pays more than the cost of coverage Jason already went over this with DC and New Jersey but the penalty would be capped at the lowest cost state bronze plan previously it was the lowest cost average national bronze plan but it's our understanding that the national average calculation will be discontinued so benchmarking into the state plan makes sense and then lastly prurated yes the working group does recommend that the penalty also be prurated when it's a state based penalty so you would only pay for it for the months that you did not have coverage so that concludes the recommendations okay other questions from the board once again Robin I'll try to see if you have anything further to add I know can you hear me now we can now yep okay good I must quite okay no problem at this point we'll open it up to the public for any comments or questions okay Mr. Healthcare Advocate I think there's a detail in the last point that actually made this note and that is that the average was in the order of $275 something like that don't quote me exactly it was in that range whereas you may remember from you recently made the lowest cost of bronze plan here in Vermont is more than $445 something like that and so when you're talking about around 3% of income spent on what either of those the proposal in front of you is significantly different and significantly more recognition thank you Mike yes well so that's not part of the mission of the work group on this particular piece of legislation those are the type of questions that would be better asked to representative Donahue when she's at the state house Mr. Chairman could I just add something on that certainly thank you so I think it is worth noting that all the states that have enacted state individual mandates have dedicated that money towards all sort of affordability purposes Massachusetts has long dedicated its mandate revenue for its state wrap which is similar to Vermont's and New Jersey created a state reinsurance program which is funded by the mandate revenue in D.C. has a similar provision it says it needs to be used for outreach to the uninsured or other purposes that support coverage or affordability on the purview of the current work but I think there is thinking to be done of if a mandate does collect revenue what is done with that revenue and how can it be used to help support coverage and help people comply thank you Mrs. Robin there will be I don't have to slide later in a a penalty that the recommendation would be to target that revenue towards affordability or enrollment super any other questions or comments Mike maybe I will just add to that I think it is important the health care advocates office appreciates all the members of the working group and Jason for helping us out I do want to say out loud in reference to Walter's last statement we believe a better strategy for dealing with our uninsured population to increase premium substance if the legislature if we are unable to get that we do recognize the role that a financial penalty has great thank you Mike anyone else if not thank you very much thank you thank you it clarified where the public comments from the work group is going and then separate that from our public comments there is a specific work group I think the HCA set up a specific comment website for folks to send their email I'm finding it cold a web email where folks can send their comments regarding this presentation and I also want to just comment if we do get those comments to the board I think we'll forward them to this because I think they're really on the working group subject not on the board's work so we should if we get them we will forward them to that great anything else if not thank you very much thank you is there well before I go to old business I just want to make one more public service announcement that tomorrow at Castleton University at 10 o'clock is the summit on workforce probably the greatest issue facing health care in the state and just a reminder it'll be the last one so with that being said is there any old business to come before the board is there any new business to come before the board is there a motion to adjourn I move to adjourn Judy if you could call the roll Robin Jess Yes Tom Yes Chair Yes thank you everyone have a good rest of the afternoon