US House panel: Vermont exchange violates ACA

MONTPELIER, Vt. (AP) -- State officials on Tuesday were defending the law setting up the new Vermont health care exchange against charges from critics — including a U.S. House committee — that it violates the spirit, and perhaps the letter, of the federal Affordable Care Act.

At issue is a Vermont state law that says starting next year, individuals and businesses with up to 50 employees have to get their health insurance through the state exchange, called Vermont Health Connect, which is to be open for enrollment by Oct. 1.

The House Oversight and Government Reform Committee wrote on Friday to Mark Larson, commissioner of the Department of Vermont Health Access, to say it appeared that requiring enrollment in the exchange violated the federal law.

"We are concerned this requirement will result in reduced consumer choice and higher costs for many businesses and individuals," the letter said.

"We are also concerned that the requirement conflicts with the text of (the ACA) that requires participation in the Exchange to be voluntary," it continued.

The letter referred to a section of the law saying "nothing in this (law) shall be construed to prohibit" health insurance companies from selling plans outside the exchange, or individuals and businesses from buying them.

State officials pointed to the next paragraph in the same section of the ACA to make the case that while the federal government promises in the law not to bar health insurance outside the exchange, states are free to take that step within their own borders.

It says, "Nothing in this title shall be construed to terminate, abridge or limit the operation of any requirement under state law with respect to any policy or plan that is offered outside of the Exchange to offer benefits."

Robin Lunge, director of health reform for the administration of Gov. Peter Shumlin, said the administration believes the federal ACA sets a "floor" and "clearly allows states to operate above that floor," in regulating the health insurance marketplace.

The dust-up pits a Republican majority in the U.S. House, which has voted more than three dozen times to repeal the ACA — and been thwarted by a Senate controlled by Democrats — against a state whose governor and Legislature want to go further than the ACA, using its exchange as a springboard to set up an as close as possible to single-payer system starting in 2017.

Critics of the Vermont plan, including Vermonters for Health Care Freedom and the National Federation of Independent Business' Vermont chapter, welcomed the House committee's letter.

"The act very clearly prohibits compulsory participation in the exchange," said NFIB State Director Shawn Shouldice. "We've never understood how the Vermont health care exchange can compel small businesses and individuals to participate in the exchange and we're encouraged that finally someone in Washington is asking the same question."

Rep. Mike Fisher, chairman of the Health Care Committee in the Vermont House, said business groups should welcome the state's approach.

Vermont Health Connect is being set up to allow most consumers to go on line and comparison-shop between health insurance companies' offerings, which Fisher said would allow health insurers to compete in a transparent marketplace with well-informed consumers.

He said the state is trying to build "one of the best places for a shopping experience and comparisons between insurance carriers."