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Officials Project Possible $20 Million Shortfall For Vermont Health Connect

Toby Talbot
Associated Press
Vermont's online health insurance exchange is running over budget.

Vermont’s online health insurance exchange is running over budget, according to a document obtained by Vermont Public Radio.

In a “situation summary” issued on Oct. 23, key officials at Vermont Health Connect indicate that the project could run nearly $20 million over budget. The document says “there is a current shortfall of $11 million compared to what was requested in (federal) grants.” The document goes on to say that the state may incur an additional $8.5 million in expenses for which there is not yet an identified funding source.

The conclusion, according to the document, is that “the state of Vermont will need to find alternate funding to fill these shortfalls.”

Lawrence Miller, chief of health care reform for the Shumlin administration, says he’s hopeful the state won’t suffer the kind of shortfall projected in the document. And he says it’s too early to know what kind of fiscal condition the project will be in by year’s end.  

"I have reasonable confidence that our federal partner would participate in covering the shortfall. There's always a chance that there would be some exposure to the state." - Lawrence Miller, Shumlin administration's chief of health care reform

  If Vermont Health Connect is in the red, then Miller says he’s confident that the Centers for Medicare and Medicaid, which has provided funding for the vast majority of the nearly $100 million undertaking, will bankroll the difference.

“I have reasonable confidence that our federal partner would participate in covering the shortfall,” Miller said Friday. “There’s always a chance that there would be some exposure to the state.”

If the federal government doesn’t grant the new funding request, Miller says, then the state will have to figure out on its own how to reconcile the fiscal imbalance. Miller says it’s possible the state could find savings elsewhere within the Agency of Human Services, and credit the funds to Vermont Health Connect.

He says the annual budget-adjustment process – that’s where departments running mid-year deficits ask lawmakers for additional funding – could also be used to cover Vermont Health Connect’s financial obligations.

Miller says he expects to have a better grasp on the financial picture in January.

Vermont Health Connect has been plagued with technological and managerial problems since its rollout last year. Those problems have led to some high-cost fixes – including the multi-million contracts with new contractors – that weren’t part of Vermont Health Connect’s initial budget projections.

The Vermont Health Connect site has been taken offline as the state’s latest contractor, a firm called Optum, works to repair security features on the site.

More than 100,000 Vermonters get their coverage through Vermont Health Connect. Miller says the state aims to have the site up and running again by Nov. 15, when VHC customers will begin re-enrolling for insurance policies.

The Vermont Statehouse is often called the people’s house. I am your eyes and ears there. I keep a close eye on how legislation could affect your life; I also regularly speak to the people who write that legislation.
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