Josh Barro/Business Insider

Vermont's Obamacare Problem

Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information. She is the author of "“The Up Side of Down: Why Failing Well Is the Key to Success.”
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Vermont has signed up 2.5 percent of its population for the Affordable Care Act, a higher proportion than any other state. Here's why that's bad news.

I've seen multiple versions of this graph kicking around my social media feeds and RSS reader:

credit tk

It's usually headlined with some iteration of how Vermont is kicking everyone else's behind in terms of sign-ups. Maybe so, but this graph says more about how far Vermont has to go than how far it's come.

Vermont's government took the opportunity offered by Obamacare to undertake a radical experiment. As soon as ACA waivers are available, supposedly in 2017, Vermont will move to a single-payer system. Meanwhile, it is putting more of its citizens than any other state in the exchange. Per the state government:

"In 2011, the Vermont legislature passed Act 48 -- a law that created the Vermont Health Benefit Exchange. Vermonters will be able to start shopping for health plans on October 1, 2013 and the Exchange plans will kick in on January 1, 2014. The Exchange will be the only place where individuals and businesses with 50 or fewer employees can get health insurance."(Emphasis mine)

Per Kaiser, 5 percent of Vermont's population, or about 31,000 people, bought individual policies before Obamacare. Eight percent, or 50,000 people, are uninsured; some of those will be expected to move onto the exchange. And this source says that "An estimated 118,000 individuals and employees from the small group market will be served by the health benefits exchange in the first year."

In other words, Vermont is supposed to sign up 20 percent of its population through the exchanges, 12 percent of whom must have had some other form of insurance. And unlike in other states, the law offered no way for those people to buy insurance outside of the exchanges.

That means that in theory, almost 10 percent of the population of Vermont needs to sign up for insurance in the first three weeks of December, just to avoid losing coverage. Fortunately, Vermont is a small state, so that's a small number -- fewer than 60,000 people. The bad news is that Vermont's exchanges haven't been working too well. The governor has belatedly unveiled contingency plans: Individuals can extend their 2013 coverage for three months, and small businesses can sign up directly with a carrier. So hopefully, most people won't actually lose coverage. Nonetheless, for the state of Vermont, 2.5 percent of its population signed up represents a disastrous failure, not a roaring success. That figure means the state hasn't even managed to sign up the people who already had insurance, much less cover anyone new. And if it can't get things working better by March, when those temporary renewals expire, then Green Mountain Care will have resulted in a net loss of insurance coverage for the state.

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