Vermont officials said Tuesday they're cautiously optimistic the state's health insurance exchange will meet next week's deadline for smooth operations.

State officials had promised in the spring that Vermont Health Connect would meet key benchmarks by Oct. 1, ahead of the Nov. 1 start to an open-enrollment period when new customers can sign up for health coverage through the exchange.

Lawrence Miller, director of health care reform for Democratic Gov. Peter Shumlin, said Vermont Health Connect staff members are continuing to test the system and the testing is going well.

Smooth sailing this Oct. 1 would be a big contrast with when the program launched two years ago, when it was plagued by technical problems. As of June, the exchange still had a backlog of more than 10,000 people looking to make changes in their coverage to reflect new jobs or family situations. That backlog had been reduced to fewer than 3,200 as of Sept. 2, Vermont Health Connect spokesman Sean Sheehan said.

Meanwhile, last week the federal General Accounting Office gave Vermont the highest grades among states operating exchanges under the federal Affordable Care Act. It called Vermont's exchange fully operational as of February in three categories: eligibility and enrollment functions, financial management and reporting to the Internal Revenue Service. Vermont was rated partially operational in sharing data with a hub maintained by the federal Centers for Medicare and Medicaid Services.

Vermont got particularly high praise from the General Accounting Office for integrating the portion of its exchange through which people get health coverage from commercial carriers such as Blue Cross Blue Shield with the publicly funded Medicaid insurance program.

Steven Costantino, commissioner of the Department of Vermont Health Access, said the General Accounting Office report "illustrated that the (federal) government and states had some major challenges in converting over to implementing exchanges."

But, he added, "The Vermont plan to integrate the Medicaid and (commercial) health plans was, I think, a really good decision." One sign of proof, he said, is in the percentage of Vermont residents who lack health insurance, which went from 6.8 percent in 2012 to 3.7 percent at the end of last year.

Miller said he hoped the improving fortunes would put to rest calls, including by Republican gubernatorial candidate and Lt. Gov. Phil Scott, for Vermont to drop its status as one of 14 states managing their own exchanges and join with the federal exchange. Doing that would be extremely disruptive, Miller said, adding that the state-run exchange is "substantially less expensive" than joining the federal one would be.

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