The proposed hikes, between roughly 9% to 19%, come amid rising hospital and drug costs, as well as new legislation — not yet signed by the governor — that would reform how practitioners work with insurers.
by Peter D'Auria May 14, 2024, 12:14 pm May 14, 2024, 6:11 pm
Updated at 5:20 p.m.
Blue Cross Blue Shield of Vermont and MVP, the only insurers that sell health plans on the state’s insurance marketplace, are seeking permission to increase insurance premiums between roughly 9% to 19% for the upcoming year.
Blue Cross Blue Shield is seeking an average premium hike of 16.3% for individual health plans, which consumers buy directly from the state’s insurance marketplace. Premiums for small group plans, for small employers with 100 or fewer employees, would increase by an average of 19.1%.
MVP is seeking an average premium hike of 11.7% for individual plans and a 9.3% increase for small group plans. (Because companies offer multiple insurance types — such as gold, silver and bronze plans — the actual increase on different plans may vary.)
The two nonprofit insurers filed their proposed rate increases with the Green Mountain Care Board on Monday. The board will consider, and possibly trim, those proposed rate hikes later this year. The approved new rates will take effect in January 2025.
Mike Fisher, the state’s health care advocate, pointed out that most individuals buying plans from Vermont’s insurance marketplace can receive federal tax credits to help pay for insurance, although some tax benefits could expire at the end of 2025. Those credits increase as premiums do, Fisher said.
But for people paying the sticker price, such as small employers who pay for their employees’ insurance, “these are really scary rates,” Fisher said.
“This can’t be the new normal,” he said. “It is so far from sustainable. It really leads to a great deal of concern for our ability to continue to have reasonably affordable plans going forward.”
Roughly 45,000 Vermonters are insured by Blue Cross Blue Shield on small group and individual plans, according to the insurer. MVP said it insures nearly 26,000 Vermonters on small group and individual plans.
If approved, those increases would be among the highest in at least recent history. Insurance rates for this year increased between 11% and 14%. For 2023, they rose between 11% and 19%.
Blue Cross Blue Shield and MVP said the proposed hikes are needed to meet rising costs for hospital services, drugs and an increase in people seeking health care after the worst of the Covid-19 pandemic.
“Growing utilization is contributing to higher hospital spending paired with recent price increases,” Blue Cross Blue Shield said in a Monday press release. “More Vermonters are accessing hospital care, and the increasing utilization is both indicative of efforts to lessen wait times and the more intensive needs of an older population.”
Another key factor is a pending piece of Vermont legislation, H.766, which would limit insurers’ influence over medical decisions made by health care practitioners. The bill has passed out of the legislature but has not yet been sent to Gov. Phil Scott.
The bill has support from medical practitioners, who say it will help patients access care more easily and help shore up the state’s clinical workforce.
Jessa Barnard, the executive director of the Vermont Medical Society, suggested that the bill could in fact help reduce costs, by lessening the burden of time and paperwork on medical providers.
“We’re going to be encouraging the Green Mountain Care Board to look at those (insurance rate) numbers really closely, and see if they are accurate or as high as the payers think they might be,” Barnard said.
But insurers have said for months that the bill, if passed, will hamper their ability to control costs, which will push up premium prices.
Blue Cross Blue Shield factored the spending impacts of that bill into its proposed rate hikes, spokesperson Sara Teachout said in an interview Tuesday. If the bill does not ultimately become law, Teachout said, the average premium increases would drop by about two percentage points.
“I am not sure if we’ve ever had a bill pass that (had) this significant of an impact on the premiums that were in development for the next calendar year,” Teachout said.
MVP, however, did not include the effects of that legislation in its calculations. Its premiums could increase significantly more if the bill becomes law, the insurer said.
“If signed into law, H.766 will add millions to the cost of health care in Vermont and force us to add upwards of an additional 10% premium increase on top of our submitted rates,” Deborah Brundage, MVP Health Care’s chief marketing and sales officer, said in an email.
“Despite good intentions, the timing, and effects of H.766 will be devastating for Vermont families and employers and their already strained budgets,” Brundage said.
Jason Maulucci, a spokesperson for the governor, did not reply to an email about the legislation Tuesday.
Scott “has some concerns about the uncertainties around cost, but also understands there could be benefits, creating efficiencies and improving patient experiences,” Maulucci told VTDigger last week. “So, he will weigh those out once it reaches his desk.”
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