Vermont Health Care Rates Increase

Insurance rates will increase in 2015 for Vermonters insured by the state’s health insurance exchange, Vermont Health Connect. On September 2, the Green Mountain Care Board approved new rates for the Blue Cross and Blue Shield of Vermont (BCBSVT) and the MVP Health Plan, although both approved rates were lower than those  which the insurance companies originally requested.

“As you can imagine this is a complex situation in which we need to balance concerns for affordability on the part of Vermonters with solvency (adequate reserves to be able to pay claims and remain in business) for the two insurers in the Exchange,” said Green Mountain Board member Karen Hein, M.D.

There are factors that drive the health care rate beyond the insurer’s control, such as drug costs and federal and state health care reforms. However, low cost health care is still important. The rates have to be low enough that Vermonters can pay for them, but stable enough that the insurers can stay in business.

As a summary from the Blue Cross and Blue Shield filing explained, though the insurance company understands the importance of keeping Vermont health care accessible, it was not possible to reduce the increase of rates.

“Since the factors driving this rate increase are almost entirely related to federal policy changes and increases in prices paid to medical providers in Vermont,” read the filing, “we believe that there is no way to further reduce these rates without underfunding the health care coverage on which Vermonters rely.”

The Blue Cross and Blue Shield of Vermont, proposed an average annual increase of 9.8 percent, but the board modified and approved 7.7 percent. BCBSVT is that state’s largest health care insurer, and covers roughly 60,000 people. The MVP Health Plan, which covers approximately 5,000 Vermonters, proposed an annual increase of 15.3 percent, and 10.9 percent was approved.

However, even if 2015 rates will be lower than the two insurance proposals, they will still be higher than this year’s rates.
“I was discouraged to hear that into the new year the rates are going to go up further,” said Dr. Michael Lyons, a family doctor working out of White River. “It’s not allowing the kind of access to care that was in the spirit behind it.”

Dr. Lyons pointed out that the number of monthly payment plans his practice set up has not decreased since the Affordable Care Act was enacted. The practice provides monthly plans for patients who are unable to pay deductibles but are also unqualified for Medicaid.  Dr. Lyons had expected the number of plans to decrease after health care became widespread.
“The way the whole thing has unfolded has been kind of disappointing,” said Dr Lyons. “One of the goals of the health care plans is to give everyone access to health care, but the expense has not made it quite come out that way.”

Even the cheapest options among the Vermont health care plans have fairly high deductibles, according to Dr. Lyons.  Such steep deductibles are still a high cost to pay out of pocket for Vermonters without an employer who will cover these costs.
Vermont has been at the forefront of health reform since the 1980’s, working for affordable, accessible health care coverage. When the Affordable Care Act was passed in 2010 the state chose to build its own health insurance exchange, Vermont Health Connect. The VHC website claims that the exchange is “for Vermonters, by Vermonters.”

Since Vermont has such a high percentage of health care coverage, the transition from private to public insurance is not likely to be detrimental.  However, small businesses will feel the impact of this change, as they must decide whether or not to help their employees pay for health care costs.

Vermont’s unique health care program is commonly regarded as a national model. If Vermont health care either becomes too expensive for patients or too risky for insurance companies, other states may become discouraged from developing similar health care plans.

“I’m still happy about health care reform,” said Dr Lyons. “It is good that we are taking a step to do anything because we have to move forward. But it seems like we have a long way to go.”