The Green Mountain Care Board ruled Monday that proposed rates are too high for the state’s new health insurance exchange, Vermont Health Connect.
The board, which is tasked with controlling the growing costs of health care in Vermont, ordered health insurers to take specific steps to reduce premium rates for the Web-based insurance market. This decision will affect more than 100,000 Vermonters expected to buy insurance on the exchange individually or through businesses with 50 or fewer employees.
The board projects that its decision would lower Blue Cross Blue Shield of Vermont’s average premium rate by 4.3 percent and MVP Health Care’s average rate by 5.3 percent.
Blue Cross and MVP are the only two insurers that proposed premium rates for the exchange, which is set to open Oct. 1. The proposed premiums — available here — were for the six standard plans that the Green Mountain Care Board approved last year and for non-standard plans that the Department of Vermont Health Access may or may not approve.
The standard plans range from a “bronze plan,” with lower premiums and less coverage, to a “platinum plan,” with higher premiums and greater coverage. The board estimates that its order would reduce monthly premiums for individuals enrolled in “silver one” plans by more than $20 — from $413 to $388 for Blue Cross and from $432 to $410 for MVP.
“Hopefully this action, along with the new assistance Vermonters will receive from the state and federal governments, will make health insurance affordable to more Vermonters,” Anya Rader Wallack, chair of the board, said in a statement. “However, the underlying cost of health care and health insurance remain alarmingly high, and we have to redouble our efforts to address this problem.”
Insurers filed their rates in March, and the Department of Financial Regulation made recommendations to the board in June. The board then issued its decision on the rates this week.
The board ordered both insurers to put less money into their reserves. It ordered Blue Cross to reduce its estimated pediatric dental costs and to lower its projected growth in pharmaceutical use from a 6.5 percent increase to a 4.5 percent increase. The board ordered MVP to recalculate a range of items and reduce its projected rates of growth for medical treatments and pharmaceutical use. Reducing the projected growth trend lowers rates.
The board has the ability to approve, disapprove or alter rates, and the Department of Financial Regulation must apply them, under Vermont statute. In this case, the insurers would revise their rates based on the board’s orders, and the department would implement them.
Insurers have 30 days to appeal a board order to the Vermont Supreme Court, and no one from the department could immediately comment on how it would enforce the board’s orders.
Moving forward, Wallack said that the board must find ways to simplify the rate approval process and make health insurance more understandable.
“Ordinary people can’t pick this up and say, ‘I understand,’” Wallack said. “The language of this stuff is very opaque and technical, and what we tried to do is make it as understandable as possible … but I’d say it still remains pretty opaque.”
Wallack said that the two insurers filed rates differently and conducted different analyses, which creates discrepancies. But, she said, a publicly financed, single-payer health care system isn’t necessarily the answer to simplifying the state’s approval process.
“Do multiple carriers add complexity to the process? Yes,” she said. “But I think we could deal with that over time by doing a better job of standardizing what comes to us and how that gets evaluated. To me, that isn’t the big issue having to do with single payer versus multiple payers.
“The more central issue is how are we building up what is a reasonable health care cost? How are we constructing that analysis? And I think people will argue around single payer that you can reduce administrative costs, and arguably you could do that with multiple payers, too.”
To read the Green Mountain Care Board orders, click here.