A recent study of proposed health insurance premiums in state exchanges shows Vermont could have the highest average cost and least variation in the price of the most popular silver plans.
Avalere Health, a Washington, D.C., consulting firm, compared 2015 insurer rate requests for silver plan premiums in nine states, and found that Vermont is likely to have the highest average cost silver plan at $466 per month, the next highest being Connecticut at $400 and Oregon being the lowest at $272.
Monthly premium rates in Vermont could increase by an average of $50, while in Oregon they could shrink by $3.
Vermont also has the least variation in silver plan premium requests for 2015. The lowest cost silver plan in Vermont could be $430 a month and the highest $508, while Indiana has the greatest variation with the lowest cost plan at $211 and the highest cost plan at $587.
The rates analyzed in the study are not final, and in Vermont will need the approval of the Green Mountain Care Board, which last year revised rate requests down an average of 4 percent. Even with the revision, Vermont had the highest cost silver plans in 2014 of the nine states included in the study. A federal Health and Human Services Department study found Vermont had the fifth highest premiums this year.
All of the other states besides Vermont have more insurers participating in their exchanges, but Elizabeth Carpenter, a director for Avalere’s health reform practice, said it’s too early to tell how competition is impacting rates.
“Certainly the thinking long-term is that more competition will at least hold premiums steady,” Carpenter said. But in the second year of exchanges new market entrants are proposing rates on both ends of the cost spectrum, driving greater variation in prices, not necessarily lower average costs.
Of the nine states in the report, only Oregon could have potentially cheaper average cost silver plans.
“The most important thing for people in Vermont to remember when looking at these national reports is that premiums on the exchanges are a local question,” she said.
State exchange premiums are a function of the size and demographics of the market, the underlying market rules as well as the market participants, according to Carpenter.
For instance, Avalere compared the average cost of a silver plan for a 40-year-old non-smoker. In other states the underlying market rules allow participating carriers to sell a different cost silver plan based on age and other factors such as whether people smoke.
That’s not allowed by the rules in Vermont’s exchange where carriers must sell the same cost silver plan to everyone.
Vermont is also not likely to see new entrants to its exchange because it is a small market and its plans to provide universal health care through a government program put the future of private health insurance in doubt.
The Green Mountain Care Board will have two public hearings on the rate requests of MVP Health Care and Blue Cross Blue Shield of Vermont, which requested 15.4 and 9.8 percent average increases for the range of plans they sell on the exchange. The hearing will be August 12-13 at the Statehouse.
The approved rates will go into effect Jan. 1.
Sixty-two percent of the nearly 30,000 Vermonters in the exchanges individual market are receiving a subsidy based on their income. Even with subsidies advocates say many Vermonters are struggling to pay premiums.
Vermont subsidies are supported through federal premium assistance and additional state assistance.
The feds have not said whether they will keep paying for premium assistance at the same level next year. If they don’t, state officials will have to decide whether to make up the difference or allow subsidies to shrink.