[A] health insurance company is suing the Green Mountain Care Board for telling the company it could not raise prices on one plan by an average of 27.4 percent and questioning whether the company can afford to operate the plan in Vermont.
MVP Health Insurance Co. is suing on behalf of Agriservices, a farming association that pays MVP to administer a health plan. The lawsuit in front of the Vermont Supreme Court says the Legislature has given the board too much power and that the board then overstepped that power when it didn’t allow MVP to increase the plan prices.
The Legislature created the board under Act 48 of 2011, which put Vermont on the path to single-payer health care. Since Gov. Peter Shumlin abandoned single-payer in January 2015, the board has continued to regulate hospital budgets and the prices that health insurance companies charge their customers.
MVP filed documents with the board Sept. 9 asking to increase how much it charges about 1,200 customers through Agriservices by an average of 26.9 percent. After finding a mathematical error, the company submitted an updated request Nov. 3 to raise prices an average of 27.4 percent.
The board’s actuaries reviewed the request and suggested the board approve an average increase of 25.9 percent, with the highest increase on the plan being 40.7 percent. The board denied the company’s rate request.
The board wrote that MVP’s request was “substantial” and higher than any other the board had ever received. Additionally, the board said MVP filed requests for price increases too late in the year for its customers to have enough notice before the prices would go up.
“We declined to approve the filing and any requested rate increase, and encourage the carrier to evaluate the (Agriservices) plan’s continued viability and affordability prior to any future request for additional rate increases,” the board’s decision said.
Gary Karnedy represented MVP at a hearing at the Vermont Supreme Court on Tuesday. He said the board denied the price increase because it was mad at MVP for submitting its original price increase request so late in the year, and he said the decision violated the company’s constitutional right to due process. He asked the court to overturn the denial.
Karnedy also asked the Vermont Supreme Court to eliminate three parts of Act 48 that tell the board to regulate insurance prices based on what is “affordable,” “promotes quality care” or “promotes access to health care.” He said the standards are vague and unidentified and were unconstitutionally given to the board.
“The Legislature provided only empty platitudes in the health care law,” Karnedy said. “What do those terms mean? Under (legal principles) you need to provide basic criteria for an administrative agency to be able to make those determinations.”
Bridget Asay, the state’s solicitor general, represented the Green Mountain Care Board. She said the board denied MVP’s request “because MVP’s own conduct and the timing and the size of the increase made it unfair, unjust and inequitable to the plan members.”
Justice John Dooley questioned why the Green Mountain Care Board needed to stop the small pool of consumers from paying a price increase of 27.4 percent. “This is not in any sense a mandatory plan,” he said. “Why aren’t they entitled to make that choice?”
Justice Marilyn Skoglund told Asay: “It just sounds like they were really angry at Agri-whatever.” She said the board mentioned in its decision how the company mixed up the terms “grandfathered” and “traditional,” and she said that “seems like a completely inappropriate factor.”
Kaili Kuiper, from Vermont Legal Aid’s Office of the Health Care Advocate, also argued on behalf of the board. She said her office usually advocates for consumers to have as much choice as possible, but health insurance is complicated.
“(In health insurance) consumers are forced to compare one plan to another and decide which plan is in their best interest,” Kuiper said. “I think it’s wonderful that Vermont has the Green Mountain Care Board to help Vermonters weigh those issues.”
Skoglund said: “That sounds like Big Brother coming in and telling you what you can buy.” She said the board rejected the price increase even though its actuaries did not altogether oppose a rate hike.
“The actuaries don’t look at consumer interest,” Kuiper said. “When they say the rate is not excessive, they are discussing the cost of the insurer and whether it’s excessive only to the insurer.”
