MVP seeks 15.4 percent average increase in 2015 health exchange premiums

The second insurance provider participating in Vermont’s health exchange has requested a 15.4 percent increase in its average annual premiums for 2015.

MVP Health Care submitted the rate request in a filing with the Green Mountain Care Board on Monday. Blue Cross Blue Shield of Vermont, the other participant in Vermont Health Connect, requested a 9.8 percent average increase.

MVP’s proposal would increase the monthly, unsubsidized premium for a single person buying its silver plan by $76.84, or 18 percent, over the 2014 rate. The monthly cost of MVP’s lowest-cost plan, the bronze, would increase $61.59, or 18.3 percent, under the proposal.

The cost of MVP’s two high-deductible plans, silver HD and bronze HD, would go up the least at 10.7 percent and 10.8 percent, respectively.

MVP’s request cited the cost of prescription drugs among the reasons for the sharp increase, as did Blue Cross’ filing.

“We understand that a premium is more than a number, and that any increase will directly affect individuals who purchased coverage on Vermont’s health insurance exchange. Sadly, the rapidly-rising price of health care services in Vermont, coupled with a sharp hike in prescription drug costs, federal taxes, and an enormous slash in federal reimbursement rates, make the economics of providing coverage unsustainable in 2015 without premium increases,” MVP Interim CEO Karla Austen said in a statement. “In the next few months, MVP is committed to working with the Green Mountain Care Board to review our proposal in depth.”

The Green Mountain Care Board has 90 days to review and adjust the rate requests, which take effect Jan. 1.

Tom Brown

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  • Wayne Andrews

    What is wrong with our elected government officials? Do they really think the people can afford this, along with $4/gallon gas and a large increase in the Statewide education tax? What will it take to change you vote in the next election?

    • Bob Zeliff


      This is the free market at work. Private insurance companies asking for more money.

      Remember Obamacare is 100% private insurance companies…whom you pay. They are between you and your Doctor or your hospital. They just want more money.
      Is that a surprise??

      Are you advocating that Government take a more active role?

      • Craig Powers


        This is not the free market Bob, and you know it. How could there be any competition between just two insurance companies with a government entity lurking behind them with a gun to their heads.

        Why don’t you explain to all the readers the exact reasons that there are just two left in VT?

        • Walter Carpenter

          “Why don’t you explain to all the readers the exact reasons that there are just two left in VT?”

          Isn’t because back in the 90’s Vt at last disallowed insurers to cherry pick their enrollees? You know, go after the young and healthy with high deductible policies and refuse older people or those with medical histories?

          • Cynthia Beaudette

            The health care debacle is like declaring automobile repair a “right”. The State pushing mechanics to accept Autocaid and Autocare for the poor and elderly and the state paying mechanics 1/3rd to 1/2 what the service is worth. THEN! dictating to all insurance companies that they will pay the cost shift from auto garages. Every year the state mandates a host of other repairs insurance companies will have no choice but to cover…..or they must leave the state. All 41 insurance companies, fearing they can not make a profit in the state, which is why they are in business to begin with, leave. This eliminates all free market competition: end of freedom……”Hello” government interference….Hello tyranny. “Hello” single payer. Vermont is begging for a 1960 USSR and willingly trades freedom for State- run security. 15.4% this year? Soon Vermonters will have no discretionary income. But that’s OK. We will all be equally poor but secure….at least for a little while.

  • J. Scott Cameron

    A large premium increase after the first year was inevitable. BCBS and MVP came in with solid numbers at the outset of this program and the Green Mountain Care Board forced them to lower premium costs to make the plans more attractive. Now, with a year of data under their belts, the documented premium costs must be adjusted if the plans are to remain financially viable.

    • Jason Farrell

      Where do you get the impression that these companies now have “a year of data under their belts”? It’s June 4. The plans began on January 1. There’s no way the actuaries even had six month of data to make these initial projections. There’s not a single small business or individual policy holder I know of who can get a rate projection from either BCBSVT or MVP for 2015 this early because we’re always told that it’s too soon to project . And yet, both companies have already estimated their projected increases for Vermont Health Connect based on, at best, five months of experience. That’s suspect, as every plan I’ve ever administered has experienced higher rates of utilization and costs in the first quarter to half of a year than the rest of the year. More time, data and scrutiny by the Green Mountain Care Board, which now represents a very large majority of BCBSVT and MVP’s business portfolios, should drive down amount of these rate increases.

    • Scott:

      You are on to something by citing the Green Mountain Care Board’s (GMCB) rejection of the BCBS and MVP rate filings last year.

      After a comprehensive actuarial review, the Commissioner of the Department of Financial Management recommended the BCBS and MVP rates to the GMCB saying they were not “excessive or unfairly discriminatory” or in other words they met the state’s standards.

      The GMCB rejected the recommendations from the Commissioner and reduced the BCBS rate by 4.3% and MVP by 5.3%.

      A reality in this process is the political pressure on the GMCB to keep rates down. Last year it is well within reason to suspect that the Governor’s office put pressure on the GMCB to reduce the requested BCBS and MVP rates even though the Commissioner of Financial Management had supported them.

      Unwarranted pressure to keep rates low is known as “rate suppression”. If rates are unjustifiably suppressed in one or more years, even greater increases are required in subsequent years to compensate.

      Rate suppression has happened before in Vermont and the results can be costly. One example is the handling of workers’ compensation insurance rates, which were believed to have been suppressed in the late 1990s and early 2000s resulting in severe problems in the mid 2000s. Pushing rates down for political reasons solves nothing and only insures problems down the road.

      Last year the GMCB significantly reduced the rate requests from BCBS and MVP. Now the Board is faced with new substantial rate increases while still having to face the inevitable political pressure to keep costs to consumers down.

      This is in a tough spot for the GMCB. Will they suppress rates this year under political pressure or bite the bullet and allow rates to move to where hard nosed actuarial analysis dictates?

      • Jason Farrell

        I sure would love to negotiate with you. You’re suggesting that all I’d need to do is convince you that my numbers represent “hard nosed actuarial analysis” and you’d roll over and accept them? What are you selling besides this line of crap? I know we can make a deal!

        • Jason:

          You apparently know something about the rate setting process that prompts your comments.

          Please tell us how you think conclusions on insurance rates are reached and what “hard nosed actuarial analysis might actually entail.

          • Jason Farrell

            Since you created the phrase “hard nosed actuarial analysis”, maybe you should define that.

            Anyway, I do know that what’s being described in this article is simply the beginning of a rather typical negotiation process. I also know that it’s not atypical for an insurance company to deliver a preliminary rate increase number that is not the best number that’s available during such negotiations or the one agreed to at a later date. If businesses were to simply accept the initial offer provided without scrutiny, or a counter offer, then businesses wouldn’t be negotiating well, and would be overpaying over time. A lack of investment in this process would neither serve their businesses, nor their employees. The Green Mountain Care Board will look at the initial rate increase requests and negotiate with the insurance companies just as businesses have, and should. I know that such negotiations have everything to do with established and historical business practices despite your conspiracy-ladened suggestion that such negotiations are the result of “political pressure to keep costs to consumers down”. The Green Mountain Care Board in representing 58,000 consumers has the consumer buying power in this negotiation process to keep costs to its consumers down. Should these companies conclude they cannot negotiate down any further and remain profitable, they’ll choose not to participate in Vermont Health Connect. I predict that they won’t as they’d lose access to a very large part of their book of business, and that their first offer isn’t their best offer.

      • Walter Carpenter

        “Last year the GMCB significantly reduced the rate requests from BCBS and MVP. ”

        Do you want them to charge higher rates?

        • Walter:

          Like you I’m a consumer and would like to pay the lowest possible price for my insurance.

          However, with insurance adequate premiums must be collected to pay the claims that are made in addition to covering overhead and surplus.

          This is such an important concept that it’s enshrined in the Vermont law that states: Rates must be adequate, not excessive or unfairly discriminatory.

          There is always tension between the regulator and insurer when determining rates but at the end of the day enough premium must be collected to pay the claims or the system doesn’t work.

          Affordability for consumers is another issue separate from determining rates. Affordability is one of the objectives that the GMCB is striding to achieve through reducing and controlling medical provider costs. If medical costs can be reduced the results will show up in the rate setting process.

          Affordability is not achieved by suppressing rates in response to political pressure.

          • Walter Carpenter

            “Like you I’m a consumer and would like to pay the lowest possible price for my insurance.”

            Peter, this is a huge part of the problem. Health care is not about consuming. It is about people needing care as we all will. Health care is not buying a used car. It is about all of us.

            “Affordability is not achieved by suppressing rates in response to political pressure.”

            Yes, I understand how health insurance works, including the overhead coverage in which we are paying dearly for, including the huge salaries of insurance ceo’s. But political pressure usually comes from below — from those in the voting booths who exert pressure on the political system to do something.

        • Jason:

          Although you quickly jumped all over my initial comments, you now admit that you don’t know what “hard nosed actuarial analysis” might actually entail.

          And what in the world does your comment: “If businesses were to simply accept the initial offer provided without scrutiny, or a counter offer, then businesses wouldn’t be negotiating well, and would be overpaying over time.” have to do with anything I’ve said?

          To help you along, this is what basically happens in the rate setting process. Since my initial comments were premised on what happened last year, I explain from that prospective.

          An insurance company submits a request for a change of rates to the state regulators. The request is accompanied by the company’s past experience, expectations of future claims and related numbers tied together and supported by an actuarial analysis.

          The state then puts the rate request through a “hard nosed actuarial analysis” which tests and challenges the data and related assumptions. The process does involve discussion and negotiation as the issues are usually not black and white in nature. The objective of the state’s analysis is to insure that requested rates are: adequate, not excessive and not unfairly discriminatory as required by law.

          Last year the Commissioner of the Department of Financial Management followed this procedure as has been the case for years before the establishment of the Green Mountain Care Board (GMCB). Following this “hard nosed actuarial analysis”, the Commissioner determined that the filed rates were not “excessive or unfairly discriminatory” and recommended them to the GMCB. It’s worth pointing out that the state’s experts in rate analysis reside in the Department of Financial Management.

          I assume the GMCB used their own professional actuaries and their process was probably similar to what the Commissioner did. However, in discussing the process of determining health care rates, Anya Radder Wallack said: “This process we’ve found to be very opaque and very frustrating”. Not surprising as the process is difficult and especially so if you’ve never done it before.

          Notwithstanding being new to the process and the “opaque and very frustrating concerns” relating to the difficulty of the task for Ms. Wallack and the GMCB, they ignored the recommendation of the Commissioner and the work of her experts and reduced the requested rates for both BCBS and MVP.

          Was the GMCB correct in its decision to reduce the requested rates in opposition to the Commissioner’s recommendation? It’s hard to tell at the actual point of action, but with time the answer to the question gains clarity.

          The recently requested substantial increases averaging 9.8% and 15.4% submitted by BCBS and MVP, respectively, strongly suggest that the GMCB did likely suppress rates last year. If the rates approved last year had been adequate, it’s not likely we would be seeing such large requested increases this year.

          Was there political pressure on the GMCB last year from the Governor’s to reduce the rates? My guess is yes.

          So back to where we started, what will the GMCB do this year with rate requests? That probably depends on how much pressure is exerted from the 5th floor. One thing we know for sure, insurance rates cannot be determined by political pressure designed to keep insurance affordable.

          If the Governor and the GMCB want to insure that rates go down, they must succeed in wringing costs out of the medical service system. Even this effort has an ugly downside, its called rationing.

          • Jason Farrell

            Thanks for “helping me along”! You’re too kind.
            “If the rates approved last year had been adequate, it’s not likely we would be seeing such large requested increases this year.”
            This “if – then” type of statement is simply supposition not supported by anything but your own conjecture…
            “Was there political pressure on the GMCB last year from the Governor’s to reduce the rates? My guess is yes.”
            …followed by what appears to be a rhetorical question in used to confirm support for your own pre-conceived belief of what was responsible for last year’s rate agreement between the BCBSVT and the Green Mountain Care Board. Remember, this is a private business participating in the exchange marketplace. No one forced them to accept the terms or to participate.
            You also fail to contemplate, or at least acknowledge, that the cost of insurance has been going up at rates not significantly different than this request for at least a decade. And, in order to keep those rate increases artificially low, many insurance companies have sold plans that require higher out of pocket expenses (“skin in the game”) which further increase the financial burden on businesses and/or policy holders. BCBSVT’s initial average rate increase request isn’t far from what many of Vermont’s small businesses and individuals have experienced, and it’s not the final number that will be settled on. You conclude ahead of a final agreement between the two parties that what is causing this initial rate request is political, but I don’t think you’ve demonstrated that in any of these posts in this thread despite multiple attempts. I do agree that “bending the curve” of annual rates will require more “skin in the game” (as insurers love to say) and that it won’t be done without some measure of honesty about what can, and should be done to contain costs.

      • John Greenberg


        I’m not following your political logic.

        You say that the GMCB denied some of the rate increases LAST year for political reasons.

        But last year was not an election year, so political logic dictates that rates rise, precisely in order to keep any increases to a minimum THIS year, which IS an election year.

        • John:

          Politically motivated behavior occurs every day, every week and every year regardless of the election cycle, a fact you well know.

          Political motivation to act is heightened when big promises with wide public impact such as those to reduce health care costs fail to materialize or appear to be slipping away.

          Last year the introductory health care premiums were deemed to be high. They were knocked down by the GMCB despite being supported by the Commissioner of Financial Management. This reduction gives the appearance of the presence of political pressure.

          This year’s average rate increases of 9.8% and 15.4% from BCBS and MVP, respectively, could also serve as strong motivation to interject political pressure in the rate setting process. Such pressures may bring short term relief while setting the stage for longer term problems.

          To get health care premiums down or stabilized, the GMCB must bring the primary driver of health insurance costs down, that driver is medical services industry costs.

          In no way, do I let the administrative costs of the insurance industry off the hook, they must be checked, but it is medical costs that represent the real money or the elephant in the room.

          The GMCB I would guess is finding that getting the elephant on a diet is not an easy task.

        • Jason:

          I don’t know for certain what occurred last year as I wasn’t there. I do know how the system works and the pressures that are applied purely for political reasons and not supported by actuarial or financial analysis.

          I have been there and seen things first hand. How about you?

          I’ll leave it at that.

          • John Greenberg


            You conveniently evaded my point. Sure, “Politically motivated behavior occurs every day, every week and every year regardless of the election cycle, a fact you well know.” But political timing is another matter.

            Let’s get down to basics, shall we. Either the insurance companies need a rate increase – which everything you say supposes – or they don’t. I presume that your supposition is that costs are rising and that the companies need to cover their expenses. I take that to be your supposition because you argue that since rates were not allowed to rise enough last year, they have to rise MORE this year.

            But that leads to my point. Assuming still that you’re correct, your argument leads to this conclusion: at SOME point the rate increase MUST be granted or the companies will no longer do business in Vermont. Presumably again, the 5th floor knows that as well as you do. But, still based on YOUR assumptions, that means that the question really isn’t IF the needed increases will be granted, but WHEN.

            Shrewd politicians will therefore time the “when” to occur when the public reaction is least important, which is to say, a political “off” year. THAT was the point I was making.

            All that presupposes that your assumptions are correct. The alternative – and frankly more plausible – explanation is Jason’s: namely, that these are always negotiated settlements, and the insurance companies come in asking for more than they expect to get. For what it’s worth, my own guess is that this is precisely what’s at work here, although I have absolutely NO experience or expertise in this area.

            I would note that Jason’s version is supported by the comment you quote from Anya Rader Wallack: “This process we’ve found to be very opaque and very frustrating” You take that as a sign of her inexperience. Alternatively, she might be suggesting that determining costs in anything having to do with the US healthcare system is incredibly opaque, an observation which is far from unique to her and that really this is just a negotiation like many others.

          • Jason Farrell

            Been there done that, too!

            I’ll leave it at that.

            Thanks for the discourse.

            Be well!

  • Here’s a list of articles and studies analyzing how the ACA may impact healthcare premiums.

    • John:

      I’m not surprised by the double teaming by you and Jason……..that’s what it takes to attempt to hold a superior opponent down.

      Despite your double teaming, you’ll continue to lose because you fail to understand or ignore the substance of what is said.

      What do you think “hard nosed actuarial analysis” means? Jason didn’t know and honestly said so, but you seem to be continuing to struggle with comprehending the concept.

      I’ll assure you that it doesn’t mean rolling over or taking anything for granted. It does mean fully understanding the filing and pushing back on every point until all questions and doubts are fully addressed to satisfactorily support whatever rate is ultimately approved.

      So John, its back to the training room for you to restudy the film to see why you’re coming up short with your double teaming efforts. At this point, you’re in danger of dropping off the depth chart and relegated to the practice team.

      • John Greenberg


        First, I don’t know Jason (other than as a commenter on Vermont Digger). Apparently, you find it apparently easy to declare yourself a winner when you ignore all the points your opponents raise. I’m glad it makes you happy.

        Second, I didn’t miss your point about “hard nosed actuarial analysis,” but I fail to see how it’s relevant to the points I raised. (And by the way, Jason asked you to define the term, which does NOT imply that he “didn’t know and honestly said so.”)

        Your argument was that after the “hard nosed actuarial analysis,” the GMCB acted for political reasons. You provide no explanation for that hypothesis, and I challenged it for reasons that I won’t repeat.

        In sum, apparently you’ve managed to convince yourself. I congratulate you. For the reasons I’ve already explained above, I find your arguments completely unconvincing. Enjoy your victory dance.

  • Valerie Mullin

    More numbers and how it can affect you personally…..remember, businesses with fewer than 50 employees are mandated to use this exchange which only has 2 options to choose from. We need more options on who to purchase from and how we get to choose our health care dollars with fewer mandates. I’m not a friend of insurance companies but like our schools, when you impose mandates, it has financial repercussions. Current Representative Fisher chair of Vermont’s Health Care Committee and Dave Sharpe (key member on the Ways and Means Committee) who has voted lock-step, to approve all Vermonter’s will not have health care choices should be hanging their heads low today. Because of their choices, along with our out of balance Vt. government, our family’s are not only getting short changed with high prices but high deductibles and fewer spending dollars in our family budgets.

    • Jason Farrell

      You should consider a disclosure statement with your political posts here, and elsewhere, to inform readers that you’re a currently a Republican candidate for Addison-4. This would enable readers the ability to judge whether your repeated attempts to single out and discredit the incumbents you seek to replace in your district are related to their performance, or your political ambition.

      • Paul Lorenzini

        What progressive district are you from Jason?

        • Jason Farrell

          I live in the city of Vergennes which is in Addison-3. We’re currently represented by Democratic Representative Diane Lanpher and Republican Representative Warren Van Wyck. Why that matters to you based on the suggest I made to the candidate is curious, but few would consider Addison-3 a progressive, or Progressive, district.

      • Kathy Callaghan

        That’s a just a bit harsh, don’t you think, Mr. Farrell? Ms. Mullin is entitled to write in as a private citizen, just as you and I are.

    • Bob Zeliff


      You seem to assume that more competition, i.e. more than two insurance companies would make rates lower.
      You also seem to presume that the some how the government is the main cause.

      If you look at the facts you will fine both assumptions are incorrect.

      The Obama Care exchange is 100% private insurance companies…open to all companies.
      Only two have chosen to compete in the Vermont market. This primarily due to Vermont being a small market not many $$$.
      If you look across the US you will see it is the small states that have few, usually two companies. Wyoming, a firmly republican state has only two. In fact one republican small state has only one insurer!!

      Remember Obama Care is free market private insurance and companies follow the $$$. The Vermont market is just not a big draw.

  • Jason Farrell

    I don’t think it’s harsh to politely suggest that Ms Mullin, a declared candidate for elected office, reveal that when she uses this public forum to criticize her opponents. It’s not a secret, but it may inform, as I suspect not every reader is aware of the fact that she’s a candidate. I fail to see how such a suggestion would threaten or injure the candidate in any way. In fact, such a revelation could actually gain her support. Why this simple suggestion is met with suspicion and consternation is more than a bit silly.

  • Keith Stern

    Yes Valerie should post herself to let people know that she is a candidate so if people like what she has to say and want the opportunity to support a candidate with a fiscally responsible and common sense approach to government they will know of one.

  • Wayne Andrews

    Why are all of you so called ‘experts’ not speaking to the fact us working stiffs are mandated to purchase health insurance. that throws out all of your theories about operating a normal business and attracting clients.
    All your comments above are related to businesses trying to attract customers. After ACA we are are coralled into a pen ready to be financially slaughtered.

    • Jason Farrell

      Because many of us working stiffs have tired of paying for the health care costs associated with those who either can’t afford or choose not to purchase health insurance but end up financially slaughtering” with unsustainable rate increases annually when we purchase health insurance for ourselves or our employees. That loophole’s closed.

  • David Dempsey

    I’m not sure why you say that the loophole is closed. Most Vermonters who recieved state subsidys to pay for Catamount or VHAP insurance plans are recieving similar subsidies for their health exchange policies. And people who choose not to have insurance still can pay the miniscule $95 federal penalty and instead of spending thousands of dollars for insurance. Aren’t we working, paycheck to paycheck, people still paying for them?

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