[A]fter four hours of hearing intricate calculations from actuaries, members of the public pleaded with state regulators Wednesday not to raise their health insurance premiums again in 2017.
Business owners and members of the Vermont Workers’ Center told the Green Mountain Care Board they cannot afford the rate increase Blue Cross Blue Shield of Vermont is requesting.
The insurer covers 70 percent of the state’s commercial market and 90 percent of Vermont Health Connect customers. The company wants to raise prices on the health care exchange by an average of 8.18 percent, and the board’s actuaries say that number should be 8.24 percent.
The Department of Financial Regulation, which advocates for the solvency of insurance companies, testified that the rate increase for Blue Cross will keep the company solvent.
Vermont Legal Aid’s Office of the Health Care Advocate, which represents the public interest in front of the Green Mountain Care Board, wants the price increase to be slightly lower but did not say how much.
The formal part of the hearing took four hours. Public comments lasted for about an hour. Additionally, the board published 39 pages of comments from members of the public, all asking the board not to approve the price increase.
“I can tell that you have not put on your jeans and your T-shirts and sneakers and gone down to the farmers market and talked to people, because you would not say this is affordable,” Dottye Ricks, from the Vermont Workers’ Center, told the board.
Ricks pointed to hospitals, whose profits have tripled in the past 10 years. “Balance your budget off these people, not off of us,” she said. “People cannot afford health care as it is, and you want to increase it. What are they going to give up? Food? Clothes?”
Matt Birong, who owns 3 Squares Café in Vergennes and is a board member of Main Street Alliance of Vermont, said his and his wife’s health care costs have increased from about $500 a month to $925 a month, which he said “shockingly matches the mortgage” of his first home.
“I’m not only seeing (health care costs) spiraling out of control but also siphoning money that should otherwise be circulating in our economy,” Birong said. He said at his business he can’t “arbitrarily raise prices by 8 percent per year.”
Daniel Quipp said his health care premium costs 25 percent of his take-home pay. Quipp said he and his wife make $75,000 a year total and pay the same amount as higher-income people.
“If our household earned $150,000, I’d pay the same price for my health care that I do today,” Quipp said. “If I made the same pay as the CEO of Blue Cross Blue Shield, who I believe is sitting behind me and can verify his salary, we would pay the same premium.”
The formal portion of the hearing focused on how much money from premiums Blue Cross should be allowed to put into its cash reserves. The numbers being considered vary only slightly and could determine whether prices increase 8.18 percent or 8.24 percent.
Blue Cross, a nonprofit organization, says much of the price increase is beyond its control. For example, it projects that the cost of doctor visits, hospital visits and prescription drugs will increase an average of 3.7 percent in 2017.
Under the Affordable Care Act, the insurer is legally required to make sure at least 85 percent of premium prices goes to health care. In 2017, Blue Cross expects to put a full 90 percent of premiums into paying for health care.
Cory Gustafson, the spokesperson for Blue Cross, said the insurer has the same concerns as the Vermont Workers’ Center regarding the costs of health care. He said because more than 90 percent of premiums are for health care, advocates should be asking why the cost of care is going up.
Al Gobeille, the chair of the Green Mountain Care Board, said at the hearing that the board only has control over a percentage of insurance premium rate increases.
“That’s a big number (the 3.7 percent increase),” Gobeille said, “meaning it’s very important. And it’s not something that’s debated by actuaries.”
Press reports, he said, give the public the impression that the board has the power to manage premium increases.
“Saying that health care is unaffordable is just too brief of a sentence,” Gobeille said. “I think there’s a lot more to it based on” who gets care through different insurers and who gets insurance subsidies. About 77,000 people in Vermont get health insurance through the exchange, he said, but only about 11,000 people pay full price.
Dr. Allan Ramsay, a member of the board, said the Green Mountain Care Board has very little control over premium rate increases. “We are not going to regulate our way to controlling health care costs,” Ramsay said. “We’ve tried that. We’ve done it for five years.”
Jessica Holmes, a professor of economics who serves on the board, asked the board’s actuary to explain how much control Blue Cross can exert over health care cost increases given that 90 percent of the people in the Vermont Health Connect program choose Blue Cross.
Dave Dillon, an actuary who works on contract for the board, said he has been surprised “by the amount that the company cannot control.”
“We have specifically seen one hospital chain really impact things, where the payers could not do much to prevent it,” Dillon said.
Dillon said the insurer is affected by “certain hospitals or provider groups that have more power than others.” He added: “It can be very difficult for a carrier to negotiate even if they do have a market share of 90 percent.”
A hearing on MVP Health Care’s rate increase request starts at 9 a.m. Thursday at the Green Mountain Care Board hearing room in Montpelier.
