(This story was updated Aug. 9 at 5 p.m.)Health care regulators said Wednesday they had decided unanimously to cut MVP Health Care’s requested increase for premiums on Vermont Health Connect almost in half.
The Green Mountain Care Board, which regulates insurance prices and hospital budgets, decided MVP could raise premiums by an average of 3.5 percent for calendar year 2018 — not the 6.7 percent the company originally requested.
MVP, which is based in New York, historically covered 10 percent of the people who use Vermont Health Connect but increased that share to 15 percent in 2017. The remainder use Blue Cross Blue Shield of Vermont, which has requested to increase premiums an average of more than 12 percent.
To scale back MVP’s premium increase, the board made a variety of mathematical changes. One of those changes, which took 1.3 percentage points off the increase, required MVP to take into account the board’s April order directing five hospitals to limit how much they increase prices starting Oct. 1.
In doing so, the board rejected both MVP’s and its own actuaries’ arguments that the premiums should not take into account hospital budgets because the board will not finish setting budgets for fiscal year 2018 until Sept. 15.
However, the board accepted MVP’s math on administrative costs. The board commended the company because it “has worked to reduce its administrative costs in recent years,” even though it has been losing market share in large group plans, which serve big businesses.
“As we issue our decision today, we are mindful of the uncertainties surrounding provisions of the Affordable Care Act, and the difficulties that many Vermonters — particularly those who do not qualify for premium assistance or cost-sharing reductions — face as health insurance premiums continue to rise faster than other economic indicators,” the board wrote in its decision.
“Today’s decision reflects our dual interests to approve rates as lean as possible, while ensuring that carriers remain solvent and therefore willing to continue to participate in our health insurance marketplace,” the board wrote.Mike Fisher, the chief health care advocate for Vermont Legal Aid, said his staffers were the only ones involved in MVP’s rate review case who advocated for customers and small businesses, as opposed to advocating for MVP’s solvency.
“Yes, we need to ensure the solvency of the carriers, but we also have to be mindful of the solvency of Vermont’s businesses and families who struggle to afford health coverage,” Fisher said.
“The decision means the insurance rate review process works,” he said. “The board did good work, and the process helped MVP recognize places where their filing needed to be adjusted.”
Kevin Mullin, the chair of the Green Mountain Care Board, said the board made the decision based on legal criteria of the insurance rate review process, the evidence presented at a hearing July 19, and other evidence submitted.
But Mullin said he is not satisfied with the amount premiums are going up. “Until we have insurance growing at the rate of inflation or less, I’m not going to be satisfied ever,” he said. “We have to get health care costs under control.”
“One of the ways that we’re trying to get health care costs under control is moving away from a fee-for-service system, (but) there’s not one single magic bullet that’s going to solve the problems that we have with ever-escalating health care costs,” Mullin said.
He said other factors include prescription drug costs and people using health services more often. He said Vermont might have a “Field of Dreams” scenario in which the supply of certain medical services drives how much people use those services because, “If you build it, they will come.”
“We have too many hospitals in my opinion that are all saying the same thing — that they’re seeing a huge growth in orthopedic surgery needs — and you have to ask yourself, ‘Where are these people coming from?’”
He said the board should keep in mind when reviewing hospital budgets and hospitals’ proposed capital investments “that we’re thinking about whether or not this is in fact building a Field of Dreams, and if we build it there’s just going to be higher utilization.”
“And I think we have to keep putting pressure on our insurers to help us with our job because they’re the ones negotiating with hospitals and doctors,” Mullin said.
The board still needs to say how much Blue Cross Blue Shield of Vermont can increase premiums on Vermont Health Connect. The deadline is Thursday.
Blue Cross has requested to raise premiums by an average of more than 12 percent, and the board’s actuaries largely agree with that, but Vermont Legal Aid says that number should be less than 9 percent.