[I]nsurance companies seeking to hike rates for health plans next year are making their case before state regulators this week.
The Green Mountain Care Board is hearing from the two insurance companies that offer plans through Vermont Health Connect โ Blue Cross and Blue Shield of Vermont and MVP Health Care โ both of which are proposing large rate increases next year.
MVP asked regulators to approve an average 11% increase. The proposed rates are up from what the company asked for when it first filed, in May, for an average increase of 9.4%.
Blue Cross’ proposed increase is even higher than MVP’s โ an average of 15.6% for its plans next year โ and the insurer said in May that increased prescription drug costs alone accounted for 8.8% of the hike.
In general, MVP and Blue Cross have cited the rising cost of prescription drugs and medical services as a leading driver of their proposed rate increases.
Last year, the board allowed MVP a 6.6% rate increase for its exchange plans and Blue Cross a 5.8% increase.
An independent actuarial firm, Lewis and Ellis, confirmed that MVP needs to increase its rates, projecting that MVP members will seek more care next year: about 1% more than last year.
MVP also projects costs to increase after reviewing proposed Vermont hospital budgets, which only became available to the company in recent days.
Since 2017, MVP’s market share in Vermont has roughly tripled โ in three years it has grown from insuring 10% to 40% of qualified health plans in the state.
However, the insurer reports that it needs to raise administrative costs from about $40 to $42 per member per month.
Board members questioned MVP about why it needs to raise rates while its membership in Vermont has increased dramatically.
The insurer said that in New York, the other state where it operates, it has seen a decrease in membership โ about a 5% loss in the last two years.
The company’s losses in New York are “outweighing” its gains in Vermont, said Matthew Lombardo, MVP’s senior leader for actuarial services.
“We are not growing overall as an enterprise, we’re contracting,” he said.
After hearing a day’s worth of testimony from MVP, state regulators and actuaries, Mike Fisher, the state’s health care advocate said that the concerns of patients were missing from the discussion about rate increases.
“It’s been interesting for me to listen today about all the actuarial considerations without any consideration of the consumer,” he said.
“The ability for Vermonters to afford coverage is key to the success of health care financing,” he added. “It’s not a nice afterthought after the experts have set the rates.”
Fisher read excerpts from comments that Vermonters have submitted to the board about the proposed rate increases.
Vermonters called the increases unaffordable and a burden on low-income residents who havenโt seen wage increases in years.
After Blue Cross pitches its rate increase on Tuesday, the board will host a public hearing on both insurers’ proposals at 4:30 p.m. at Montpelier City Hall.
