[S]tate regulators have slightly lowered rate hikes for health exchange insurance plans proposed by insurance companies last month, calling the increases they pitched “unaffordable.”
The Green Mountain Care Board approved rate increases of 12.4% for Blue Cross Blue Shield of Vermont and 10.1% for MVP Health Care for Vermont Health Connect plans beginning Jan. 1, 2020. The rates are an average for all benefit plans the insurers offer on the state exchange.
Last month, BCBSVT asked the Green Mountain Care Board, the panel that regulates health care spending, for an average annual rate increase of 14.3% to 14.5%, while MVP requested a 10.9% increase.
The board acknowledged that the increases they approved for next year are not affordable for consumers, but in making their decision had to take the financial health of insurers into account.
Kevin Mullin, chair of the Green Mountain Care Board, said the decision was made in part because both companies lost money during 2018 — Blue Cross Blue Shield of Vermont lost over $10 million and MVP Health $1 million.
By law, the board has to take into account the affordability of requested rates as well as the financial stability of insurers.
“These rates are not affordable. We acknowledge they are not affordable. But at the same time we can’t put a company out of business,” Mullin said Thursday.
The board said the rate increases could mean increased premium costs for some of the 43,939 Blue Cross and 30,887 MVP members who use Vermont Health Connect plans. Others could see premiums reduced, depending on the plan they are enrolled in.
Last year, the board allowed MVP a 6.6% rate increase for its exchange plans and Blue Cross a 5.8% increase.
In asking for high rate increases this year, insurers cited the increased costs of providing health care, including prescription drugs, and the increased use of medical services.
Blue Cross stressed that it needed a higher rate to help replenish its reserves, which have been depleted in recent years.
The insurer said its reserves had fallen because the care board hadn’t approved its full rate increase requests in the past five years, and revenues from premiums haven’t been enough to cover increases in health care expenses, administrative costs, and taxes.
At a public hearing about the proposed rate increases last month, dozens of Vermonters spoke out against the hikes and said they would stifle their access to health care.
Mike Fisher, the state’s health care advocate, said Thursday evening that the rates the board approved this week will increase the number of Vermonters that are “priced out of getting the care they need.”
“I understand that the board has a tough dilemma of balance consumer affordability and the arguments that the insurers make about their solvency,” he said.
“I think I just got to say that this is a hard decision for Vermont consumers.”