VTDigger posts regular coronavirus updates on this page. You can also subscribe here for daily coronavirus news. Please send your Covid-19 questions to coronavirus@vtdigger.org
The state’s two largest insurers are seeking similar rate hikes, but are taking differing approaches in how to factor in the coronavirus pandemic.
Representatives from MVP Healthcare reported that 1.6% of their proposed 7.3% rate increase is due to the costs of caring for Covid-19 patients; Blue Cross Blue Shield of Vermont didn’t include virus-related factors in their 6.3% rate increase request.
“There are so many unknowns,” said Blue Cross spokesperson Sara Teachout.
The companies filed their rates with the Green Mountain Care Board on Friday; the Care Board will accept public comment on the filings and plans to hold hearings in July.
Insurance representatives say the requests represent their best predictions amid a health care landscape turned on its head by Covid-19.
Regulators acknowledge the future is unclear.
“There could be an outbreak between now and July,” said Kevin Mullin, chair of the Green Mountain Care Board. “Everything at this point is speculative.”
Health care advocate Mike Fisher worries any higher health insurance costs are untenable for many state residents.
“Vermont families and Vermont businesses have experienced a tremendous loss of income,” he said. “I have real concerns about our health care infrastructure managing this moment.”
The requests come in the midst of the most unpredictable year of health care costs in decades. Since the virus hit Vermont in March, people have canceled routine appointments and postponed elective surgeries. Hospital revenue and visits have dropped by more than 50% at some facilities.
Blue Cross and MVP Health Care are incorporating the effects of Covid on 2021 rates in different ways. MVP Healthcare attributed 1.6% of the rate increase to the cost of Covid-19-related care, and justified the prediction with a set of assumptions: All elective procedures would resume in mid-May, and doctors would perform 110% of their normal care until postponed appointments are fully performed. Eighty percent of the population would get a vaccine at a cost of $75 a piece.
Blue Cross Blue Shield of Vermont disregarded the coronavirus entirely in its filings. The rationale?
“There’s so many unknowns to do with Covid to account for the cost [of the virus] in the system right now,” said Teachout. For BCBS, nearly half of the rate increase, 3.7%, is due to pharmacy costs. Teachout attributed that increase to a rise in specialty drug costs, which are very costly, but used by a small number of people.
Blue Cross has footed the bill for Covid testing and care from member reserves, but other costs don’t stop rising during the pandemic, said Teachout. “People still need to go to the doctor for their physical and mental health, pharmaceutical costs will go up, the cost of the medical care is going to go up,” she said.
So far, the decrease in care has meant that insurance companies have saved money; they’re not spending the cash they’ve collected in premiums to pay hospitals. UnitedHealth Group, one of the nation’s largest insurers, said last week it would reimburse customers for its savings during the coronavirus pandemic.
It’s too early to decide whether reimbursements for customers would be appropriate for Vermont, said Teachout. She predicted that patients will ultimately seek the care they postponed. Hospital budgets are also up in the air, she added. If struggling hospitals ask for higher rates for procedures from insurance companies, then insurers may ultimately pass the expenses onto consumers.
“The board will obviously be asking a lot of questions” as the situation continues to evolve, said Mullin. Ultimately, the Care Board has to make a regulatory decision based on “whatever information we have.” The board will also be considering starting a prescription drug advisory group to help control drug costs, he said.
The increases are less than last year, when rates went up by double digits. But according to Fisher, the impacts of Covid-19 mean that regulators shouldn’t revert to business as usual.
“The tremendous public health crisis changes the frame,” he said. The central question, he added, is “How do we get people back into a pattern of receiving the level of care they need? Vermonters need that, our providers need that. We need to be taking actions to make sure our health care system lasts for the long haul.”
Correction: An earlier version of this story incorrectly reported the amount of the rate increase requested by Blue Cross Blue Shield.
