Vermonters spent $6.5 billion on health care in 2019, and costs continue to rise, according to recent data from the Green Mountain Care Board.
The yearly price tag for health care soared to $10,442 per person, just below the national per capita average of about $11,000. That marked a 4.5% increase for Vermonters over the previous year.
The expenditure report, which was presented before the state regulatory board Wednesday, showed a continued growth in health care costs, which accounts for about a fifth of the state’s gross domestic product.
The increases, which were driven primarily by rising drug costs and higher hospital budgets, fall roughly in line with increases from previous years. But board members and the public said Wednesday that the higher prices far outpace Vermonters’ salaries over that same period.
“Do you know anyone whose wage went up 4.5%?” asked State Auditor Doug Hoffer rhetorically in an interview. “Over time, it’s immense. People can’t keep up.”
The data comes as insurance companies filed for hefty increases in their 2022 rates for individuals who buy insurance through Vermont Health Connect. Blue Cross Blue Shield asked for 8%; MVP Health Care, 17%. Both companies say they hope federal dollars will cover the increased costs, shielding Vermonters from the rate hikes.
The report shows that Vermont’s health care costs have risen steadily over time, a 3.4% average annual increase year-over-year since 2011, when the total cost hovered around $5 billion.
In 2019, higher drug costs accounted for the largest portion of the increases, followed by higher costs at hospitals. Spending on Medicare, which covers older Vermonters, increased, as did mental health spending.
About 87% of the total $6.5 billion was covered by insurance, while 13% was paid out of pocket. Roughly half of that money went to hospitals. The remaining total was split between physicians, dentists, nursing homes, drugs and supplies, eye doctors, and other providers.
Because of the lag time in reporting and analyzing data, the report does not take into account Covid-19 or any 2020 data. That makes it hard to predict how health care trends have moved since, said Green Mountain Care Board member Tom Pelham.
Pelham called the pandemic a “black swan” in health care data. It “added a lot of turmoil to people’s lives and to the data that drives decision-making,” he said.
Covid-19 adds risk and uncertainty in health care planning and analysis. The data from 2020 “could show up next year and be unrecognizable,” he said.
He said it’s too soon to use the data to gauge the success of the state’s all-payer model, which was launched in 2017 to help curb costs. Vermonters could expect to see results during this operational year, but the lag in reporting prevents analysis of whether the state’s efforts have worked.
“We’re flying a little more blind,” he said.
Hoffer, who published two reports this winter criticizing regulators’ inability to curtail costs, said the Green Mountain Care Board should be doing more to keep health care affordable.
“I don’t see any effort on affordability,” he said. The board should be focused on “the continued growth in the industry and getting it under control,” he said. “We have not gotten it under control.”
Pelham contended that the cost growth used to be higher — and in fact, could be much worse.
“The rates of growth are not what they were in 2010, 2011, 2012,” he said, noting that the market is “more steady.”
It’s still pricey for Vermonters, he said, but “it’s better by orders of magnitude.”
