Insurance rates are set to spike next year after the Green Mountain Care Board this week approved rate increases for the state’s largest insurance companies.
And the insurance rate increases come as the board is about to begin considering next year’s hospital budgets, which could send insurance rates soaring even more if the board gives the hospitals what they are asking for.
Health insurance premiums for Blue Cross Blue Shield of Vermont will rise about $89 for small groups, and a little more than $105 for individuals in 2024.
Customers on the MVP Health Plan will see increases of about $78 for small groups and $90 for individuals.
Both companies were asking for even more, citing increases in hospital and prescription drug costs.
“The Green Mountain Care Board did more trimming of the insurance rates this year,” said Vermont Health Care Advocate Mike Fisher. “But the decisions are still double-digit rate increases. And for many Vermonters, insurance was already unaffordable.”
"The decisions are still double-digit rate increases. And for many Vermonters insurance was already unaffordable."Mike Fisher, Vermont health care advocate
The two health insurance plans covered about 68,000 Vermonters in 2023.
Both companies increased their premium increase requests this year as inflation and post-pandemic costs sent health care costs soaring.
Blue Cross Blue Shield's request for small groups jumped from a 14.5% increase to 17.5%, while the MVP Health Plan request rose from 12.5% to 15.4%.
The board shaved each of those down by about 4 percentage points in the end, after hearing from more than 147 Vermonters during the public comment period.
Fisher says the insurance premium hikes come as the Green Mountain Care Board is now getting ready to consider next year’s hospital budgets, and he says the board is in a tough position as the hospitals try to recover from the pandemic.
“Obviously this is a balancing act. We do need healthy health care institutions in Vermont. We care about them. We want them to be functioning well. And we also need to pressure them to do whatever we can to make this more affordable for Vermonters,” said Fisher. “And it’s important to note the relationship between the insurance rate increases and the hospital budgets. The decisions that are made this year about hospital budgets have a high impact on next year’s rates.”
The hospital budget hearings begin this week and run through August.
The Green Mountain Care Board, recognizing the historic challenges brought on by the COVID-19 pandemic, set a two-year budget increase goal of 8.6%.
Some of the hospitals this year kept their proposed budgets to within the two- and three-percent increase that aligns them with the two-year target.
“Our hospitals are not starting from a place of financial stability. In fiscal year ‘22, nine of our twelve hospitals operated at a loss, and these challenges remain in 2023."Mike Del Trecco, Vermont Association of Hospitals and Health Systems
But others, specifically the University of Vermont Health Network, are asking for increases way beyond what the Green Mountain Care Board set as a target.
The UVM Medical Center is asking for an almost 24% two-year increase, while Porter Medical Center in Middlebury, which is part of the UVM Health Network, is seeking a more than 28% increase.
“The UVM Medical Center, like hospitals nationwide, and local partners across Vermont, are confronting really difficult financial realities right now in health care,” said UVM Medical Center President and Chief Operating Officer Stephen Leffler. “Pharmaceutical costs are rapidly increasing. The wages that we need to pay our employees to have a stable workforce to compete with all the other people in our region has increased, putting huge pressure on our financial sustainability.”
Leffler spoke at a press conference Tuesday organized by the Vermont Association of Hospitals and Health Systems, which is trying to convince the Green Mountain Care Board that the budgets this year are “recovery budgets” that seek to address the intense financial pressures brought on by staffing shortages, inflation, and increased patient needs, the organization said.
Vermont Association of Hospitals and Health Systems CEO Mike Del Trecco said the hospitals have historically kept their margins below medical inflation, which he said was unsustainable in the long term.
“Our hospitals are not starting from a place of financial stability. In fiscal year ‘22, nine of our 12 hospitals operated at a loss, and these challenges remain in 2023,” Del Trecco said, adding that steep cuts to the proposed budgets would be “catastrophic” to the hospital community.
The Green Mountain Care Board will issue its final decisions on the proposed 2024 budgets before Sept. 15.
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