The Green Mountain State has long prioritized consumer protection and quality care in its health policy. That’s resulted in much better, more comprehensive coverage — if you can afford the exorbitant insurance premiums. But increasingly few insurance companies even operate in Vermont, and its largest insurer is facing solvency concerns.
This week, Republican Gov. Phil Scott argued it’s time to reprioritize affordability, in part by loosening some of the rules the state once put in place to protect Vermonters.
“I think we're pricing ourselves out of the market completely,” he said at a Statehouse press conference Wednesday.
Vermont, for example, is one of only two states in the country that don’t allow health insurance companies to charge individuals more — or less — based on their age. Scott’s legislative proposal, H.585, would allow a modest age-rating in the individual and small group markets, among other deregulatory measures.
The administration has acknowledged the governor’s ideas may very well come with downsides. But they’ve argued that desperate times call for desperate measures.
“None of these changes are easy to swallow,” Department of Financial Regulation Commissioner Kaj Samsom said at the governor’s press conference. “There aren't a lot of win-win situations left.”
“None of these changes are easy to swallow. There aren't a lot of win-win situations left.”Vermont Department of Financial Regulation Commissioner Kaj Samsom
Vermonters between 25 and 34 years old make up a disproportionate share of the state’s uninsured population, according to a state survey. And administration officials argue that if insurers could coax them to enroll with better deals, that might benefit everyone. A larger and healthier risk pool, the theory goes, might allow insurers to give everyone a break on their premiums.
Vermont Health Advocate Mike Fisher told lawmakers this week he’d entertain the governor’s proposal if he thought it could meaningfully impact the makeup of the state’s insurance pool. But he argued the 5% price differential contemplated in the bill was unlikely to drive change, and he noted that a significant chunk of those who are uninsured are already eligible for Medicaid.
Similarly, Green Mountain Care Board chair Owen Foster, one of the state’s top health care regulators, said he liked Scott’s idea — in theory. But when Rep. Alyssa Black, the Democratic chair of the House Health Care Committee, asked him if the reform contemplated by the governor was enough of an incentive, Foster encouraged lawmakers to ask for hard numbers.
“That would be the caveat I have with this,” he said. “I don’t think I’ve seen or heard of any data suggesting that this will actually change the behavior.”
The governor’s proposal would also open the door to different kinds of insurance products, including association health plans, which have been effectively banned in Vermont since 2019. Such plans allow small businesses to band together to buy insurance, and are popular among conservative policy-makers and the business community.
But critics say association health plans segment the market, and draw healthier, younger people away from the individual and small group markets. Black wondered out loud during committee on Thursday whether the governor’s ideas weren’t “at complete odds” with one another.
“We know we want to grow the pool. We’ve got one, age-rating, which we think, ‘Oh, it’ll grow the pool.’ And then we’ve got association health plans followed up, which is going to shrink the pool,” she said.
Still, in an interview, Black said there were things she liked a lot about Scott’s multi-faceted proposal. For example, the governor’s bill would put gubernatorial appointees on the board of trustees of Blue Cross and Blue Shield of Vermont, the state’s largest insurer — and require the company to report information about executive compensation to the state.
A spokesperson for BCBS said that the insurance company would weigh in at a later date.
In general, Black stressed she was keeping an open mind.
“Everyone realizes what a crisis we're in,” she said. “We're looking at everything.”
