Come November, when more than 70,000 Vermonters are expected to get health insurance through the state marketplace, they’ll find the sticker prices for those plans are a lot more expensive.
Premiums are going up by double digits, for the third year in a row — between 14 and 20% for MVP Health Plan and BlueCross BlueShield of Vermont.
That’s a lot higher than in most other states: Most proposed premium changes for next year are around 7%, following a 6% increase last year, according to the health care research and news organization, KFF.
For most people who buy health insurance directly, not through an employer, increased federal subsidies available next year should keep prices in check.
“People are going to have to pay less premiums, and in many cases, people are going to be able to get into a richer plan, with lower out-of-pocket costs,” said Mike Fisher, the state’s healthcare advocate, speaking on Vermont Edition Monday.
“It is a bright spot — despite the very high rates, we think that many Vermonters are going to be experiencing lower costs,” he added.
But for small businesses who get insurance through the state marketplace, there are no subsidies. Rates for those buyers are up from 11 to 23%.
“That's the group that I'm most worried about, and I really think it is in enough trouble that it should keep policymakers awake at night,” Fisher said. “It puts a real drag on our small business economy.”
Insurance companies have said they need these large rate increases because they’re paying a lot more to cover health care costs and could go bankrupt otherwise. For example, BlueCross BlueShield of Vermont paid out about $288 million in claims in 2022. That jumped to $381 million in 2023, according to Owen Foster, the chair of the Green Mountain Care Board.
“That's a 32% increase in the dollar amount of claims they paid,” he said. “When you pay out more in claims, you need to bring in more money so you can pay those claims.”
He said the price of drugs and hospital services are big factors driving those increased costs. That’s hitting Vermont particularly hard because of a lack of primary care, mental health care, home health and long term care, according to Foster.
“When we don’t have those services in adequate supply — and we do not — it backs up in hospitals, and makes care more expensive,” he said.
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There's also a demographic piece: Medicare, which covers people 65 and older, is reimbursing hospitals by about 3% more next year, while Medicaid, which covers people who are low income, is not increasing reimbursement rates at all. That leaves people with commercial insurance to bear the brunt of rising costs, Foster said.
"That number of people, the people paying that commercial, is going down smaller and smaller every year, which makes the rates even higher."
Broadcast live on Monday, August 19, 2024, at noon; rebroadcast at 7 p.m.
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