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The home for VPR's coverage of health and health industry issues affecting the state of Vermont.

Health Exchange Policies Headed For 9.8 Percent Spike In 2015

Many of the small businesses and individuals now required to purchase their health insurance on a new online “exchange” will see their premiums spike by an average of 9.8 percent next year, according to projections unveiled today by Blue Cross Blue Shield of Vermont.

Close to 90,000 Vermonters now get their insurance through policies sold at Vermont Health Connect, a federally mandated website that offers plans that meet minimum benefit standards. Nearly two-thirds of those Vermonters are covered by policies sold by Blue Cross Blue Shield. And in a rate filing submitted to state regulators Monday, Blue Cross sought average rate increases of nearly 10 percent.

Increases for individual policies will range from 4.8 percent to 11.8 percent.

Kevin Goddard, vice-president of external affairs for Blue Cross, attributed the increases in part to the rising costs of medical services, as well as state and federal health care reform mandates. He said the phase-out of a federal subsidy designed to keep exchange premiums more affordable is also leading to higher costs in 2015.

“Almost two-thirds of the filing really includes increases that are attributable to things going on in the Affordable Care Act and to a lesser extent some of the special benefit designs of the Vermont products,” Goddard said.

Blue Cross is the dominant insurer selling policies on the Vermont exchange. As of 5:30 pm Monday evening, MVP, the other insurer, had yet to respond to inquiries about rate increases it anticipates in 2015. Rate filings were due to the Green Mountain Care Board by the end of the business day Monday.

Health care advocates had already questioned the affordability of plans being sold on the exchange. Goddard said Blue Cross appreciates the financial duress that a 9.8 percent cost increase will present to some of its customers.

But he said that the nonprofit insurer has kept administrative costs to a minimum. Goddard added that but for state and federal mandates, which include an increase in insurer fees, Blue Cross would have sought a rate increase of only 3.3 percent.

“We do recognize that a nearly 10-percent increase in health care costs will be difficult and disappointing for small businesses and individuals that need to purchase it,” Goddard said.

Betsy Bishop, executive director of the Vermont Chamber of Commerce, said the rate increase will be difficult for small businesses which had been told that the exchange was part of reform package aimed at cost-containment.

“So hearing that we’re going to have a10-percent rate increase is going to be diff for businesses to absorb,” Bishop said. “Whether they’re sharing that with their employees or not, it’s going to be that much of an added expense on whoever’s paying that bill.”

VPR News will have more on this story Tuesday.

The Vermont Statehouse is often called the people’s house. I am your eyes and ears there. I keep a close eye on how legislation could affect your life; I also regularly speak to the people who write that legislation.
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