Vermont’s top health care regulator ordered health insurers selling plans on the state’s Affordable Care Act marketplace to keep their premium price increases for next year much lower than the companies proposed in May.
On Friday, the Green Mountain Care Board released its final decision on the percentage increase that it would allow. The order impacts so-called Qualified Health Plans sold on Vermont Health Connect to both individuals and small groups. The regulatory board reviews proposed price increases for these plans annually.
This year, Blue Cross Blue Shield of Vermont, which is one of only two insurers that sells plans on Vermont Health Connect, initially requested a 23.5% increase in rates for the individual insurance market and a 13.5% increase for its small group market plans. The care board ultimately approved a 9.6% and 4.4% increase, respectively.
MVP Health Plan Inc., the other insurer selling plans on Vermont’s marketplace, initially requested a 6.2% increase for its individual market plans and an increase of 7.5% for its small group plans. Again, the care board approved rate increases that are far lower than those requested: 1.3% for individual plans and 2.5% for the small group plans.
The decision comes as Vermonters face higher insurance premiums than do residents of any other state and as Blue Cross Blue Shield of Vermont risks insolvency.
The board-approved rates aim to balance keeping costs as low as possible for Vermonters, while also keeping the state’s largest insurer afloat, said Green Mountain Care Board chair Owen Foster during a Monday press briefing. https://datawrapper.dwcdn.net/9kyHA/2/https://datawrapper.dwcdn.net/TTOXA/1/
“Blue Cross remains in a difficult position financially, but so too do Vermonters. The board’s responsibility is to balance those competing interests,” Foster said. “At the end of the day, we concluded that allowing these giant rate increases would be very detrimental to people’s ability to access care and that the status quo of double-digit rate increases was not acceptable.”
Whether these lower rates will be adequate to cover the cost of Blue Cross Blue Shield of Vermont’s claims in 2026 remains to be seen, said Andrew Garland, a vice president and spokesperson for the insurer. That depends on the board’s review of hospital budgets — also done annually — and the subsequent price negotiations between hospitals and insurers, he added
However, Garland remained optimistic: “A lot has changed since we filed these rates back in early May.”
Namely, in June Gov. Phil Scott signed a new law that will cap how much certain hospitals can bill in 2026 for outpatient pharmaceutical drugs, like IVs or certain cancer treatments. Garland said Blue Cross Blue Shield expects that law to save its members “many millions of dollars.”
Additionally, Blue Cross Blue Shield plans to receive a larger risk-transfer payment from MVP than it had originally estimated, Garland said. To protect from insurers marketing plans only to healthy, low-cost patients, the Affordable Care Act stipulates that plans with lower-risk patients must redistribute funds to plans with higher-risk patients. For 2024, MVP had a larger portion of low-risk enrollees and thus will pay Blue Cross Blue Shield as part of this risk-transfer balance, which also helps mitigate some of the insurer’s concerns for the lower rate increases, he explained.
The regulatory board also sets how much each of the 14 hospitals it regulates can increase charges to insurers every year. Those hospitals were put on notice that their guideline for increases in prices for 2026 was just a 3% increase, though final decisions for each hospital are not expected until mid-September.
At the same time, insurers are also bracing for a massive loss in marketplace customers due to the likely end of the Covid-19-era expanded federal insurance subsidies next year. Blue Cross Blue Shield estimates that 12.6% of its members on individual marketplace plans will drop their coverage. Those left on such plans, the insurer projects, will be the people who need and use it the most, meaning they expect an overall increase in costs.
Board chair Foster added that Friday’s decision puts Vermont’s rate increases in line or lower than what many other states have approved or are expected to approve for next year’s marketplace premiums — about 15% on average. All across the country, individuals and insurers are likely to face this same loss of federal subsidies.
MVP spokesperson Michelle Golden said Monday in an emailed statement that the board’s new rates “are a testament to collective efforts to responsibly manage costs while also ensuring access, high quality care, continued innovation, and overall community well-being.”
During the Monday briefing, Foster said insurers often reported feeling powerless to negotiate with hospitals on fair rates. Recently the state’s Department of Financial Regulation weighed in to strengthen insurers’ stance in such negotiations, saying it will not approve any plans that do not protect the insurance companies’ solvency.
Insurers can appeal the board’s decisions within 30 days, Foster said, though they have not confirmed any interest in doing so.
This story was republished with permission from VtDigger, which offers its reporting at no cost to local news organizations through its Community News Sharing Project. To learn more, visit vtdigger.org/community-news-sharing-project.
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