Green Mountain Care Board OKs health insurance rate increases it calls 'painfully high'

The Green Mountain Care Board approved increases in premiums for Blue Cross Blue Shield of Vermont and MVP Health Care it characterized as "painfully high," but necessary to ensure the continued solvency of BCBSVT.

The Care Board signed off on a 22.8% increase in premiums for BCBSVT for small groups and 19.8% for individuals. BCBSVT had asked for increases of 24% and 21% respectively. MVP received increases of 11.1% for small groups and 14.2% for individuals. MVP had asked for increases of 11.5% and 14.9% respectively.

Owen Foster, chair of the Green Mountain Care Board, said in a statement the increases represented "deep fundamental failures in our healthcare system and the immediate need for systemic change."

"While these rates are plainly unacceptable, the alternative of an insolvent insurer unable to pay for patient care was worse," Foster said. "Vermont must address its underlying healthcare cost structure, demographic and housing challenges, and transform its healthcare system if we are to alleviate the healthcare affordability crisis we are facing.”

BlueCross BlueShield of Vermont is behind on its reserve fund, threatening its solvency

BlueCross BlueShield of Vermont − the largest health insurer in Vermont with a 66% market share − is threatened with insolvency because of its declining reserves, according to the Vermont Department of Financial Regulation , which is responsible for ensuring the health insurer remains solvent.

More: BlueCross BlueShield of Vermont in financial crisis

The commissioner of DFR, Kevin Gaffney, is requiring BCBSVT to file a plan with his agency by early September, showing how they're going to "bolster their reserves and improve their solvency." The key element of that plan, articulated in a "solvency letter" Gaffney sent to Foster on July 12, is an additional 4% increase by BCBSVT in contributions to its reserve fund, which is why such large premium increases were required.

BCBSVT's reserve fund balance has declined by $47 million over the past two years, not including this year's results, according to Gaffney. The insurer had about $88 million in reserves at the end of 2023, and that number has continued to decline through 2024. The balance should have been close to $180 million at the end of 2023, according to BCBSVT.

Contact Dan D’Ambrosio at 660-1841 or ddambrosio@freepressmedia.com. Follow him on Twitter @DanDambrosioVT.

This article originally appeared on Burlington Free Press: Green Mountain Care Board OKs health insurance rate increases it calls 'painfully high'