Hospital-based care, drugs, and state policy changes drive premiums
Vermont Business Magazine Vermonters are again facing steep upward premium growth for 2025 due to the cumulative impact of hospital costs, drug prices and state health care policy choices. Blue Cross and Blue Shield of Vermont projects that these trends will continue and will require rate increases of 16.3% for individual health plans and 19.1% for the small group health plans to pay for the cost of the care for Vermonters covered by Vermont Health Connect. MVP in the small group is proposing a 9.3% increase and in the individual plans, MVP has proposed an average increase of 11.7%.
The Green Mountain Care Board, which regulates rates, typically reduces rate requests from those the insurers propose, often substantially. The GMCB will release their decisions by August 12. The GMCB takes public comment through July 14 (MVP) and July 15 (Blue Cross). See links below.
The premium rates are effective between January 1, 2025 and December 31, 2025.
The proposed average rate increase (MVP’s revenue increase) is 9.3% in the small group, with increases ranging from 5.2% to 11.7%. MVP covers 15,027 members, based on February 2024 membership.
The proposed average rate increase (MVP’s revenue increase) for individual plans is 11.7%, with increases ranging from 2.7% to 34.3%. MVP covers 10,616 members, based on February 2024 membership. MVP is based in Schenectady, NY.
As of March 2024, Blue Cross VT had 45,182 members enrolled in the Vermont QHP markets, with 23,164 enrolled individually through Vermont Health Connect or directly through Blue Cross VT and 22,018 small group employees and their dependents.
Blue Cross Vermont, based in Berlin, explained in a press release that hospital costs comprise nearly two-thirds of the rate increase. Growing utilization is contributing to higher hospital spending paired with recent price increases. More Vermonters are accessing hospital care, and the increasing utilization is both indicative of efforts to lessen wait times and the more intensive needs of an older population.
Almost half of all premiums are spent on hospital-based health care services – inpatient and outpatient procedures, including surgeries and diagnostic services, in-facility drug treatment, laboratory tests, advanced imaging, specialist consults, medical equipment, and office visits —both in person and through telemedicine.
Double-digit retail pharmaceutical trends also contribute to the higher premiums for 2025. In particular, the exponential growth in drug treatments for diabetes and weight loss are adding substantial pressure to premiums. GLP-1 drugs are life-altering medications for managing these difficult chronic conditions, but the drugs are incredibly expensive, and the number of prescriptions has expanded dramatically in recent years.
The cumulative impact of state health policy choices that consistently weigh access and expanded benefits over affordability are the third lever that is contributing to the high premium increases in 2025, Blue Cross said. The decision to amplify the effects of Silver Loading will result in shifting to much higher premiums for On-Exchange Silver plans in order to draw down additional federal Advanced Premium Tax Credits to qualifying Vermont individuals and families.
MVP added in its filling that: "In addition to the medical cost inflation rate assumed from the historical experience period to the rating period, an
adjustment is needed to reflect the impact of cost share leveraging on the carrier’s share of the medical cost. Leveraging is a result of the fixed nature of deductibles and copays in health benefit plans. When there are fixed member deductibles and copays, the carrier bears a greater portion of the cost of medical inflation. Therefore, an additional factor adjustment is made to the trend assumption to capture this cost."
Blue Cross and Blue Shield of Vermont is the state’s only local, nonprofit health plan. For over 40 years, the company has been enhancing the health and well-being of the Vermonters we serve by offering innovative plans to individuals, older Vermonters, and businesses. Our employees are dedicated to developing new ways to support high-quality care, programs, and events that promote wellness.
BCBSVT Rate Review Open For Review
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Blue Cross Blue Shield of Vermont - 2025 Individual Filing
Filing Status
Pending Review
Decision Date
Monday, August 12, 2024
- Actuarial Memorandum (5/13)
Date Comments Close
Monday, July 15, 2024
Blue Cross Blue Shield of Vermont - 2025 Small Group Filing
Filing Status
Pending Review
Decision Date
Monday, August 12, 2024
Docket No.: GMCB-003-24rr
SERFF: BCVT-134096633
Date Posted to Web: May 14, 2024
Last Updated: May 14, 2024
- Actuarial Memorandum (5/13)
Date Comments Close
Monday, July 15, 2024
Blue Cross Blue Shield of Vermont Large Group Filing
Filing Status
Pending Review
Decision Date
Thursday, May 9, 2024
On February 9, 2024, Blue Cross Blue Shield of Vermont submitted a consolidated Large Group Rating Program Filing. This filing establishes the formula, manual rate, and accompanying factors that they will use for renewals beginning upon approval of this filing, most notably January 2025 renewals. The overall indicated change requested is 8.4%.
Docket No.: GMCB-001-24rr
SERFF: BCVT-133971481 as of March 7, 2024
Date Comments Close
Wednesday, April 24, 2024
MVP Rate Review Open For Review
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MVP Health Care - 2025 Small Group Filing
Filing Status
Pending Review
Decision Date
Monday, August 12, 2024
- Actuarial Memorandum (5/13)
Date Comments Close
Sunday, July 14, 2024
MVP Health Care - 2025 Individual Filing
Filing Status
Pending Review
Decision Date
Monday, August 12, 2024
- Actuarial Memorandum (5/13)
Date Comments Close
Sunday, July 14, 2024
Source: 5.13.2024. Blue Cross and Blue Shield of Vermont www.bluecrossvt.org. MVP Health Care. www.mvphealthcare.com. The Green Mountain Care Board. ratereview.vermont.gov
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