Photo: State health policy choices consistently weigh access and expanded benefits over affordability. Courtesy photo of UVM Medical Center.
Hospital-based care, pharma and state policy changes drive hikes
by Timothy McQuiston VermontBiz Vermonters are again facing steep 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 require rate increases of 16.3% for individual health plans and 19.1% for small-group plans for Vermonters covered by Vermont Health Connect. MVP Health Care is proposing an average increase of 11.7% for individual plan coverage and a 9.3% increase for small-group coverage.
The Green Mountain Care Board (gmcboard.vermont.gov), which regulates rates, typically reduces rate requests from those the insurers propose, often substantially. The board will take public comments through July 14 for MVP plans and July 15 for Blue Cross plans, and release its decision by Aug. 12. The new premium rates are effective between Jan. 1 and Dec. 31, 2025.
Latest available figures show Blue Cross Vermont, based in Berlin, enrolls slightly more than 45,000 members in the Vermont qualified health plan markets — 23,164 enrolled individually (either directly or through Vermont Health Connect) and 22,018 through small-group plans. MVP, based in Schenectady, New York, enrolls a bit over 10,600 Vermonters.
Blue Cross Vermont explained in a release that hospital costs comprise nearly two-thirds of its proposed rate increase. Growing utilization is contributing to higher hospital spending paired with recent price increases. 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 cost and utilization of brand and specialty drugs continue to grow precipitously against the cost of generics, Blue Cross said.
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 filing 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 co-pays in health benefit plans. When there are fixed member deductibles and co-pays, 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 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 Vermonters by offering innovative plans to individuals, older Vermonters and businesses. Its employees are dedicated to developing new ways to support high-quality care, programs and events that promote wellness.
To support great journalism, access our archives and get unique features like our award-winning profiles, Book of Lists & Business-to-Business Directory, subscribe HERE!
