GMCB cuts Blue Cross rate request by one-third

MONTPELIER — The Green Mountain Care Board has rejected Blue Cross Blue Shield of Vermont’s 12.7 percent requested rate increase, imposing a smaller increase of 9.2 percent.

The board, the state’s health care regulatory body that oversees insurance rates and hospital budgets, announced the rate approval Thursday. BCBSVT requested the 12.7 percent increase, citing rising medical and pharmaceutical costs, increased utilization of medical services, an aging population and mandated changes to federal law as, the reasons behind the rate hike.

After an analysis of the review, however, the board unanimously approved a lower rate increase for 2018 plans sold by BCBSVT on the state’s health insurance exchange.

“As we issue our decision today, we are mindful of the uncertainties surrounding provisions of the Affordable Care Act, and the difficulties that many Vermonters —particularly those who do not qualify for premium assistance or cost-sharing reductions — face as health insurance premiums continue to rise faster than other economic indicators,” the board wrote in its order.

The 9.2 percent approved increase represents an average among the plans offered by BCBSVT. Customers may see higher or lower increases in their premiums depending on the plan they enroll in.

Sara Teachout, the director of government, public and media relations for BCBSVT, said the company said the insurer has concerns with the approved rate.

“We accept the decision made by the GMCB and we really appreciate the process that was used,” she said. “We’re concerned that the 9.2 percent request may not be sufficient to handle the health care needs of our customers.”

Teachout said the rates are based on projections about the cost of members’ future health care services. If the rates approved by the board are not enough to cover those costs the company would have to dip into its reserves.

“If these rates are not sufficient to pay for the cost of health care it just worsens our funding problem in future years,” Teachout said. “Underfunding rates doesn’t lower the cost of health care services.”

BCBSVT does have options to appeal, which include filing a motion to reconsider, Teachout said. However, no decisions have been made, she said.

“I think it’s too soon for me to say what we’ll do. We’re reviewing it internally,” Teachout said. “We’ve never done it in the past.”

Thursday’s board-approved rate for BCBSVT follows a Wednesday decision on the state’s second insurance carrier on Vermont Health Connect. MVP Health Care sought a 6.7 increase but the board approved a 3.5 percent increase.

BCBSVT insures about 70,000 Vermonters, while MVP covers about 10,000.

Both insurers filed their requested rate increases on May 12. The requests were then reviewed by the board during a 90-day technical review that included public hearings. The review included a presentation by the office of the Health Care Advocate, which used its own actuary to argue that the BCBSVT rate should only be increased by 8.7 percent.

BCBSVT officials pushed back strongly, which the board noted in its order.

“[W]hile we do not reject the HCA’s arguments out of hand as suggested by BCBSVT — whose critique of the HCA’s actuary is more inflammatory than probative — we conclude that the HCA’s actuarial report and testimony at hearing fail to raise any credible rationale for implementing the proposed changes to the filing,” the board wrote.

The board noted in its order the difficulty of finding a balance between keeping rates low for consumers and ensuring that the insurers on the state’s exchange remain solvent and willing to participate in the marketplace.

“On the one hand, there is an undeniable need for health insurance coverage that is affordable for all Vermonters. On the other, we cannot reasonably expect our insurers to continue to voluntarily participate in the health benefit exchange if it imperils their financial stability,” the order reads.

GMCB Chairman Kevin Mullin noted that other states have faced an exodus of insurers from their own marketplaces.

“This year’s proposed rate increase was the largest rate request by Blue Cross Blue Shield of Vermont and the Board faced a difficult task in balancing our different regulatory responsibilities,” Mullin said in a statement. “We are seeing states like Indiana and Wisconsin with areas that will not have any coverage, and a state like Nevada facing the possibility of not having a single option for health insurance on the exchange. We heard from over 500 Vermonters and the Board worked hard to find areas of savings for Vermonters while recognizing the need to make sure Blue Cross Blue Shield of Vermont maintained its solvency and stability.”

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