GMCB cushions news of double-digit health insurance cost increase in Vermont

The Green Mountain Care Board announced a double-digit increase in the state’s small-group health insurance rate for 2020, but the board’s chair says he doesn’t expect the hikes to repeat.

The independent board charged with improving Vermont’s health system while stabilizing costs announced Aug. 8 that its decision regarding requested rate increases from Blue Cross and Blue Shield Vermont and MVP Health Care would be amended from their original filings.

BCBSVT was granted a 12.4 percent increase despite requesting a 14.3 percent to 14.5 percent average annual rate increase. MVP received a 10.1 percent increase after requesting a a 10.9 percent average annual rate increase. The rates affect insurance plans offered through Vermont Health Connect, the state’s health care exchange.

State of Vermont

GMCB Chair Kevin Mullin: “I don’t see these increases as something that we would expect to occur on a regular basis.”

Green Mountain Care Board Chair Kevin Mullin told TNR that the increases should not be taken to mean insurance costs are spiraling upward.

“The board is very frustrated about the unaffordable rate increases but it must adhere to the statutory obligations. …  But I don’t see these increases as something that we would expect to occur on a regular basis,” he said.

The main cost driver for Blue Cross was specialty drugs — it was 7.8 percent of Blue Cross’ increase.

“One of the things that happened with Blue Cross was the range was changed for the reserves and (this) increased it, but that won’t be in place next year. (Ideally) we would like to see the all-payer model of 3.5 percent, just like the overall economy,” Mullin said.

Mullin and his fellow board members continue to walk a fine line in trying to make health insurance affordable in Vermont. Expected increases in insurance business costs, which typically get passed along to consumers, are beyond the board’s reach.

“A double-digit increase just isn’t affordable to Vermonters, especially over a number of years,” Mullin said. “For example, last year it was 3.2 percent for Blue Cross, and MVP 1.9 percent. Yes, it’s bad news, but we hope it’s a blip. But there are no guarantees. Value-based medicine is the way to go, not the current fee-for-service model.”

When TNR asked Mullin about the realities of increasing business costs in the insurance industry and elsewhere, he didn’t express much empathy for Blue Cross or MVP with regard to operating expenses.

“Regarding the finances of the carriers (and the need to raise rates), the reality is that these carriers can do various things to … (curb) their costs,” he said. “If they’re not managing their expenses, they shouldn’t be rewarded (with such increases).”

He added that the increase requests are not a sign that the insurance companies are in any financial trouble.

Michael Bielawski/TNR

The Green Mountain Care Board announced an increase in Vermont’s small-group health insurance rate for 2020, despite the protests of local residents.

Jackie Lee, vice president of Lewis & Ellis, Inc., a Dallas, Texas-based actuarial firm, presented details at a GMCB hearing recently regarding MVP’s need to increase its rates.

“An actuary is in charge of determining what rates need to be in place for the benefits that are being sold (because) … a price has to be set,” she said. “What makes health insurance more complicated is that there are unknowns. We don’t know if an individual likes to go to the doctor every time they have a cough, or never go to the doctor at all, and we’re trying to pull all these unknown things together in order to set a rate. Our job then is to check MVP’s actuary work since the GMCB is not a board of actuaries — they hire us for this help. That’s our job and then we provide an opinion to the board.”

Lee said that while Lewis & Ellis reviewed MVP’s profitability and financial solvency, federal and state regulations prevent the firm from getting too involved within the area of insurance financials.

While MVP first proposed a 9.4 percent increase, Lee noted that Lewis & Ellis recommended a 10.8 percent increase, which is higher.  Lee said her firm’s advice to increase the MVP rate was due to the firm’s risk adjustment under Obamacare, which states that pre-existing health problems can no longer be factored into the actuarials.

However, Lee isn’t critical of the Affordable Care Act.

“Medical inflation is always higher than general inflation,” she said. “So the Affordable Care Act is moving us in the right direction, but it’s not perfect. It is stabilizing in environments where things weren’t stable before. But I expect something similar for Vermont next year.

“(Under Obamacare) insurers got a tax break for the past two years, but now the tax came back. It doesn’t sound fair (to them), but the fact remains that these insurers did get a tax break for two years.”

John McClaughry, vice president of the Ethan Allen Institute, is a critic of the Green Mountain Care Board and state-sanctioned health-care regulators. He told True North that Vermonters would “be amazed” at the bureaucratic process for government rate setting.

“The Green Mountain Care Board decides insurer rate requests under its rule 2.401: ‘Determin(ing) whether the requested rate is affordable, promotes quality care, promotes access to health care, protects insurer solvency, is not unjust, unfair, inequitable, misleading, or contrary to law, and is not excessive, inadequate, or unfairly discriminatory,’ in light of etc.,” McClaughry said. “Now how could that possibly pose any problem for the five appointed board members? All they have to do is place the insurer’s request alongside each of those 12 criteria, and out comes the correct answer.”

Lou Varricchio is a freelance reporter for True North Reports. Send him news tips at

Images courtesy of State of Vermont and Michael Bielawski/TNR

6 thoughts on “GMCB cushions news of double-digit health insurance cost increase in Vermont

  1. There’s always some plausible explanation but the bottom line is always the same the rates go up not down and they go up in enormous proportions over and above what the cost of living increases are and seniors just have to bite the bullet go broke go without medicines and treatment or die and this is all on the Green Mountain care board clearly is not regulating anything

  2. Has the GMCB or anyone else asked for information about salaries for the medical centers CEO’s, the salaries for all administrators an carefully look at the total cost of administration? If I’m not mistaken UVM Medical Center and the few others left in Vermont never seem to cut administration or their salaries. They control salaries and numbers of nurses, doctors and staf, while keeping their golden salaries intact.

    Instead of the GMCB handing out wholesale increases like candy they should make UVM and others get a grip on highly paid administration positions.

    UVM creating a healthcare monopoly in this state will not end well. the State should be concerned on how many hospitals etc. are being taken over by UVM.

    • “It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.” ~ Thomas Sowell

  3. Now the hospitals are requesting higher than inflation rate hikes. The GMCB will allow these rate hikes for the same reason they allowed the insurance rate hikes. Next year the insurance s will request additional rate hikes because hospital rates are up. The all payer model will not keep rate increases down to 3.5% in the future. The all payer model is just an experiment that will fail just like all the other Vermont government solutions to high cost health care. Look at any crowd of people and you will see that people are not making healthy choices. The NMC decreased emergency room visits and added more primary physicians and now they are having financial problems just like other hospitals that tried to honor the GMCB’s suggestions to reduce costs. The GMCB has failed in it’s mission and should be abolished.D

  4. “Green Mountain Care Board Chair Kevin Mullin told TNR that the increases should not be taken to mean insurance costs are spiraling upward.”

    Horse***t. There will be another implausable explanation next time also – which is the reason for the double-digits…to delay the next one and there will be many more.

    These ‘boards’ do not exist to protect us…just as PSB allows all projects even allowing them to greatly exceed costs, clearly are there to aid and abet profits and limit regulation of what they’re supposed to be ‘regulating’…think UVMMC.

    Head of PSD in VT was caught assisting GMP raising rates as reported by whistleblowers…and Benedict Scott expressed ‘full confidence’ in dept head as rate change smoothsailed into our wallets…what does this tell us…cha-ching is just another cost of doing business in our one-party rule state. Real fear is a run for the door…and that is ALL.

    • You are absolutely right! It is unadulterated BS! Until Trump came into office, this crap was being fed to the entire country 24/7. The only reason Vermonters are still wading through the swamp is because there aren’t enough woke(: people left in the state to kick these people out!

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