Middle-aged Vermonters pay higher prices than 13 other states for health insurance through the state’s online marketplace, and the prices will continue to go up if state regulators approve new rate hikes proposed by insurers.
A new analysis from the Kaiser Family Foundation says that, before receiving subsidies, Vermonters age 40 paid $465 per month for the lowest-cost silver health insurance plan through Vermont Health Connect in 2016.
The study uses the prices in major cities to estimate how much people in each state pay. Burlington is the major city used for Vermont, but all residents pay the same prices. The study does not include state subsidies for premiums.
By comparison, four cities in New York had an average monthly price of $366 for the lowest-cost silver plan in 2016; two cities in Connecticut paid $316; Portland, Oregon paid $240; and Washington, D.C. paid $228.
The average rate calculated by Kaiser was $277 per month for a 40-year-old, or about 60 percent of what Vermonters pay.
“Vermont is a little unusual among the states,” said Cynthia Cox, associate director of health reform for the Kaiser Family Foundation. “New York is the other state where everyone is charged the same premium regardless of how old they are, and what that means is people who are younger will pay more than they otherwise would. “
“If I made the same chart for, say, a 64-year-old, then Vermont would look really cheap,” Cox said. “But if there were no subsidies in this market, then I think you would see fewer young people in Vermont signing up for coverage, which would cause premiums to increase more.”
Vermont has two health insurers on the exchange Blue Cross Blue Shield of Vermont and MVP Health Care. Blue Cross has asked regulators to increase premiums by an average of 8.2 percent in 2017; MVP has asked to increase by an average of 8.8 percent. Hearings on the matter are scheduled in July.
The Kaiser analysis projects that the price of the lowest-cost silver plan for a 40-year-old could increase to $482 in 2017 if regulators approve the requested rates. Across the 14 cities studied, insurers requested to raise rates for silver plans by 11 percent to an average of $307 or 64 percent of what Vermonters could pay.
Cory Gustafson is the spokesperson for Blue Cross, which controls 90 percent of the Vermont Health Connect market. He said insurance rates increase in response to three factors: more hospital stays and visits to doctors’ offices; higher prices for medical care and prescription drugs; and the so-called “cost shift” in which commercial insurance premiums subsidize low reimbursements payments from Medicare and Medicaid for doctors and hospitals.
In Vermont, about two-thirds of individual customers receive assistance from the federal government, or from two types of subsidies that the state funds through its umbrella Medicaid budget. The other one-third of individual customers who make about $47,000 or more per year must pay the full amount of the premium.
Additionally, small businesses with 100 or fewer full-time employees are required to pay for a portion of employees’ health insurance through Vermont Health Connect. The rest of the unsubsidized premium comes directly out of employees’ paychecks.
Date: June 15, 2016