State sets health insurance rates
By Bob Kinzel
Vermont Public Radio | July 09,2013
For the first time, the Green Mountain Care Board has set rates for Vermont’s new health care exchange. In doing so the board stressed that the rates will remain close to current levels.
Board Chairwoman Anya Rader Wallack said the proposed rates for Blue Cross Blue Shield were reduced by just more than 4 percent. The board cut the rates proposed by MVP by roughly 5 percent.
Rader Wallack says a benchmark single person “Silver” plan offered by Blue Cross will cost about $4,700 per year, but she says federal subsidies could substantially reduce the premium for individuals who make less than $45,000 a year, or for couples who make less than $60,000.
“Hopefully through the reductions that we’ve ordered and more significantly the tax credits that will come to Vermonters through the exchange both from the federal government and state government, the premiums will be more affordable,” said Rader Wallack.
She said the board reduced the proposed rates because it found that both companies wanted to put too much money into their reserve accounts and also because the insurers projected higher use of the system by those enrolled in the exchange.
Beginning in January, all individuals and businesses with fewer than 50 employees will be required to obtain insurance through the exchange, known as Vermont Health Connect.
Rader Wallack doesn’t think consumers will experience rate shock when the change occurs.
There’s a wider range in today’s market of both products and prices,” said Rader Wallack. “But the level of premiums for roughly equivalent coverage to what will be offered through the Exchange is comparable.”
Blue Cross Vice President Kevin Goddard said he was disappointed by the rate reduction but he says Blue Cross is ready to move on.
“This is their judgment. Our judgment would be that we need a couple of points higher than that to have adequate rates,” said Goddard. “But at the end of the day, frankly after all the work, we’re just looking forward to getting on now with the transition of thousands of thousands of people into this new way of purchasing health insurance.”
Currently, Blue Cross and MVP are the only two companies offering insurance products through the exchange.
An application by a third group, the Vermont Health CO-OP, was initially rejected by state regulators but the CO-OP is hoping that the state will reconsider their application based on new information.