This data is quoted from HealthInsurance.org. It is part of a larger article that goes into fantastic detail about Vermont's system. You can read that article here.
Rate changes in Vermont: 2014 through 2020
In May 2019, Vermont regulators announced the proposed rate increases that the state’s two insurers had filed for 2020. Since Vermont’s individual and small group markets are merged, these proposed rate changes apply to both markets:
The Green Mountain Care Board is accepting public comments on the proposed rate changes through July 24, and will hold public hearings on July 22 and 23. Final approved rate changes will be announced by August 8, and it’s noteworthy that every year since 2014, the Green Mountain Care Board has approved rate changes that were smaller than the two insurers proposed.
As described below, Vermont’s insurers began adding the cost of cost-sharing reductions (CSR) to silver plan premiums as of 2019, rather than having to simply absorb the cost as they did for 2018. This resulted in larger premium subsidies in Vermont for 2019, making coverage more affordable than it would otherwise be for most people who get premium subsidies (79 percent of Vermont Health Connect’s individual market enrollees received premium subsidies in 2018, and the exchange noted that most uninsured Vermonters could qualify for free bronze plans in 2019 due to the size of the premium subsidies).
Vermont’s insurers will continue to add the cost of CSR to on-exchange silver plan rates for 2020. They are also offering “reflective” silver plans that can be purchased directly through the insurers, and that don’t include the cost of CSR added to the premiums. These reflective silver plans are very similar to the on-exchange silver plans in terms of coverage, but they’re a lower-priced option for people who want a silver plan but don’t qualify for premium subsidies.
For perspective, here’s a look back at rate changes in Vermont over the years.
- 2014: Rates in Vermont’s exchange were the fifth highest in the nation in 2014, due in part to the fact that Vermont has the second-oldest population in the country and utilizes community rating, with no variation in premiums based on age.
- 2015: For 2015 plans, the Green Mountain Care Board made reductions to the proposed rate increases for both of the state’s insurers. BCBSVT (which covered more than 90 percent of the exchange’s enrollees) had submitted 2015 rates with an average increase of 9.8 percent, and the board cut that down to 7.7 percent. MVP Health Care had proposed a rate increase of 15.3 percent, which was reduced to 10.9 percent during the review process. The weighted average rate increase for 2015 was about 7.8 percent, owing largely to BCBSVT’s significant market share.
- 2016: For 2016, Vermont regulators approved a 5.5 percent weighted average rate increase. The two exchange carriers submitted proposed 2016 rates with a weighted average rate increase of 7.75 percent (8.06 percent for the small group market), but regulators reduced the rate hikes before finalizing them.
- 2017: The proposed weighted average rate increase for the combined individual and small group markets in Vermont was initially 8.3 percent for 2017, but some new rates were later filed, public hearings were held, and state regulators ultimately approved lower-than-filed average rate increases for both carriers: For MVP, regulators approved a 3.7 percent average increase, and for BCBSVT, regulators approved a 7.3 percent average increase.
2018: For 2018, the Green Mountain Care Board (GMCB) announced approved rate changes for MVP and BCBSVT that were once again smaller than the insurers had proposed. MVP had proposed a 6.74 percent increase, but regulators approved an average increase of just 3.5 percent. BCBSVT had proposed an average rate increase of 12.69 percent, but the approved average increase was 9.2 percent. Across the full individual and small group market, the weighted average approved rate increase was just 8.47 percent, which was far smaller than other states saw for 2018.
For both insurers, the approved rates were based on the assumption that federal funding for cost-sharing reductions (CSR) would continue. But on October 12, 2018 (less than three weeks before the start of open enrollment) the Trump Administration announced that funding for cost-sharing reductions (CSR) would end immediately. Insurers in many states had already prepared for this eventuality in their rate filings, although some states scrambled in the subsequent days to revise rate filings to add the cost of CSR to 2018 premiums. Vermont, however, stuck with the rates that they approved in August — which were based on the assumption that the federal government would continue to fund CSR. But even if Vermont’s insurers had been allowed to add the cost of CSR to premiums for 2018, the impact would have been smaller than it was in most states. This is due in large part to the fact that the individual and small group risk pools are combined in the state, meaning that an increased cost situation that impacts rates for the individual market is spread across the small group market too, resulting in a more stable rate situation.
- 2019: Vermont insurers were allowed to start adding the cost of CSR to on-exchange silver plans for 2019, under the terms of S.19 (described below), and have created “reflective silver plans” (sold outside the exchange) that are slightly different from the on-exchange silver plans, and which do not have the cost of CSR added to their premiums. For 2019 plans, the Green Mountain Care Board once again approved rates that were lower than the insurers had proposed. The approved average rate increases were:
- MVP (25,223 members in the individual and small group market): 6.6 percent — but after accounting for the larger premium subsidies due to silver loading the cost of CSR, the average effective rate increase will be just 1.9 percent. MVP had proposed an average rate increase of 10.9 percent, with an effective average rate increase (after accounting for the larger premium subsidies) of 6.4 percent. But the average rate increase was reduced by the Green Mountain Care Board in August.
- BCBSVT (53,664 members in the individual and small group market): 5.8 percent — but after accounting for the larger premium subsidies due to silver loading the cost of CSR, the average effective rate increase was just 3.2 percent. BCBSVT had initially proposed an average increase 7.5 percent (with an effective rate hike of 5.3 percent after accounting for the larger subsidies), and had revised the rate filing in July 2018, requesting a 9.6 percent average increase. But in August, the Green Mountain Care Board approved an average rate increase of just 5.8 percent. Those are the overall average approved rate increases, but it’s worth noting that the average increases for silver plans are much more significant, due to the added cost to cover CSR. The filing for MVP noted that their silver plan rates would increase by between 25.3 and 30.7 percent. And BCBSVT’s filing called for an average increase of 16 percent on silver plan rates. That was before overall rates were adjusted downwards by the Green Mountain Care Board, but it’s indicative of how much larger the rate hike is on silver plans for 2019 (in most states, this large jump in silver plan rates happened in 2018). BCBSVT’s initial rate filing memo noted that the federal government’s proposal to expand access to Association Health Plans and short-term health insurance plans “could significantly disrupt the single risk pool,” but the insurer didn’t initially price that into the proposed 2019 rates, opting instead to assume that associated rate increases would be necessary for 2020 instead. BCBSVT revised their filing in July 2018, requesting a larger rate increase, primarily due to the fact that the Association Health Plan rules had been finalized by the Trump Administration after the initial rates were filed, and would allow healthy small groups to purchase non-QHP coverage via association health plans (thus harming the risk poor for ACA-compliant coverage). The approved rates for both BCBSVT and MVP allowed a 1.6 percent increase in premiums due to the elimination of the federal individual mandate penalty.