Vermont Facing Obamacare Premium Hikes While It Preps For Single-Payer

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Some customers using Vermont’s Obamacare exchange will see premium prices rise by as much as 10 percent, according to the state exchange board.

Vermont’s state exchange has only two insurance companies offering plans. Blue Cross Blue Shield requested an average 9.8 percent increase for 2015 Obamacare exchange plans; the Green Mountain Care Board approved a 7.7 percent increase instead. MVP Health requested a whopping 15.3 percent average hike and was allowed a 10.9 percent boost instead. (RELATED: Now Even More States Report Double-Digit Premium Hikes)

“While we agree with the insurers that the rates are significantly impacted by changes in federal law and we believe we exercised our regulatory authority as intended, we are not satisfied that our work is even close to done,” said exchange board chair Al Gobeille. “The trajectory of [Vermont Health Connect] insurance rates confirms the sense of urgency we feel to collaborate with payers and medical providers to build a payment and delivery system that is more efficient, more effective, and more affordable.”

State regulators have been ordering insurance companies participating in Obamacare exchanges to lower their premium hikes all across the country. Vermont is no different. In the rate decisions that the exchange board released Tuesday, regulators forced Blue Cross Blue Shield and MVP Health to lower their cost estimates, whether for their own administrative costs or for projected increases in health care and pharmacy costs.

MVP vice president Pete Lopatka’s testimony to the exchange board that the reason health care costs are rising are out of insurance companies’ control. Lopatka noted that it’s already been cutting administrative costs for years and even laid off 100 full-time employees in an effort to cut costs and become more efficient.

“The primary major issue” that’s sparking rising health care costs is “the cost of hospital services, physician services and prescription drugs,” Lopatka told the board.

Vermont has just two insurance companies, both nonprofit, operating on its exchange. The state is working to opt out of Obamacare in 2017 and create a statewide single-payer health care system.

The state-run Obamacare exchange, like many others, has been struggling with security weaknesses and technological glitches since its launch last year. In August Vermont fired CGI Federal, which also built, in favor of Optum, a UnitedHealthGroup subsidiary which has also taken over the reins at the federal Obamacare website.

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Sarah Hurtubise