Judge health care policy by its results

COMMENTARY

BY KAJ SAMSOM As Vermont’s Commissioner of Financial Regulation, one of my responsibilities is to ensure our health insurance markets are working for the people they serve. That means asking a simple question: Are current policies producing the results Vermonters deserve?

Much of Vermont’s legal and regulatory approach to health insurance was developed over a decade ago, when policymakers were pursuing a very different vision for Vermont’s health care system. That effort was abandoned due to fiscal realities. A lot has changed since then, but our laws and regulations have not, and we find ourselves with some of the highest premiums in the country. Young adults are dropping coverage; small businesses struggle to offer health insurance plans and hospitals face growing financial pressures. These are not isolated problems. They are evidence of a market that needs thoughtful modernization.

That’s why Governor Scott recently signed an Executive Order to reform the policies that are not working, directing state agencies to act through existing authority, and where changes in law are needed, prepare legislative proposals for 2027.

Contrary to some early criticism, this initiative is not about weakening consumer protections or dismantling the Affordable Care Act. It is about bringing Vermont’s insurance marketplace closer to the mainstream.

Consider one example, Vermont is one of just two states that does not allow an insurer to offer lower premiums for younger buyers. This is called "age-rating" and 48 states do it within limits established under President Obama’s Affordable Care Act (ACA). The consequence of Vermont’s outlier status is that our youngest residents pay far more than their health care needs justify. At the same time, they are often at the beginning of their careers, earning lower wages, trying to buy their first home or start a family.

Not surprisingly, they are also the age group most likely to go without health insurance, an understandable decision when the cost is so out of touch with the value they receive from the insurance policy. That should concern all of us, because when younger, healthier Vermonters conclude coverage simply isn’t worth the cost, everyone loses and premiums increase.

That is why the Governor proposes moving carefully toward the approach already used by almost every other state, allowing premiums to vary with age. Those on Medicare are not impacted, and by implementing age-rating with the other reforms proposed in the Executive Order, we can mitigate the impact on our older buyers.

One of those reforms is pursuing federal funding opportunities available through a reinsurance program authorized by what’s called a 1332 Waiver. New Hampshire, Maine, and Rhode Island all have an approved reinsurance program that lowers premiums and brings federal "pass-through" funds to the state. This is not an experimental idea. It is one of the most widely used affordability tools available under the ACA.

The Governor also directs my department to rethink our regulatory approach to health insurance for small businesses and non-profits. Vermont employers have fewer choices than similarly situated businesses across the river in New Hampshire or Massachusetts. Small businesses should not be placed at a competitive disadvantage simply because of where they operate.

Modernizing rules governing association health plans, evaluating stop-loss regulations, moderate age rating and exploring targeted tax incentives can provide employers with more affordable options on and off the ACA exchange. Here again, by combining multiple reforms, we can support the resilience of the small group exchange market while also offering more choice for those seeking options off the exchange.

None of these ideas are unusual. In fact, they are remarkably ordinary. They are already being used successfully throughout New England and across most of the country.

Some have suggested these reforms are risky, they would prefer to continue tweaking the current policies rather than rethinking them. That has been the approach for decades and it is clearly failing. Health insurance costs are too high and rising for all Vermonters. By defending current policies and resisting reform, we must ask: what exactly are we protecting? Surely it is not the extraordinarily high prices or the lack of options?

Maintaining outdated policies is not a neutral decision. It is a decision to continue accepting a status quo where a young family in Brattleboro pays more than twice as much as a family living just across the Connecticut River for a comparable insurance plan. A system where young adults or small employers can’t see the value in insurance and opt out of the market entirely, and Vermont businesses are at a competitive disadvantage relative to those in other states.

Health insurance premiums ultimately reflect the underlying cost of health care itself. The Governor’s Executive Order recognizes that improving health care affordability requires attention to both sides of the equation, insurance markets and the cost of care. That is why the Administration has asked the Green Mountain Care Board to fully utilize its existing regulatory authority to produce savings that benefit all Vermonters — not just one insurance market or one group of policyholders.

As the Governor has often said, good public policy should be judged by the results it produces — not simply by the intentions that inspired it. Vermonters deserve access to affordable choices, stronger markets, and better opportunities for families, workers, entrepreneurs, non-profits and small businesses.

The Governor’s Executive Order is the beginning of a new, more honest conversation about what is working — and what is not.

That is the work this Administration has begun and that we believe Vermonters will welcome.

Kaj Samsom is the Commissioner of the Vermont Department of Financial Regulation. The opinions expressed by columnists and op-ed writers do not necessarily reflect the views of Vermont News & Media.