Modest rate increases set for 2027 health insurance plans

GREEN MOUNTAIN CARE BOARD

BY OLIVIA G IEGER VTDigger

Individuals and small businesses that buy health insurance on the state marketplace will see their premiums rise between 1% to 6% next year.

The Green Mountain Care Board, Vermont’s independent health care regulator, set rate increases late Monday night for coverage sold on Vermont Health Connect, the state’s Afford-able Care Act marketplace. Each summer the board issues binding orders for how much the insurers can raise those plans’ premiums.

BlueCross BlueShield of Vermont and MVP Health Care are the only two insurers that sell health insurance plans on Vermont Health Connect. Employers with no more than 100 workers can buy small group plans on the marketplace, and individuals can buy coverage directly.

On Monday, the care board said that in 2027, it expects BlueCross BlueShield of Vermont’s individual plans to increase 2.2%, and its small group plans to increase 1.2%. MVP’s individual plans are set to increase 3.9%, and its small group plans are expected to go up 6.2% All four increases are less than what the insurers had originally asked regulators for.

Kaj Samsom, the commissioner of the Department of Financial Regulation, which regulates insurers, said that both the requested and granted rates "really reflect the progress that the regulated hospitals, the care board, insurers and the legislature" have made on affordability.

Still, those increases are on top of already high premiums. Since 2021, Vermont’s premium increases for individual plans have compounded to be 74.6% more expensive than they were four years ago. The small group plans’ prices have gone up 51.5% in the same amount of time, according to the office of the Health Care Advocate.

In 2026, Vermont had some of the highest premiums in the nation for plans bought on the Affordable Care Act marketplace, according to health policy group KFF. The loss of some federal tax credits has made the ACA plans even harder to afford for some Vermonters.

Nationwide, the loss of those credits, the increasing cost of healthcare and the decreasing size of insurance pools have caused other states to catch up to Vermont. An August KFF study of preliminary rate filings across the U.S. found that most small group market insurers are increasing rates 10%-20% above last year’s rate.

The increased cost and use of pharmaceutical drugs, especially weight loss drugs, were a "primary driver" of both MVP’s and BlueCross Blue-Shield’s rate increase, according to the care board’s decision. In its decision, the board noted that BlueCross had removed some brand-name drugs from its coverage and instead replaced them with less expensive alternatives, bringing rates down.

Both insurers’ rate increases account for a small percentage of premium dollars to go towards the administrative costs of running an insurance company — both of which were at levels lower than most insurers in the country, the care board’s actuaries noted.

Still, hospital costs are the largest share of what premium dollars go towards.

As such, the care board issued two additional orders on the insurers, aimed at bringing down the price they pay for care. First the board requires the two insurers to prepare for a 2025 law that aligns hospital charges with a percentage of Medicare. They also order insurers to review what they pay to non-Vermont hospitals and whether they align with the state’s affordability objectives.

In a first for him, care board chair Owen Foster dissented from the decision of the other four board members, arguing that it allows the insurer to unfairly move more Vermont dollars to out-of-state hospitals. He recused himself from the BlueCross BlueShield decision, citing personal reasons.

The board noted that while MVP expects payments to Vermont hospitals to decrease, the insurer predicts an increase in what it pays for care not regulated by the board (meaning non-hospitals and out of state hospitals). The board authors lightly pushed MVP to be "more effective" at limiting what it pays out-of-state hospitals.

Foster took this a step further than his board colleagues in his dissent. He said that allowing a decrease in overall payments to Vermont hospitals while allowing an increase for non-Vermont hospitals "misreads" the board’s duty and "takes precious Vermont healthcare dollars from Vermonters and Vermont providers, moves them out of state and favors large out-of-state hospitals." He called the move "irrational."

Samsom caveated that the decreases to in-state payments represents some Vermont hospital costs coming down from dollar figures that were already "demonstrably high — and in some areas, offensive — costs," while the out-of-state increase is a more steady trend. As a result of legislative work and the care board’s actions, Vermont’s hospital charges are "finally being tackled" and coming down, he added.

Last year, the Green Mountain Care Board set the lowest premium increases that Vermont’s ACA insurers had seen in years after a series of legislative actions that were expected to measurably reduce the cost of care that insurers needed to pay out.

BlueCross BlueShield has also tried to strike this balance. For years, the insurer struggled to remain solvent and relied on a $30 million loan from its affiliate in Michigan. Just last year, the insurer began to build back its reserves and repaid that loan.

Still, BlueCross BlueShield asked the care board to keep in mind the continuing need to rebuild its reserves, which also accounted for part of its requested premium increase.

In comments to VTDigger on Tuesday, BlueCross BlueShield said it appreciates how the board has tried to strike this balance between affordability and meeting the "true cost of care" that the insurer needs to pay out to Vermont’s hospitals.

"While these approved rates represent the lowest premium increase (to BlueCross) in five years, they are still an increase at a time when too many Vermonters are struggling to afford healthcare," Teresa Anderson, the director of brand and engagement for the insurer, wrote to VTDigger.

She added that lasting affordability will take systemwide work.

"That underscores a simple reality: if we want lower premiums, we must lower the cost of care. Hospital costs make up a large share of healthcare spending, and BlueCross VT, hospitals and providers need to continue to work together on long term solutions to lower costs."

Insurance plans available on the state marketplace through Vermont Health Connect are displayed on a monitor on Monday.PHOTO BY NOEL CLARK — VTDIGGER