BENNINGTON -- What insurance premiums will cost 100,000 Vermonters has largely been determined.
The Green Mountain Care Board announced Monday the rates it has set for the two insurance companies that will be selling their products through Vermont Health Connect. Starting in October, those who purchase private insurance directly or those insured through a company with 50 or less employees, must buy health insurance through Vermont Health Connect or face tax penalties. Coverage begins Jan. 1, 2014 and it is expected about 100,000 Vermonters will be affected.
Vermont Health Connect, also known as a health care exchange, has been described by state officials as a service similar to Priceline.com, which lets travelers compare airfare and hotel rates among different companies. It can be found at www.healthconnect.vermont.gov. Under the Affordable Care Act, states are required to implement a health care exchange. The Green Mountain Care Board is an independent state entity tasked with keeping health care costs down, and oversees hospital budgets and insurance rates, among other things.
Green Mountain Care Board Chairwoman Anya Rader Wallack said the only two companies, so far, that applied to be involved in the exchange are Blue Cross Blue Shield of Vermont, and MVP Health Care Vermont. The board's decision cuts the proposal submitted by Blue Cross Blue Shield by 4.3 percent, and MVP by 5.3 percent.
The plans available through the exchange are tiered and designated platinum, gold, silver, and bronze. The silver plan is considered by the board to be the "benchmark" plan. The silver plan sold by Blue Cross has a single person premium of approximately $395 per month, while the silver MVP plan is $410 per month.
Wallack said the companies have 30 days to appeal the decision.
"We don't have any plans to appeal," said Kevin Goddard, spokesman for Blue Cross Blue Shield, however he said the reductions were disappointing.
Many assumptions and estimates go into rates, Goddard said, and that it was not surprising that two groups of professionals, actuaries from his company and members of the Green Mountain Care Board, could look at the figures and reach different rate estimates.
One of the elements the company considers when setting rates is what they will have to be over the long run, Goddard said, adding that Blue Cross had offered to shave its proposal by 2 percent after it was submitted. The company can move forward under these rates, however, and plans to continue its work educating customers on the new health care requirements.
Susan Gretowski, a spokeswoman for MVP, said her company is reviewing the board's decision.
According to the board, federal income tax credits are available for certain income levels. A single person making $35,488 per year could get subsidies that would bring the cost of Blue Cross' silver plan to $230 per month, and $252 for the MVP plan. Individuals bellow 133 percent of the federal poverty level ($15,316 income per year) would pay approximately $19.
"The good news is we were able to trim these rates significantly from the levels proposed. Hopefully this action, along with the new assistance Vermonters will receive from the state and federal governments, will make health insurance affordable to more Vermonters," said Wallack. "However, the underlying cost of health care and health insurance remain alarmingly high, and we have to redouble our efforts to address this problem."
Wallack said the board made its decision after conducting a number of hearings where the companies explained their proposals.
"Our decisions reflect the evidence in the rate filings and presented at hearings," Wallack said in an email. "Nonetheless, we welcome other creative ideas for reducing these rates, and ongoing involvement from the carriers in making health care more affordable to Vermonters."
The Vermont Department of Financial Regulation was also involved and made recommendations to the board, said Wallack. She said this will be an annual process for the board and companies that wish to participate in the exchange.
The written decision along with more information can be found at www.gmcboard.vermont.gov.