MONTPELIER -- Vermont state employees, on average, pay higher health care premiums than their counterparts in other states, according to a new study from the Pew Charitable Trusts.

The average per-employee per-month premium for coverage of employees and dependents was $963 in 2013. In Vermont, premiums cost $1,307 on average.

Vermont covers 80 percent of employee premiums versus 84 percent nationally, the report shows, but Vermont's employee health plans offer better overall coverage than the national average.

Even when the study controlled for family size and cost sharing, such as co-pays, coinsurance and deductibles, Vermont's state employees still pay more than the national average for health care, the study found.

When controlling for those factors, the average cost to employees was $580. For Vermont state employees it was $712.

State employee health plans are typically more generous than plans offered by private sector employers. Virtually all state employee health plans, including Vermont's, would be considered "platinum" plans on the new health exchanges.

Health insurance costs are second only to Medicaid when it comes to states' spending on health care, according to the report. How states manage employee health benefits, and other elements of their compensation package, affects states' fiscal health. It can also impact their ability to recruit and retain qualified workers.

Health plans also impact state workers' well-being.


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It's important for policymakers to make "evidence-based decisions by comparing themselves to their peers," the report says.

However, the report's authors caution that "higher spending is not necessarily an indication of waste, and lower spending is not necessarily a sign of efficiency."

That's because of variance in the regional cost of health services and the different demographic makeup of employees across states.

Vermont has an older population and relatively high costs for medical services, which could contribute to the higher cost of state employee health care.

The report identifies policy levers that states can explore when looking at employee health plans, such as lower cost sharing for high value services, higher premiums for pre-Medicare retirees -- who typically cost health plans more than active employees -- and more robust wellness programs.

The report is based on an analysis of data from 2011 to 2013 compiled by the actuarial firm Milliman in their Atlas of Public Employer Health Plans.

In 2014 Vermont changed administrators for its health plan from Cigna to Blue Cross Blue Shield of Vermont. The health plan itself is negotiated between the state and its employee union, the Vermont State Employees Association.

When the switch was announced, Gov. Peter Shumlin said it would save the state $10 million annually. Harold Schwartz, with the Department of Human Resources, said those savings do not mean the state will spend $10 million less on employee health care this year, but that it will spend $10 million less than it would have under the old contract.

Dave Bellini, chair of the Vermont State Employees Association's committee on benefits, was not sanguine about the change.

He said he believes that Blue Cross will actually cost the state more money, but was chosen, he believes, because it will ultimately be the administrator for Green Mountain Care -- the state's planned universal health care program.

The report shows Vermont's share of employee premiums was virtually static from 2011 to 2013 at roughly $94 million.

"The past three years, if we kept premium increases at zero, we were hitting it out of the park," Bellini said. "With numbers like that why on earth would you switch to Blue Cross?"

In the first six months of 2014, Vermont and its employees have paid roughly $75 million in premiums, with the state's share of that at close to $60 million, according to Schwartz. That suggests the 2014 total will be greater for the first time since 2011.

Schwartz was not familiar with the Pew Report and could not say if the state has, or is planning to, implement any of its recommendations.

Former Human Resources Commissioner Kate Duffy told VTDigger last year that the Blue Cross wellness plan and its commitment to health care reform were key reasons the company was selected.

The report is the latest in a series produced in collaboration with the MacArthur Foundation that aims to help states improve their health policies. An earlier report examined state spending on prison health care.

A forthcoming report will analyze state Medicaid spending.