Federal upheaval won’t change 2018 health care premiums

Sen. Kevin Mullin, R-Rutland. Photo by Erin Mansfield/VTDigger
Sen. Kevin Mullin, R-Rutland. Photo by Erin Mansfield/VTDigger

By Erin Mansfield

For VT Digger

The state’s top health care regulator says insurance prices on Vermont Health Connect will remain steady for calendar year 2018, despite recent actions at the federal level.

Kevin Mullin, the chair of the Green Mountain Care Board, said Monday that the board would not allow insurance companies to raise premiums for plans effective in calendar year 2018 even though the federal government is holding back subsidies for the health exchange that will likely increase costs for insurance companies.

President Donald Trump has said he will stop federal payments to insurance companies known as cost-sharing reductions that help up to 13,000 Vermonters afford out-of-pocket health care costs. Insurers have said the pullback on funding will destabilize the health care exchange insurance market under the Affordable Care Act.

“The biggest (reason) is the timing of it because it’s just before open enrollment, which starts next week” on Nov. 1, Mullin said. State officials have already put together outreach material to help people understand that their premiums are based on the already-approved 2018 premiums.

“To throw chaos back into the exchange makes absolutely no sense,” Mullin said.

Open enrollment is the once-a-year period when Vermont Health Connect customers can change their plans for any reason. People who do not have insurance can also sign up during this time period. This year, open enrollment will run from Nov. 1 to Dec. 15.

The Green Mountain Care Board regulates health insurance premiums, including the premiums on Vermont Health Connect. For the 2018 plan year, the board decided to approve premiums with the assumption that the federal cost-sharing reductions would be fully funded.

In light of the defunding, Mullin said other states allowed insurance companies to increase premiums for the mid-level silver plans on exchanges because insurers were able to raise rates without affecting low-income customers.

That’s because the customers are eligible for a second type of federal subsidy designed to make sure that customers only pay a certain percent of their income for their health insurance. If the underlying insurance premium is higher, low-income customers pay the same amount out of pocket, and the second federal subsidy picks up the rest.

“That wouldn’t work for Vermont, so we didn’t have that option that any of the other states had,” Mullin said.

In Vermont, the insurance pool for exchange participants is combined with the insurance pool for small business employees. If Vermont increased the prices of silver plans, small business employees would pay significantly more in premiums if they selected the silver plans, he said.

The state’s two insurers, Blue Cross Blue Shield of Vermont and MVP, receive about $12 million per year under the Affordable Care Act to pay for federal cost-sharing reductions, according to the Department of Vermont Health Access. Federal law keeps them on the hook for providing cost-sharing reduction benefits to Vermont Health Connect customers, even without the funding.

In the short-term, Mullin said insurance companies will need to tap into their reserves to absorb the loss. If the companies want to be reimbursed for giving that benefit in calendar year 2018, and the last few months of 2017, Mullin predicts they will ask to increase 2019 premiums further than otherwise.

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