Vermont Health Insurers Seek Premium Hikes

Two health insurance companies in Vermont are aiming to increase premium rates for plans available in the state market for 2026. Specifically, Blue Cross Blue Shield is proposing a 23.3% hike for individual plans and 13.7% for small group plans. Meanwhile, MVP, another company operating on the exchange, is requesting a more modest average increase of 6.2% for individual plans and 7.5% for small group plans.

Individual plans typically cover one person or a family, while small group plans are for employers with 100 employees or fewer.

Every spring, health insurers submit requests for changes to the rates for the plans sold in the Vermont Insurance Market to the Green Mountain Care Commission, the state’s health regulator. Recently, these plans have seen significant price spikes due to rising healthcare and pharmaceutical costs. Notably, Blue Cross Blue Shield has experienced a particularly steep increase as the insurance market in Vermont faces an unusual financial strain.

In the wake of the Covid-19 pandemic, Blue Cross has drawn from cash reserves as more members seek care for complex health issues. They estimate that about 7 percentage points of the proposed increase in 2026 for both plan categories will be saved to bolster their reserves.

This disparity in proposed price increases between Blue Cross and MVP is partly due to a less healthy client base for Blue Cross, explained Sara Teachout, a spokesperson for the company.

MVP’s spokesperson Jordan Estay refrained from commenting directly on Blue Cross’s application but stated that MVP’s rate requests stem from a thorough financial evaluation of the Vermont market, reflecting rising care costs, higher drug prices, and increased healthcare usage.

Currently, Blue Cross Blue Shield offers coverage to around 24,000 Vermonters for individual plans and approximately 15,000 for small group plans. Conversely, MVP covers around 12,000 for individual plans and about 18,000 for small groups.

In a bid to reduce costs, Blue Cross Blue Shield is also scaling back coverage for popular weight loss medications like Zepbound and Wegovy in both individual and small group plans, though they will continue to cover Ozempic, which is prescribed for diabetes management. Teachout mentioned that without this adjustment, the requested premium increase would have been even greater.

MVP has not clarified if they will also change their drug coverage, but Estay noted that they continuously evaluate drug benefits to align with customer needs and best practices.

An important challenge currently facing insurers is the uncertainty regarding federal grants that assist individuals in paying for health insurance, expanded during the pandemic to help more people qualify for tax credits. These expanded credits are set to expire soon, but some Vermont companies believe they can keep premium growth manageable if state legislation can address this issue. For instance, Blue Cross plans would see an increase of 15.61%, while MVP’s plans might actually decrease by 0.48%.

If the credits expire, it may push more people towards low-cost plans that still offer good benefits, although the overall situation remains somewhat unclear.

Mike Fisher, a key health care advocate in Vermont, expressed concern that healthcare costs are already too high for many residents even before these potential hikes. A significant increase combined with diminished federal support could impose severe hardships on Vermontians and small businesses, he cautioned.

“We need to find ways to reduce healthcare costs here in Vermont,” he stated.

Correction: Previous versions of this article inaccurately described changes to coverage for Blue Cross Blue Shield’s weight loss medications.