As employee health insurance rates spike in Vermont, some municipalities are reevaluating their options.
The Moretown Select Board voted at its Monday, November 4, 2024 meeting to change insurance providers for the town’s six employees, saving $8,000 in next year’s budget. The town switched from a plan under Blue Cross Blue Shield (BCBS) Vermont – the state’s largest insurer – to a plan under MVP Health Care, the only other commercial insurer that sells qualified health plans on Vermont’s insurance marketplace.
With the MVP plan, Moretown will still see a 15% increase in employee health insurance costs from this year. With the prior BCBS plan, the town would have seen a 45% increase. Another option was to switch to a different BCBS plan, bringing a 25% increase.
Earlier this year, BCBS and MVP both got permission from state regulators to increase rates for next year, after the state’s Department of Financial Regulation found insurers were dealing with an influx of health care claims and low reserves, nearing financial collapse.
SMALL GROUPS
BCBS is set to increase insurance premiums for individuals by 20% and premiums for small groups – like municipalities – by 23%. MVP is set to raise premiums by 14% for individuals and 11% for small groups.
Moretown delinquent tax collector Craig Eilers, who advises Moretown about employee benefits on a volunteer basis, told the select board that a plan under BCBS worked well for the town in past years because the town got refunds when its employees filed a lower number of claims. However, that wasn’t the case this year.
Moretown town clerk Cherilyn Brown said the town got $23,000 in refunds during its time with BCBS.
NO PUSHBACK
Board members said there was no pushback from employees about switching insurers and that employees were advised to verify that they would not lose coverage with their existing health care providers under the MVP plan. Had there been pushback, the board’s suggestion was to allow some employees to stay with BCBS and pay the difference in plans.
Select board member Robin Campbell said the town should go with the less costly insurer to “keep Blue Cross more honest.” He said “the higher ups have to realize they’re losing business with their prices.”
WARREN SELECT BOARD
The Warren Select Board voted to renew a plan under BCBS for the town’s nine full-time employees at its Tuesday, November 12, 2024 meeting – an easy decision, some board members commented, despite costs rising about 41% for the town, according to town administrator Rebecca Campbell.
New rates include a $351 increase for single plans, $641 for a 2-person plan and $955 for a family plan, Campbell said.
Municipal budgets, which need to be passed by voters on Town Meeting Day in March, will reflect these health insurance increases, as will school district budgets. The soaring cost of employee health care and other benefits was, in part, what caused nearly a third of school budgets to fail across the state last year.
The cost of employee health insurance for Harwood Unified Union School District will climb about 12% for next year – a $684,000 difference for the district. It’s an improvement from this year’s rates, which increased 16.2% from the previous year.
RELIEVED
The Vermont Education Health Initiative, a non-profit that manages health care plans for about 34,000 school employees in the state, recently announced next year’s rates. The district was relieved, Estler said, since earlier projections were closer to a 20% cost increase.
Estler said she is still waiting to see if a host of other benefits, like dental and life insurance, are set to increase.
Eilers reminded Moretown and Warren town officials that Vermonters pay the highest rates for health insurance in the country. Even when taking federal subsidies into account, Vermont still ranks sixth in the nation in terms of costs. And costs are likely to continue increasing next year, Eilers said, since hospital budgets are tight.
Eilers said that when state regulators allow hospital budgets to increase, insurance costs soar, which regulators also allow - “a vicious cycle,” he said, “and there’s no end in sight.”
