Will Vermont Health Insurance Exchange Rates Be Affordable for Residents?

The first days of April brought the announcement of proposed premium rates for two of the insurance companies that will offer coverage to Vermont residents under the state’s health insurance exchange, according to state officials. Vermont, which is setting up an exchange that will allow residents to purchase insurance through its online marketplace, Vermont Health Connect, starting in the fall, is the first state to release the rates for its exchange. Vermont aimed to have the premiums announced early this year, with the enrollment beginning in October 2013, and coverage in January 2014.

Health insurance exchanges are required to be created in every state, either by the state itself or by HHS in the alternative, under section 1311 of the Patient Protection and Affordable Care Act (PPACA)  (P.L. 111-148). The exchanges will allow individuals who are not eligible for Medicaid but not provided insurance benefits through an employer the ability to purchase coverage at rates more competitive with those available to group health plans, and will lay out the plans available to them in an easy-to-understand manner.

The monthly rates were presented by Blue Cross Blue Shield of Vermont (BCBSVT) and MVP Health Care (MVP), and range for individuals from $329 and $202, respectively, for catastrophic coverage for those under 30 years of age to $604 and $615 for platinum plans with low cost-sharing. Families would pay $924 or $567 per month for catastrophic coverage under BCBSVT and MVP, respectively, and $1,698 and $1,728 for platinum. High-deductible plans for individuals will cost $371 for BCBSVT or $377 for MVP and $1,043 or $1,060 for families.

A BCBSVT spokesperson stated that the rates are comparable to what the company currently offers in Vermont. Both Robin Lunge, director of health reform for the governor’s office, and Mark Larson, commissioner of the Department of Vermont Health Access, found this to be good news. Larson noted, “Given the fear that many had that rates would jump substantially, it appears that isn’t the case.”

Not all found the announcement of the rates to be as favorable. In an article appearing in the Burlington Free Press, it was noted that Darcie Johnston, founder of Vermonters for Health Care Freedom, found that the same high-deductible coverage available to an individual under the exchange for $377 in 2014, currently costs $321 per month, and last year cost $285. In the same article, Lunge was cited as stating that the deductible for that plan would be reduced substantially, which would ultimately lead to savings for the individual.

Individuals purchasing insurance through exchanges will likely also be eligible for federal subsidies to help with the cost. Considering the additional coverage of many essential health benefits, also required under PPACA, these rates could be considered a steal. Once the cost is subsidized, the cost of these plans may be more in line with the costs of plans cited by Johnston.