The president of BlueCross BlueShield of Vermont sent a letter to state legislatorshealthcare companies and executives describing this week the alarming finances of the insurer: They’ve lost $100 million in five of the last six years. And recently, in October, the company alone lost more than $13 million – the highest month of paid claims in its history.
“As a direct result of rising prices for medical services and pharmaceuticals, Vermont’s commercial health care premiums – already high and increasing at an unsustainable rate – are not covering the cost of care,” wrote Don George, president and CEO of the insurer.
According to federal data, Vermont has the highest premiums for employer-provided health insurance in any state. For this year, BlueCross increased its rates by nearly 20% for individuals and nearly 23% for small businesses after several years of double-digit increases. BlueCross VT says the state’s demographics — its elderly, rural population — are only partially responsible for their increasingly expensive premiums.
“We really want to dispel this myth, because we can’t solve our problems if we blame the wrong cause,” said Sara Teachout, a spokesperson for BlueCross.
“Demographics don’t explain the problem,” echoed Owen Foster, president of the state’s health care regulator, the Green Mountain Care Board. “We can’t just point to this and say we can’t do anything.”
Demographics don’t explain the problem… We can’t just point to this and say we can’t do anything.
Owen Foster, Chairman of the Board of Green Mountain Care
Teachout said that when looking at comparative data from BlueCross insurers across the country and taking into account Vermont’s demographics, health care prices in the state are still 26% higher than in the rest of the Northeast. East.
Hospital rates
BlueCross says a major reason for the state’s disproportionate costs comes from prices at Vermont’s hospitals and throughout the health care system. Prices charged for hospital outpatient care in Vermont are among the highest in the country.
“Hospital costs account for about half of our health care spending, and they are a driver of escalating health care costs,” said Julie Wasserman, an independent health care consultant. She wrote about the cost of emergency care at the University of Vermont Medical Centerthe largest hospital in the state and among the 10% most expensive for outpatient services in the country.
Annie Mackin, a spokeswoman for the UVM Health Network — which includes UVM Medical Center — said the hospital is working to reduce the cost of care, including cutting radiology prices by 25 percent.
“We believe there is a path forward to address affordability in Vermont and the transition to a value-based system,” she said in an emailed statement. “(We) look forward to working with our government, our insurers and the business community to address the issue more broadly.”
Mackin also said there are other factors, beyond health care prices, that contribute to BlueCross VT’s financial situation.
The letter from the insurance company, warning of their precariousness financial situation, comes weeks after UVM Health Network announced cuts to patient services to comply with the budget orders of the Green Mountain Care Board. The orders required the hospital system to limit its operating revenue and reduce by 1 percent the amount it can bill commercial insurance companies.
Lexi Krupp
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Vermont Public
A recent bond disclosure report shows that UVM Medical Center and a group of affiliated hospitals had net operating income of $86 million in the last fiscal year. Regulators have pushed to cap revenues to try to rein in health care prices.
“We have a health care financing system that doesn’t work,” said Mike Fisher, the state’s top health care advocate. “The Blue Cross letter therefore becomes a sort of flashing red light.”
BlueCross VT leaders say without any changes in controlling rising health care prices in the state, premiums will continue to rise at unsustainable rates.
“It’s crazy, people can’t pay,” said Foster, of the Green Mountain Care Board. “Yet if you fail to do so, BlueCross risks very serious insolvency. And if they go bankrupt, it will be Armageddon as the service providers will not be paid. »
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