In recent months, Vermont legislators and state representatives have been concerned about the fate of the largest state health insurance company.
Blue Cross Blue Shield of Vermont, a member based in the Vermont of the national health insurance organization, is also the only health insurance company based in Vermont. Non -profit covers About a third of the population of the State in all its plans.
Now, with its reservations drained by a multi -year increase in insurance complaints, the non -profit organization faces a financial crisis with little recent preceding. While Blue Cross Blue Shield is preparing to ask the state regulators to increase premiums in 2026, the company’s financial health alarmed the decision -makers and prompted a race to consolidate the company.
“If Blue Cross cannot pay complaints, the system fails,” said Owen Foster, president of the Green Mountain Care Board, a key health care regulator.
Federally qualified health centers, independent clinics, mental health agencies, perhaps even hospitals – “If they are not paid, they close,” said Foster.
The financial opposites confronted with Blue Cross Blue Shield are familiar with the Vermont health system. In the wake of the COVVI-19 pandemic, hospitals and other suppliers saw a wave of patients, many of whom had more complex conditions. In addition, the price of care – especially drugs, and more particularly specialized drugs, such as popular weight loss drugs called GLP -1 – has rushed in recent years.
This led to an unexpected increase in health spending across the state. In 2023 and 2024For example, the University of Vermont medical center has exceeded its tens of millions of dollars – surpluses, according to hospital administrators, were caused by a massive increase in patients needing more care.
This wave, in turn, drained the cash reserves of Blue Cross Blue Shield. From 2021 to the end of 2024, Blue Cross Blue Shield lost nearly $ 152 million, According to data The insurer introduced himself to legislators earlier this month. Last year, Blue Cross lost $ 62.1 million.
In 2019, the insurer had $ 133.5 million in the bank. At the end of 2024, Blue Cross Blue Shield had only $ 58 million – and pays an average of $ 35 million per week of complaints.
Last year, the credit rating agency is the best retrograde Blue Cross Blue Shield’s Note twiceBringing your B ++ score in C ++. This moved the “good” insurer to “marginal” insurer in less than six months.
“I have lived and worked in Vermont for 45 years,” said Don George, CEO of Blue Cross Blue Shield, to the legislators of the Senate Committee for Health and Well-Being last month. “And I have never seen anything at a distance close to what we are going through now.”
‘We are lucky’
An important part of these losses comes from the Medicare Advantage plans from Blue Cross Blue Shield, Vermont Blue Advantage. From 2019 to 2023, Blue Cross Blue Shield lost $ 43.4 million on these levels, according to Financial files. About 35,000 Vermonters are on Blue Cross Blue Shield Medicare Advantage Plans, said Sara Teachout, the insurer’s spokesperson.
Some of these first losses were starting costs before the deployment of plans in 2021, Teachout said. Once they have reached the market, the plans continued to lose money – $ 11.5 million in 2022 and $ 22.5 million in 2023 – with the rest of the insurer’s portfolio, according to files.
These deficits are due to the same factors affecting the rest of the Blue Cross Blue Shield, Teachout said: an increase in residents needing care and increasing costs for this care.
These losses “are proportionate to the losses of our other companies which are due to the overvoltage of costs,” she said.
To protect themselves from these losses, Blue Cross Blue Shield from Vermont has almost completely unloaded its Medicare Advantage activity on Blue Cross Blue Shield from Michigan, an affiliated non -profit insurer. He also contracted a loan of $ 30 million in Blue Cross Blue Shield from Michigan.
Due to its trembling financial base, Blue Cross Blue Shield from Vermont pays 8% interest on this Michigan loan. George, the CEO, said in an interview that the insurer had the chance to have even obtained a loan in the first place.
“The reality is that we would probably be – in these circumstances and this risk – could not find anyone who would lend Blue Cross Blue Shield of Vermont (money),” he said. “So we are fortunate to have Michigan, and that’s how we offer this interest rate.”
To consolidate his finances, the insurer also prevented the hiring of around 30 positions and launched himself in a “full capital collection plan” with the Ministry of Financial Regulation, according to George.
‘The number one cost pilot’
As part of an annual regulatory process, Blue Cross Blue Shield is preparing to request increases from its insurance premiums later this month – increases that should be significant. Last year, the insurer raised premiums For individual and small groups on the state health insurance market by around 20%.
For 2026, “given the rate of medical costs and the pharmacy and the use we saw until the end of 2024, I would expect increases that are not like what we have recently seen in the past,” said Ruth Greene, the insurer’s financial director in March.
These increases have an impact not only the insurance costs of individual vermons – already part of the the highest of the nation – But also their taxes. Most municipalities buy insurance plans in small groups on the state health insurance market, according to Ted Brady, executive director of the Vermont League of Cities and Towns.
Before the increase in premiums from last year, around 80% of municipal employees were provided with Blue Cross Blue Shield, said Brady, although he now expects that many municipalities have gone to MVP, the other insurer who sells on the market.
“Health insurance is the first engine engine for municipalities at the moment,” he said.
School and state employees are also ensured on the Blue Cross levels, but are on another type of plan called self -funded plans. Although these organizations have also experienced significant premium increases as health care costs are increasing, members contribute proportionately to Blue Cross reserves – which means that they are more isolated from the financial difficulties of the insurer, according to the administrators of these organizations.
However, the increase in insurance premiums is “enormous economic pressure on each part of the vermont,” said Vermont’s health care defender Mike Fisher last month.
“Acute and immediate threat”
Meanwhile, decision-makers and legislators take action by themselves. In March, the Green Mountain Care Board, a key health care regulator, Announced an agreement With the University of Vermont health network, which will provide $ 12 million in hospital funds to Blue Cross Blue Shield in Vermont.
The legislators also exposes the details of a bill which would allow emergency action to help health insurers in financial crisis. This bill, H. 482would allow the Green Mountain Care Board to reduce the reimbursement rates paid to a Vermont hospital if the insurer in question faces “an acute and immediate threat for its solvency”.
Such a rate reduction would only be authorized if the hospital is part of a financially stable network, according to the language of the bill.
The proposed legislation was adopted from the House in March. A key legislative committee, the senatorial committee of health and well-being, should vote to advance it on Friday.
Meanwhile, in the other chamber, the Chamber’s health committee is looking to solve the problem of rising costs closer to their source – in hospitals and other suppliers.
A sprawling invoice, S.126, Implement a new payment model known as the pricing based on references, in which hospital costs are fixed at Medicare reimbursement rates, to enter into force at the latest in 2027. The bill would also order the social services agency to work with providers to reduce the expenses of health care by 5% “for hospital exercise 2026”, which begins on October 1.
This bill adopted the Senate in March, and the legislators of the Chamber’s health care committee are working on changes this week.
“There is a lot of work to do,” said the Sen. Ginny Lyons, D-Chittenden Southeast, Chairman of the Senate Committee for Health and Well-Being, about the legislation of its Committee last month. “We cannot leave the Blue Cross and Blue Shield pass.”