Blue Cross and Blue Shield of Vermont Proposes Lower Premiums in 2022

Berlin, Vermont – For the first time since the inception of the Affordable Care Act, Blue Cross and Blue Shield of Vermont (Blue Cross) can recommend a premium reduction. Compared with last year, the proposal is to lower overall health insurance premiums collected by almost one percent (-0.9%). This is the overall rate change prior to unmerging the individual and small group market.

This recommended rate reduction is the direct result of Blue Cross cost containment initiatives. The sharp increases in specialty pharmaceutical prices and higher than normal hospital budgets approved by the Green Mountain Care Board (GMCB) for 2022 are driving underlying increases in the range of 7%. Our efforts to contain costs, primarily though our new Vermont Blue Rx prescription drug program, outweigh the combined drug and provider price increases. This innovative prescription drug benefit service will improve the consumer experience, drive better health outcomes and lower costs for members, providers, and employers.

This rate reduction is not because of the impact of COVID-19 on our health care system. Blue Cross did not include the costs of COVID-19 in premiums. All COVID-19 testing, vaccine, and treatment costs will continue to be covered by member reserves until it becomes part of the normal seasonal health cycle. We provide our customers a vast array of health services, cost-saving initiatives, care coordination, and prescription drug management along with active participation in health care reform. All of these benefits come with very low administrative costs.

This year’s rate filing is more complicated than usual because the Vermont Legislature took a momentous step by unmerging the pooled risk of the individual and small group health insurance policy holders. For one year only, people who purchase health insurance on their own and people who are supported by their employer – businesses, non-profits and municipalities with 100 employees or fewer – are separate for the purpose of calculating their premiums. This is possible because of the significant federal health care benefits for individuals and families in the American Rescue Plan Act (ARPA).

“This has been an unprecedented time with so much uncertainty, but I am pleased that we are able to lower premiums for our members,” said Don George, President and CEO of Blue Cross. “Our company’s cost containment efforts and our strong, unqualified support of unmerging the markets clearly demonstrates our commitment to doing everything possible to help our customers, especially this year when so many are in need.”

When these markets are separated, the result is an unprecedented -7.8% reduction in small employer premiums for the 2022 plan year. Vermont’s small businesses, non-profits and municipalities are no longer spending millions each year to subsidize the individual market. This responsibility is shifted to the federal funds that are part of the Affordable Care Act. There is a corresponding increase in individual premium rates of 7.9% that is offset for most families by the new ARPA subsidies. We are committed to helping our members transition to direct enrollment through Vermont Health Connect in order to obtain these benefits. 

Blue Cross and Blue Shield of Vermont is Vermont’s only local, not-for-profit health plan. For over 70 years, the company has been enhancing the health and well-being of the Vermonters by offering innovative plans to individuals, seniors and businesses. Our employees are dedicated to developing new ways to support high quality care and programs and events that promote health and wellness. Blue Cross and Blue Shield of Vermont is an independent licensee of the Blue Cross and Blue Shield Association.