Blue Cross and Blue Shield Rate Increase

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(Host) Although hospital budgets are on the rise again, the state’s major health insurance company says it won’t have to raise rates as much as it has in recent years. Blue Cross and Blue Shield says hospital costs are a major factor in setting health insurance premiums but the company says it’s managed to control cost pressures in other areas.

VPR’s John Dillon reports.

(Dillon) Vermont hospitals want to raise their rates by almost eight percent next year. Blue Cross and Blue Shield says those rates contribute to the near-constant upward rise in health insurance premiums.

But company spokesman Leigh Tofferi says that some other cost pressures have eased. He says the company has encouraged people to use generic, rather than brand name, drugs. And he says that the increase in utilization rates, which track how often people seek medical care, has slowed slightly as well. So the company has been able to reduce the size of its own rate hike requests.

(Tofferi) “We think the actual effect on our premium is that increases will be in the single digits for the first time in several years.”

(Dillon) Tofferi points out that this single-digit rise represents an average across the company’s lines of insurance. Some customers could see much higher increases. According to the state Banking and Insurance Department, Blue Cross has requested a 14.9 percent hike rate hike for customers in its small group plan.

Even though rates have slowed somewhat overall, Tofferi says the rise in medical inflation continues to outpace increases in the cost of living.

(Tofferi) “Obviously, the percentages are in multiples of the consumer index. People’s wages obviously aren’t increasing at that rate, and employer profitability also isn’t increasing at that rate.”

(Dillon) A new coalition of business groups, non-profit organizations and state officials is trying to find ways to control health care costs and expand coverage.

Similar efforts in the past have failed to make many changes. But Bobby Kamen of AARP, which represents many retirees and people on fixed incomes, predicts that this coalition will make headway.

(Kamen) “One of the differences this time is I think we all agree that there is a crisis. I don’t think there’s been that sort of energy into something like this has in the past. So certainly the fact that we have a crisis in health care, the costs are rising, people can’t afford it. So I think that this is the number one reason that this is going to succeed.”

(Dillon) But the coalition isn’t planning to come up with any proposals before the legislative session in January. In the meantime, the cost pressures continue to rise. The hospital budgets will be reviewed at the end of the month by the state’s public oversight commission.

For Vermont Public Radio, I’m John Dillon in Montpelier.

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