Vermont regulators approve a trimmed increase to 2026 health insurance premiums for large employers

Owen Foster, chair of the Green Mountain Care Board, testifies before the Health Reform Oversight Committee at the Statehouse in Montpelier on Nov. 30, 2023. File photo by Glenn Russell/VTDigger

The Green Mountain Care Board approved double-digit increases to the premium rates that Vermont’s biggest health insurance provider can charge large employers next year.

Vermont’s main health care regulator will allow Blue Cross Blue Shield of Vermont to increase the cost of health insurance premiums for Vermont employers with more than 100 employees by an average of 13.7% in 2026, according to a press release from the Green Mountain Care Board. The rate increase is expected to affect just under 5,000 people in the state.

The approved rate increase for the same category of plan for 2025 was 8.4% on average.

“We are committed to ensuring that health insurance rates are as affordable and fair for Vermonters as possible while balancing the need for insurer solvency and access to care,” Owen Foster, Chair of the Green Mountain Care Board, said in the press release. 

Blue Cross Blue Shield of Vermont is facing significant financial challenges brought on by a surge in the cost of health care claims over the past several years. In response, Blue Cross Blue Shield and the state’s other major insurer, MVP, have both increased rates significantly, making health insurance costs in Vermont among the highest in the nation. 

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Foster pointed to the findings of a study done last year by national consulting firm Oliver Wyman as evidence of the need for major restructuring in Vermont’s health care system to bring costs under control.

“As identified in the Oliver Wyman report, Vermont’s health system requires significant transformation to address gaps in care, ensure provider sustainability, and to protect Vermonters from excessive healthcare costs.”

The rate increase approved by the Green Mountain Care Board represents a reduction from the 17.3% premium hike that Blue Cross Blue Shield Vermont had initially requested for next year. 

Cutting the increase was possible because of recent efforts by the board and lawmakers to clamp down on the prices for hospital-based services and certain prescription drugs, the regulator said. 

According to the press release, the bulk of the reduction is due to the passage of H.266, a law that caps the price that hospitals can charge insurers like Blue Cross Blue Shield of Vermont for outpatient pharmaceuticals. In testimony before lawmakers this year, a spokesperson for the nonprofit insurer projected that the cap would contribute to a reduction of between three and four percentage points on premium increases for next year.

The trimmed rate increase also reflects the Green Mountain Care Board’s enforcement actions against the University of Vermont Medical Center and Rutland Regional Medical Center related to their earnings from 2023, as well as the guidance the regulator set for all the state’s hospitals as they build their 2026 budgets.

The decision comes as Blue Cross Blue Shield Vermont awaits approval to raise rates in 2026 for other plans sold on the state’s Affordable Care Act marketplace. Last month, the insurance company asked regulators to approve an average rate increase of about 19.8% for individual plans and 22.8% for small group plans. 

This decision suggests that the Green Mountain Care Board may also reduce those premium rate requests in similar ways.