Vermont: 8.5% avg. APPROVED rates for 2018 (assuming CSR payments)

Vermont was one of the first states I analyzed back in the late spring; obvoiusly a lot has changed since then, so I updated/revised my analysis of their requested rate hikes for 2018 a couple of weeks ago, with requested average increases of 11.9% if CSR payments are made or 21.6% if they aren't.

Yesterday, Louise Norris gave me a heads up that the Vermont regulators have issued their approved rate increases for the two carriers operating on the individual and small group markets in the tiny state. This makes Vermont the 4th state to announce their approved rates for next year, joining Oregon, Maryland and New York.

At the time, I estimated that missing CSRs would cause rates to shoot up another 9.7% based on the Kaiser Family Foundation's national estimate of a 19% increase on Silver plans specifically (only about half of Vermont exchange enrollees choose Silver plans). However, Norris pointed me towards this local VT news article in which Blue Cross Blue Shield of Vermont...which holds a commanding 87% market share in the state...estimated the CSR factor to be much lower than most other states:

BCBS’s rate filing assumes continuation of the federal “cost sharing reduction” payments for all of 2018, even though President Trump and others in his administration periodically threaten to stop making these payments, claiming they are “bailouts” for insurance companies. What these payments do is enable insurers to reduce deductibles, co-pays and other out-of-pocket costs for middle-income households. In effect, Trump is threatening to raise health insurance costs for millions of consumers because Congress has so far refused to take health insurance away from millions of consumers. If the cost sharing reduction payments were not continued, BCBS estimates premiums would go up by an additional 1.5 to 2 percent.

Norris and I both scratched our heads a bit over this before I realized that since Vermont is one of only 2 states (+DC) which merges their individual and small group markets, CSR costs would be spread across a much larger total. Vermont has around 34,400 people enrolled in individual market policies...and another 46,000 in small group policies. Adding sm. group plans to the CSR mix dilutes the pain, so to speak, so instead of being divided across 34.4K people, it'd be spread across 80.3K. With that in mind, I've knocked the CSR factor down from 9.7 points to just 2.

As a result, Vermont has been approved for average rate increases of 8.5% assuming CSR payments continue for all of 2018...or around 10.5% assuming they aren't: