Vermont: APPROVED 2019 ACA rate increases drop from 8.6% to 6.1%; would be just 1.7% w/out #ACASabotage

When I first analyzed Vermont's 2019 ACA policy rate filings back in May, the state's two ACA carriers, Blue Cross Blue Shield and MVP Healthcare, were requesting average premium increases of 7.5% and 10.9% respectively.

Vermont's situation is unusual compared to most other states for a couple of reasons. First of all, VT is one of only two states (Massachusetts is the other one) which has merged their Individual and Small Group market risk pools into one to help stabilize both markets. This is something I wish every state would do, frankly, although it's probably a lot easier to do in deep blue states (and Vermont having such a small population probably made it easier as well).

Secondly, Vermont is one of only two states where the carriers weren't alllowed to add the cost of their lost Cost Sharing Reduction (CSR) reimbursement payments this year. I was honestly a bit surprised that the carriers agreed to this. North Dakota forbid CSR cost loading as well, and one of their carriers dropped out of the market in protest. (DC didn't allow CSR loading either, but they hardly have anyone with CSR assistance, so there was hardly anything to "load" anyway).


Anyway, for 2019, both BCBSVT and MVP are being allowed to bake the CSR load into their rates--they're wisely going the full #SilverSwitcharoo route--and are also tacking on a few extra points to account for the anticipated adverse selection impact from the ACA's individual mandate being repealed. As it happens Vermont has passed their own state-level mandate penalty...but that won't go into effect until 2020, so it's a moot point for next year. Here's what the 2019 rate change and sabotage impact situation looked like at the time:

However, it's important to keep in mind that these were requested rate changes only. They still had to be run through the state regulatory board, which oftentimes will modify the final, approved rate changes. Sure enough, that's exactly what happened this week:

With those changes, here's what Vermont's rate hike situation looks like now. Notice that the sabotage impact is also slightly smaller; as shown below, the review board questioned how much they expect the mandate repeal and expansion of non-ACA compliant Association Health Plans to impact the ACA risk pool, and shaved off about a half a point or so for each carrier:

In short, unsubsidized Vermont enrollees will be paying around 6.1% more instead of 8.6% more...but they would have been paying just 1.7% more instead of 3.5% more without #ACASabotage. That amounts to around $272 extra per year for each unsubsidized enrollee.