2026 Rate Changes: Vermont: +17.4% avg; 6.8% due SPECIFICALLY to IRA subsidy expiration (preliminary)

via Vermont's Green Mountain Care Board:

May 13, 2025

Green Mountain Care Board Receives 2026 QHP Rate Requests Amid Rising Health Care Costs

Montpelier, VT – On May 12, 2025, the Green Mountain Care Board (GMCB) received the 2026 individual and small group health insurance premium rate filings from BlueCross and BlueShield of Vermont and MVP Health Plan. The filings will be posted on GMCB’s rate review website. The average rate increases being requested are shown below:

• Blue Cross Blue Shield of VT
  • Individual Market: 23.3%
  • Small Group Market: 13.7%
• MVP Health Plan
  • Individual Market: 6.2%
  • Small Group Market: 7.5%

The filings mark the beginning of a multi-month public review process led by the GMCB, during which GMCB hears from its actuaries, the carriers, the Health Care Advocate, the Department of Financial Regulation, and the public. Final decisions are expected to be issued in August.

The proposed rates may change during this review period, including due to potential changes at the federal level. For example, the proposed rates for the individual market reflect increases due to the anticipated loss of federal enhanced premium tax credits. Absent Congressional action, these enhanced tax credits will expire on December 31, 2025, and may result in higher net premium increases for individuals.

GMCB has scheduled public rate review hearings for:

• BlueCross and BlueShield on Monday, July 21 at 8:00 a.m.
• MVP on Wednesday, July 23 at 8:00 a.m.

GMCB is accepting public comments on these filings on an ongoing basis through July 28, 2025. Additionally, a Public Comment Forum will be held on Thursday, July 24 at 4:00 p.m. to provide Vermonters with an opportunity to share their perspectives directly with the GMCB.

Additional information about these meetings, including how to attend or participate, will be posted to the GMCB website. Meeting materials and filing documents will also be posted as they become available.

According to BCBS VT's Actuarial Memo, of the whopping 23.3% average rate hike they're asking for, 6.6 points of it (28% of the total hike) is due specifically to the anticipated expiration of the enhanced IRA premium subsidies:

At the time of this filing, the enhanced Advanced Premium Tax Credits (APTC) currently available to individuals are set to expire at the end of 2025. Due to the lower APTC expected in 2026, we project that some individuals will leave the QHP market. We estimated that this will increase the overall morbidity of the individual market and this resulted in an additional increase of 6.6 percent for the individual market only.

...as of this date, Congress has not extended them. The expiration of these federal benefits increases premium costs for individuals and families and is expected to result in more people deciding to forego insurance coverage. This will shrink the population with coverage and worsen the risk pool requiring higher premiums for the remaining members.

BCBS VT doesn't just say they anticipate a drop in enrollment; they lay out the exact number of enrollees they expect to drop coverage for every policy offered on the exchange, which is pretty impressive. Overall, they expect individual market enrollment to drop from 23,952 to 20,935 (12.6% of enrollees), while they don't expect any significant change in small group market enrollment (15,058).

It's also worth noting that Vermont, which used to have a merged individual & small group market, recently enacted legislation to permanently unmerge the two, joining nearly every other state (I think Massachusetts is the only state which has a merged indy/sm group market now).

BCBS VT also addresses the potential for Silver Loading to be terminated by Congressional Republicans:

For plan year 2026, the Green Mountain Care Board requires that QHP issuers use a silver load of 41.94%. Blue Cross VT continues to support this effort to increase the federal Advance Premium Tax Credits for Vermonters who qualify for these benefits. At the same time, this guidance introduces complexity for members during the open enrollment season.

First, on-exchange Silver Plans will, similarly to 2025, have higher premiums than Gold plans. Blue Cross VT plans to continue to work with other stakeholders to ensure that the messaging is consistent and that members are supported through open enrollment.

On May 2, 2025, CMS released a bulletin to provide technical direction in light of potential Congressional action related to the cost-share reduction (CSR) program. If Congress appropriates federal funds to fund the CSR program, Blue Cross VT will work with other Vermont stakeholders to understand the impacts to the Vermont QHP individual market.

According to MVP Health Plan's actuarial memo, they had 9,312 policyholders and 12,790 effectuated enrollees as of February. Regarding the IRA subsidies, they state:

The IRA-enhanced Advanced Premium Tax Credit (APTC) subsidies are currently set to expire at the end of 2025. A disproportionate share of healthy members are expected to leave the market, resulting in increased morbidity.

...MVP assumed the lapse of 25% of contracts that receive APTC subsidies and have one HCC. The overall disenrollment would be 17% of MVP's total individual market membership (which is in line with the estimates from the CBO and the carrier survey). Removing the claims and membership for these members from  our population (which simulates these members leaving the market in total) results in a morbidity impact of 7.1%.

If the current law is amended to extend APTC enhancements through 2026, MVP reserves the right to modify the submitted rates. We have provided additional rate filing exhibits in SERFF that reflect our alternate rates if the subsidies are extended as currently in place. The impact is the removal of the 7.1% morbidity assumption in the indext rate development. MVP recognizes that the amount of the federal premium tax credits could change in which case, the estimated rate impact may differ from the two scenarios provided.

Here's what it looks like when you put it all together: The weighted average preliminary rate hikes are 17.4% for the individual market and 10.3% for the small group market.

On the individual market, the weighted average impact of IRA subsidies being allowed to expire is 6.8%, which means that if approved as is, avg. 2026 ACA premiums in Vermont will be 6.8% higher than they otherwise would be, costing unsubsidized enrollees an extra $72/month or $864/year.

Remember, that's on top of the dramatic rate hikes for subsidized enrollees caused by the subsidy expriation itself.

Click graphic for high-res version: