Two Vermont health insurance companies are seeking higher premiums for plans bought on the state marketplace in 2026, requests that come amid rapidly rising health care costs statewide.
Blue Cross Blue Shield of Vermont is seeking to raise the cost of its premiums by an average of 23.3% for individual plans and 13.7% for small group plans on the state health insurance exchange next year. MVP, the other insurer that sells on the exchange, is seeking average increases of 6.2% for individual plans and 7.5% for small group plans.
Individual plans cover single Vermonters or families, while small group plans are bought by employers with 100 or fewer people.
Each spring, health insurers ask the Green Mountain Care Board, a state health care regulator, to approve changes to the cost of plans bought on the Vermont insurance marketplace, Vermont Health Connect.
In recent years, costs for those plans have skyrocketed due to rising costs for health care and pharmaceuticals. Blue Cross Blue Shield’s prices have grown particularly quickly, as the Vermont insurer faces an unprecedented financial crisis.
Since the Covid-19 pandemic, Blue Cross has seen its cash reserves drained as members seek more care for more complex health conditions. A significant chunk of the proposed 2026 hikes — about 7 percentage points of the increases for both types of plans, according to the insurer — will go into the bank to shore up those reserves.
That’s one major reason for the difference between the price hikes at Blue Cross and MVP. Another reason, according to Sara Teachout, a spokesperson for Blue Cross Blue Shield of Vermont, is that the insurer’s pool of customers is less healthy than MVP’s, because many customers who need more care gravitate toward its plans.
“I think that there is a perception that Blue Cross and Blue Shield of Vermont and the Blue system has very comprehensive health care coverage,” she said. “I think it’s true — but I think it also is a perception.”
Jordan Estey, a spokesperson for MVP, said in an email that she could not comment on the filings from Blue Cross Blue Shield of Vermont.
“At MVP, our rate request is grounded in a thorough financial evaluation of the Vermont market through systematic and standard actuarial practices,” Estey said. “Our request reflects the rising cost of care, escalating pharmaceutical expenses, and increased utilization of health care services.”
Currently, Blue Cross Blue Shield insures about 24,000 Vermonters on individual plans and 15,000 on small group plans. MVP insures about 12,000 people on individual plans and 18,000 people on small group plans.
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In an effort to reduce costs, Blue Cross Blue Shield is also cutting back on coverage of popular weight-loss drugs known as GLP-1s, such as Ozempic and Wegovy, said Teachout, the Blue Cross spokesperson. The insurer will no longer cover the drugs for the purpose of weight loss for people on small group or individual plans. The pharmaceuticals will still be covered for diabetes.
Teachout said without that change, the requested premium hikes would be even higher — an increase of 1.3 percentage points for individual plans and 2.3 percentage points for small group plans.
“Blue Cross VT made these changes after careful consideration of the GLP-1 weight loss drug’s efficacy, adherence, access, and cost,” Teachout wrote in an email.
It wasn’t clear whether MVP is changing its coverage of the drugs. Estey, the MVP spokesperson, wrote in an email that the insurer “continuously reviews its coverage policies and pharmaceutical benefits, including GLP-1s, to ensure they meet customer needs and align with best practices.”
One key factor complicating the picture is uncertainty surrounding federal subsidies that help people pay for health insurance. During the Covid-19 pandemic, the federal government expanded eligibility for tax credits to help people afford insurance premiums.
Those expanded tax credits are scheduled to expire at the end of the year. But if Congress takes action to extend them as they currently exist, Vermont’s health insurers are projecting significantly lower premium increases: a 15.61% increase for Blue Cross Blue Shield’s individual plans and, for MVP, a decrease of 0.48% for individual plans.
That’s because the expiring credits are likely to drive people to drop their insurance, or purchase lower-cost plans with less generous benefits, according to Teachout. But what, if any, action the federal government may take remains up in the air.
Mike Fisher, Vermont’s chief health care advocate, said health insurance is already unaffordable for many Vermonters, even before next year’s rate hikes. Large increases — and the potential for decreased federal help — “will be incredibly difficult, or devastating, for many Vermonters and Vermont small businesses,” Fisher said.
“We need to find ways to spend less on our health care here in Vermont,” he said.
