Health regulators approve 13.7% BCBS health insurance large group rate hike
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Vermont regulators approve a trimmed increase to 2026 health insurance premiums for large employers
Blue Cross Blue Shield of Vermont will increase the cost of health insurance premiums for Vermont employers with more than 100 employees by an average of 13.7% in 2026. The rate increase is expected to affect just under 5,000 people in the state. 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. The decision comes as Blue Cross Blue Shields Vermont awaits approval to raise rates 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.
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.
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.
Health insurers ask to increase health plan premiums, amid rising health care costs
Blue Cross Blue Shield of Vermont is seeking to raise the cost of its premiums by an average of 23.3%. 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. The requests come amid rapidly rising health care costs statewide. Blue Cross is also cutting back on coverage of popular weight-loss drugs known as GLP-1s on its individual andsmall group plans, which are used for weight loss. The drugs Zepbound and Wegovy will no longer be covered on those plans, according to Blue Cross spokesperson Sara Teachout, a spokesperson for Blue Cross of Vermont. The insurer’s pool of customers is less healthy than MVP’s, because many customers who need more care gravitate toward its plans, Teachout says. The federal government may take action to extend tax credits that help people afford insurance premiums, but if Congress takes action, increases could be significantly lower, an analyst says.
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.
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 on its individual and small group plans. The drugs Zepbound and Wegovy, which are used for weight loss, will no longer be covered on those plans, according to Teachout, the Blue Cross spokesperson. Plans will continue to cover Ozempic, which is prescribed for diabetes, she said.
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.
Correction: An earlier version of this article incorrectly described changes to Blue Cross Blue Shield’s coverage of weight loss drugs.