News | Catamount Health rates higher than expected

By Shay Totten | Vermont Guardian

Posted March 23, 2007

MONTPELIER — Two of Vermont’s top health insurance providers say Catamount Health Plan insurance rates may end up being 10 percent higher than the Legislature had anticipated.

Earlier this month, MVP and Blue Cross Blue Shield (BCBS) filed detailed plans about the services and programs offered to Catamount Health participants. In addition, they also outlined how they would approach chronic disease management. Catamount Health is slated to hit the market on Oct. 1

MVP’s plan is projected to cost $389 per month while BCBS is proposing one that would cost $413 per month. The rates are for an individual earning an annual income that is 300 percent of the federal poverty level, or $29,400.

For people earning less than 300 percent of poverty, they would pay a fixed amount ranging from a low of $60 for someone at 200 percent of the federal poverty level to $135 for those earning just less than the 300 percent level.

Those rates — filed with the Department of Banking, Insurance, Securities, and Health Care Administration (BISHCA)— are 8.5 and 12.6 percent more than the Legislature had anticipated, which is raising concerns that the program could cost more than anticipated if everyone who is projected to be eligible for the plan actually enrolls.

At the end of last year, the Legislature projected that an individual plan would cost $360 per month.

Rep. Steve Maier, D-Middlebury, chairman of the House Health Care Committee and co-chairman of the legislative Health Care Commission, had concerns about the high numbers and their impacts on the program’s budget but said there is still time before the Oct. 1 start date to make sure it’s affordable.

“It’s too early to start speculating about some of the bigger questions, but yes they are bit bigger than what we had anticipated and the result of the BISHCA process might bring them down,” said Maier.

BISHCA has 45 days to evaluate the rates and make a recommendation. However, a spokeswoman said they would likely come to a quick decision in order to keep the plan’s implementation timeline on track. While there is no medical track record to determine use rates among the uninsured, the department can review administrative costs and other areas.

Some eyebrows have been raised about the plans difference in pricing. Last week, the plans were outlined to the state Health Care Commission, a decision-making body comprised of lawmakers and two members of the public.

“I think people are pleased that there are these two specific proposals, and there was a little concern that the numbers came in higher than when BISHCA priced it out and there were a few questions about why the rates were so different for what is essentially the same product,” said Hester, himself a former MVP executive.

Kevin Goddard, the vice president for marketing and public relations at Blue Cross Blue Shield, said it should not come as a surprise that the rates were higher than projected.

“The Legislature issued those at a point in time and time has marched on,” said Goddard. “It’s always difficult to predict health care costs in the future and with this group in particular we have no experience with them because they have not had insurance. When you don’t have an experience with the population, it’s difficult to know who will choose the health insurance and what their health status will be, and how much health care they will use. Will it induce the use of health care because maybe they’ve been putting it off until now?”

Goddard said the rates set by Blue Cross were established to ensure that they could participate in Catamount without creating a subsidy system funded by their group insurance plans.

Over time, Goddard said, he expects that rates can be more finely tuned as the insurers get to know more about those insured under the Catamount plan.

Maier, and others, say the rate filings are a sign that the process of providing additional health insurance is progressing and on schedule its Oct. 1 start date.

“I think, in general, there is some enthusiasm that Catamount is moving on schedule,” agreed Hester.