New health insurance rates set by state
by Jack Deming
Apr 04, 2013 | 2201 views | 0 0 comments | 6 6 recommendations | email to a friend | print
Since the Affordable Care Act was signed into law in 2010, Vermont has not only embraced the federal health care overhaul legislation, but led the way in its implementation. This week, the state proved to be ahead of the curve once again, becoming the first state to release projected rates for its citizens purchasing insurance through Vermont Health Connect, the state’s federally mandated health care exchange, beginning January 2014. The state provided four rate examples for individuals, families, and business owners moving from Catamount and other traditional health plans to Vermont Health Connect. The rates included costs after federal premium tax credits and state assistance. According to Vermont Director of Health Care Reform Robin Lunge, the numbers released are not official, but keep Vermonters in the loop during what can be a confusing time. The income brackets provided as examples will affect 40,000 to 45,000 Vermonters.

A couple with no children and an income of $32,000 enrolled in a Catamount Health policy shopping on the exchange would see their charged premium decrease, and through federal and state premium assistance, would see their monthly paid premium decrease from $248 to $134. A single person earning $40,000 a year will see their current nongroup premium decrease from $600 per month to $317 on a Vermont Health Connect plan, while a family of four with an income of $32,000 would pay only $45 out of pocket.

A small business with seven employees and a plan that charges each employee a $2,500 personal deductible, and costs $12,800 per month, will see its cost decrease to $10,000 per month. With a small employer tax credit applied at the end of the year, equal to 16% of the employer’s contribution to the cost of health insurance benefits, the employer would end up paying only $8,000 monthly.

“I think these proposed rates are good news,” said Lunge. “They provide some assurance that the premiums available in the exchange will be comparable. There was anxiety about the exchange, and a worry that the rates would go up, but we’re not seeing that. The preliminary numbers look good.”

Beginning October 1, Vermonters will be able to access Vermont Health Connect, and begin shopping for the health care plan that fits their needs. Commonly described as an “Orbitz.com of health insurance,” Vermont Health Connect will contain plans in five categories, Platinum, Gold, Silver, Bronze, and Catastrophic, each structured with actuarial levels that meet the federal health care law’s standards.

According to the state, the average rates proposed for each level are $365.76 for Bronze, $441.09 for Silver, $527.95 for Gold, and $609.47 for Platinum. Each level varies in the amount of premium and out-of-pocket costs members pay.

A noticeable difference between the Vermont Health Exchange numbers and the current Catamount Health plan’s is the federal premium assistance to state assistance ratio. Under Catamount, assistance was put on the state’s back, but with the health care legislation being federal, the federal assistance amounts increase. Tax credits for business owners’ plans are also 100% federally funded.

Lunge says Vermont was one of two states that have always pushed for premium assistance, and the federal government is following their lead.

Lunge also said releasing preliminary costs helps Vermont continue to lead the country in health care reform cooperation and implementation. “We moved forward with the exchange right away,” said Lunge. “That means we have been in planning stages a lot longer than other states and didn’t wait until the fall election to get started. This puts us in a good position to be on time with reform, and Vermont will have the advantages of this system in a timely way.”
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