Blue Cross and Blue Shield of Vermont is sounding the alarm about the escalating financial challenges facing the state's healthcare system, noting that "the cost surge was unrelenting through 2024."
In a Jan. 14 letter, the company's president and CEO, Don George, wrote that paid claims have increased by 17% per year since 2020, resulting in significant losses and $100 million in member reserve losses over five of the last six years. In October 2024, the payer incurred a $13.6 million loss, "the highest single month for paid claims in our history," Mr. George said.
He noted that the company's spending is 33.5% higher than other BCBS plans in the Northeast and 42.7% higher than the national average.
According to the letter, the sustained losses are a direct result of escalating prices for medical services, medications such as GLP-1s, and expensive specialty treatments, which are outpacing the revenue brought in by premiums.
"The last five years have shown in alarming fashion that merely cutting premiums does not result in either increased affordability or healthcare cost containment," he said.
In 2024, the company requested the highest-ever premium increases for individual and small group plans in the state's history, citing the significant rise in claim costs and depleted reserves.
The insurer also affiliated with BCBS Michigan in 2023, a deal that BCBS Vermont estimated would save the insurer $10 million in administrative costs over three years. Though the organizations are affiliated, premiums from BCBS Vermont and BCBS Michigan stay in their respective states and are used to pay claims and maintain reserves.
BCBS Vermont has developed a multiphase plan with the state aimed at stabilizing its financial position and is calling on state officials, providers, health plans, and employers to take coordinated action to address the problem.