Blog#224- 11/29/24
IT’S ENOUGH TO MAKE YOU SICK
By
Richard Davis
Vermonters who purchase their own health insurance whether they are young or old got some really bad news recently. The Green Mountain Care Board (GMCB) approved increases in the small group market for Blue Cross and MVP that border on outrageous. The GMCB is charged with the task of assuring the solvency of insurance companies so the consumers’ needs for affordable insurance do not enter the mix very much.
Blue Cross asked for a 24% increase and ended up with a 22.8% increase which translates to an average annual increase of 19.8%. MVP asked for an 11.5% increase and the board gave them 11.1% which is a 14.2% increase over last year. The board does have a time when the public can comment before the increases are finalized, but when people tell them they can’t afford another double digit increase they show little sympathy and hide behind statements that the cost of health care is rising too fast.
Everyone is taking a hit, but seniors may have a harder time than others because a lot of us are living on fixed incomes and have to live within a budget range. This kind of increase blows any budgeting out of the water. I have a Vermont Medigap Blue Plan D Medicare supplemental policy with Blue Cross of Vermont that cost me $191 a month last year. I was notified it will cost me $234 in 2025. It will cost me an extra $516 next year for the privilege of buying a Medigap policy. The cost of Medicare Part B is also slated for an increase.
A number of people have contacted me asking if there are cheaper alternatives to their current policy, hoping I will steer them to a more affordable plan. But all of the insurers have aligned themselves with the Vermont insurers. Here is a link to a chart of all of the Medigap plans available in Vermont for 2025:
And then there are those people who have been penalized because they did not buy a Medigap policy right after they turned 65.
My wife was lured into a Medicare Advantage plan before I met her. I convinced her to switch to traditional Medicare but it cost her almost a $100 more for her plan than mine just because she didn’t sign up when it was first available. She paid $285 for Plan G in 2024 and will pay $372 in 2025. How was Blue Cross able to increase her rate 30% when they were approved for a 22.8% increase?
It’s easy to blame the insurance companies for the high cost of health care but they are just a middle man. What other service that we receive forces us to help another entity pay for it because it is so expensive? If the cost of health care was reasonable we would not need insurance companies. We could go to the emergency room and pay a bill of a few hundred dollars and feel OK.
In my fantasy world you could have a hip replacement and be able to pay the whole bill out of pocket.
I remember seeing a bill from the 1930’s from Brattleboro Memorial Hospital for the delivery of a baby that included about a week of hospitalization. The cost was $36.00 which translates to $567 today. An affordable price. Those were the days when doctors would barter with patients and there was no need for a middle man to pay the bills.
Insurance companies are not in the health care business to keep people healthy, although that would be a good thing for them.
They exist to try to spread out risk over a large population in the hope that the risk they take gives them profit. In Vermont there is a small population and that means the risk is greater for health insurance companies and it also means that services cost more because we just don’t have a big enough economy of scale.
If you think of health insurance as bankruptcy prevention it will give you a better sense of what it’s all about. It is a sad reality in today’s world.
