Vermonters are again facing steep upward premium growth for 2025 due to the cumulative impact of hospital costs, drug prices and state health care policy choices. Blue Cross and Blue Shield of Vermont projects that these trends will continue and will require rate increases of 16.3% for individual health plans and 19.1% for the small group health plans to pay for the cost of the care for Vermonters covered by Vermont Health Connect.
Hospital costs comprise nearly two-thirds of the rate increase. Growing utilization is contributing to higher hospital spending paired with recent price increases. More Vermonters are accessing hospital care, and the increasing utilization is both indicative of efforts to lessen wait times and the more intensive needs of an older population. Almost half of all premiums are spent on hospital-based health care services — inpatient and outpatient procedures, including surgeries and diagnostic services, in-facility drug treatment, laboratory tests, advanced imaging, specialist consults, medical equipment, and office visits — both in person and through telemedicine.
Double-digit retail pharmaceutical trends also contribute to the higher premiums for 2025. In particular, the exponential growth in drug treatments for diabetes and weight loss are adding substantial pressure to premiums.
Double-digit retail pharmaceutical trends also contribute to the higher premiums for 2025. In particular, the exponential growth in drug treatments for diabetes and weight loss are adding substantial pressure to premiums. GLP-1 drugs are life-altering medications for managing these difficult chronic conditions, but the drugs are incredibly expensive, and the number of prescriptions has expanded dramatically in recent years. The cost and utilization of brand and specialty drugs continue to grow precipitously, against the cost of generics.
The cumulative impact of state health policy choices that consistently weigh access and expanded benefits over affordability are the third lever that is contributing to the high premium increases in 2025.
The decision to amplify the effects of Silver Loading will result in shifting to much higher premiums for On-Exchange Silver plans in order to draw down additional federal Advanced Premium Tax Credits to qualifying Vermont individuals and families.
For more information, visit bluecrossvt.org.
