Connect with us

Vermont

BlueCross BlueShield of Vermont in financial crisis

Published

on

BlueCross BlueShield of Vermont in financial crisis


BlueCross BlueShield of Vermont − the largest health insurer in Vermont with a 66% market share − is threatened with insolvency because of its declining reserves, according to a state regulator.

Kevin Gaffney, commissioner of the Vermont Department of Financial Regulation, said Friday he’s confident BCBSVT will remain solvent, which is his department’s responsibility to ensure.

“As solvency regulator, our primary role is protecting the market,” Gaffney said. “We have to have a place for people to purchase insurance or we haven’t done a good job of protecting Vermont residents.”

Gaffney said Vermont’s largest health insurer is at a critical juncture.

Advertisement

“BlueCross BlueShield of Vermont is a big tanker,” he said. “We have to start to turn it. We can do that and there are steps to do it.”

While Vermont has not had a major insurance company fail, according to Gaffney, he said the example of Florida offers a cautionary tale where losses from natural disasters have caused insolvencies in property insurance companies and have triggered other insurance companies to exit the market.

“We have sufficient rigor in our solvency process to avoid these things,” Gaffney said. “DFR is taking those actions in a timely and I think in an appropriate manner.”

Gaffney is requiring BCBSVT to file a plan with DFR by early September, showing how they’re going to “bolster their reserves and improve their solvency.” The key element of that plan, articulated in a “solvency letter” Gaffney sent to Owen Foster, chair of the Green Mountain Care Board, on July 12, is an additional 4% increase by BCBSVT in contributions to its reserve fund.

Advertisement

The Green Mountain Care Board is an independent oversight board created by the Vermont Legislature to regulate major areas of the health care system in the state, including health insurance premiums. The Care Board would have to approve the increased contributions to BCBSVT’s reserve fund.

‘A Fragile Financial Situation’

Don George, president and chief executive officer of BCBSVT, sent an open letter via email on Monday, July 22, titled, “A Fragile Financial Situation.” In the letter, George said the insurer is in the “unprecedented position” of being forced to file an amended request to the Green Mountain Care Board for an additional 4% increase to contributions to its reserve fund, which comes from premiums paid by policy holders. The reserve fund is used to cover unexpected levels of claims, which the insurer has experienced in the past few months.

“Since May, health care claims have increased dramatically, and our member reserve levels have declined precipitously,” George said. “This is in addition to underwriting losses in five of the last six years, leaving us without the means to weather this downturn with existing member reserves. The cumulative impact of underfunded premiums − despite our consistent advocacy for rates that fully fund the cost of our members’ health care − has created this fragile financial situation.”

Sara Teachout, director of government and media relations for BCBSVT, explained that underwriting losses occur when the company is unable to cover the total amount of member claims plus administrative costs. She said administrative costs for BCBSVT are “quite low,” when compared to its peers nationally, but the insurer is still making administrative cuts by not advertising and by restricting new hiring.

Advertisement

“The only year we did not have a loss was 2020, the year of COVID, when people were not going to the hospital,” Teachout said.

BlueCross BlueShield VT asks for an additional $20 million for its reserve fund

The original request for contributions to the reserve fund, filed in May, asked for a 3% increase, which equates to $15 million. The amended request for a 7% increase equates to $35 million, or more than double the original request, according to Teachout.

“Blue Cross VT has advocated for adequate funding of member reserves consistently over time, while our requests were cut year over year,” George said in an email to the Burlington Free Press. “Now with member reserves dangerously depleted, we are forced to increase the rates substantially to cover the deficit.”

Owen Foster, chair of the Care Board, declined to comment for this story because the hearings for BCBSVT’s rate filings are ongoing.

Making sure BlueCross BlueShield VT remains solvent

Gaffney said the reserve fund is “critical” to maintaining BCBSVT’s solvency. He said the health of the reserve fund can be expressed as a percentage − called a risk-based capital ratio range − reached through complex calculations that reflect BCBSVT’s investment risk, but basically the percentage equates to an amount of money that accounts for “volatility.”

Advertisement

“The (DFR) did an order back in 2019 for Blue Cross Blue Shield of Vermont to maintain a risk-based capital ratio range between 590% and 745%,” Gaffney said. “If you can stay in that range you can withstand volatility and not be at risk (of insolvency).”

At the end of 2023, BCBSVT’s risk-based capital ratio range was 337%, far below the required range. Gaffney said in six of the last 10 years, the insurer’s contribution to its reserve “was a negative because of other adjustments to rate filings.” Rates are regulated by the Green Mountain Care Board.

“It is as dire as it sounds,” Gaffney said.

Reserve fund continues to drop this year

BCBSVT’s reserve fund balance has declined by $47 million over the past two years, not including this year’s results, according to Gaffney. The insurer had about $88 million in reserves at the end of 2023, and that number has continued to decline through 2024. Teachout was unable to provide the current balance of the reserve fund.

Advertisement

“We do know the 2023 number was only adequate to cover just under two months of our members’ claims, which is extremely low,” Teachout said. “We should roughly double where we are. Our balance should have been close to $180 million at the end of 2023.”

‘We have to have a place for people to purchase insurance’

The overall context for the discussion of BCBSVT’s solvency is a crisis of health care affordability for Vermonters, both in terms of hospital costs and premiums. Gaffney said he’s not unsympathetic to the affordability issue, but that he has a larger responsibility as commissioner of DFR, and BCBSVT’s solvency regulator.

Gaffney said he also understands that “often it’s felt that these increases are to just bolster profits for insurance companies.”

“That’s not the case now,” he said. “It’s going to take some time to get back into the range of 590% to 745%.”

Advertisement

Vermonters’ declining health is a big, and expensive, problem

George points to the declining health of Vermonters as a key factor in BCBSVT’s financial crisis, in addition to rising hospital costs. He said health care organizations nationwide are experiencing “extraordinary cost pressures,” as a result of “massive increases in the need for medical and pharmaceutical care.”

“As many of you may have experienced in your own lives, we are faced with these same pressures here in Vermont,” George said. “Furthermore, our data shows the continuing impact of the pandemic and an alarming decline in the overall health status for many of our members. These issues are colliding with a decade of state policy decisions to cut deeply into health insurer reserves and premiums in the name of affordability, creating the urgent situation that we are faced with today.”

Not only are there more claims, but there are bigger claims from more acute medical conditions, Gaffney said.

“The takeaway is the price of insurance is a reflection of costs, not a choice the company makes,” he said. “The company runs on narrow margins.”

Advertisement

Contact Dan D’Ambrosio at 660-1841 or ddambrosio@freepressmedia.com. Follow him on Twitter @DanDambrosioVT. 



Source link

Vermont

How Vermont basketball escaped with win vs Binghamton in final seconds

Published

on

How Vermont basketball escaped with win vs Binghamton in final seconds


UVM welcomes Adrian Dubois as new men’s soccer coach

Adrian Dubois answers questions from the media following his introductory press conference on Monday, Dec. 22.

Momo Nkugwa’s two free throws and TJ Hurley’s defensive block in the final 18 seconds of regulation allowed Vermont basketball to squeeze past Binghamton for a 60-59 America East Conference victory in front of 1,874 at Patrick Gym on Thursday, Jan. 8.

Nkugwa, a freshman, sank both attempts at the line with 18 seconds to play for a 60-59 advantage, and Hurley followed with a block in the paint to deny Binghamton’s Jeremiah Quigley’s layup attempt.

Advertisement

Despite Vermont’s second straight win to open conference play, coach John Becker said his team was fortunate to take the victory against a Binghamton ranked 362 out of 364 Division I teams in kenpom rating.

“Great to win a game you shouldn’t win. I thought Binghamton deserved to win the game with how we played,” Becker said.

Gus Yalden, who was limited with a calf injury, led Vermont (10-7, 2-0) with 15 points and five rebounds in 19-plus minutes. Sean Blake added nine points, while Nkugwa and Ben Michaels chipped in eight points apiece.

For Binghamton (4-13, 0-2), Quigley collected 21 points and 10 boards and Wes Peterson dropped 11 points. The visiting Bearcats owned a 36-31 margin at the break and led for the majority of the game, but shot just 26.9% from the floor in the second half.

Advertisement

“Obviously, not our best game. But a win is a win,” Hurley said. “Every game matters whether you win by one point or you win by 20. We are happy with the win, but we know we have to get better from this as well.”

Who’s next for Vermont basketball?

The Catamounts play host to Maine at Patrick Gym on Thursday, Jan. 15. It will be a rematch of last year’s America East semifinals, which Maine won to end Vermont’s three-year championship reign.

UVM women’s basketball falls at Binghamton

Yanniah Boyd’s layup with 8 seconds to play broke a tie and gave host Binghamton a 69-67 win over Vermont women’s basketball in an America East contest on Thursday, Jan. 8.

Binghamton (10-5, 2-0) rallied for the win with a 24-13 edge in the fourth quarter. The hosts also benefited from 21-for-25 effort at the foul line to Vermont’s 4-for-7 performance.

Bella Pucci’s 20 points and Boyd’s 16 paced the Bearcats.

Advertisement

For Vermont (13-5, 2-1), Malia Lenz recorded 21 points and nine rebounds, Nikola Priede tallied 15 points and 12 rebounds, while Keira Hanson added 11 points and Emma Haan tossed in seven.

Contact Alex Abrami at aabrami@freepressmedia.com. Follow him on X, formerly known as Twitter: @aabrami5.





Source link

Continue Reading

Vermont

Governor Scott pushes for Vermont education reform – Valley News

Published

on

Governor Scott pushes for Vermont education reform – Valley News


MONTPELIER — In his annual address to Vermont legislators Wednesday afternoon, Gov. Phil Scott urged members of the House and Senate to move forward with the next stages of the sweeping education reform project they started last year, at his administration’s urging.

But as the 2026 legislative session got underway this week, it has seemed far from certain that the process of creating new school districts and developing a new funding model — with the goals of improving educational quality and making the system less expensive overall — will advance at the pace, or in the form, that the governor and his Republican allies want.

That’s in part because the school redistricting task force set up in last year’s education reform law, Act 73, did not recommend new proposed district maps in November ahead of the session — essentially flouting one of the law’s key directives. Any new maps would likely include far fewer school districts, with larger student populations in each, than what exists today.

Advertisement
Senators listen as Gov. Phil Scott delivers his state of the state address at the Statehouse in Montpelier on Wednesday, January 7, 2026. GLENN RUSSELL / VtDigger

Speaking to a joint assembly of legislators and other officials for his State of the State address in the House chamber, Scott called education reform “our most critical challenge.”

He pointed to how Vermonters could see a nearly 12% average property tax hike this year, about half of which is due to anticipated increases in school district spending in the 2026-2027 school year, according to estimates late last year from the Vermont Tax Department.

“These are the real costs of maintaining a system designed for a Vermont that no longer exists,” the governor said. “If there’s one thing you take away from this speech today, it’s this — education transformation is not optional. It’s essential.”

In fact, there was not much else legislators could take away from the speech, as Scott’s 35-minute address focused almost entirely on that topic. Scott also took the notable step of using his speech to issue an ultimatum: If lawmakers did not make the changes to the state’s education system that he wants to see, he would not sign other key pieces of legislation they pass, such as the annual state budget or the bill that sets property tax rates, known as the yield bill.

Gov. Phil Scott, left, leaves the House of Representatives chamber after delivering his state of the state address at the Statehouse in Montpelier on Wednesday, January 7, 2026. GLENN RUSSELL / VtDigger

“From my perspective, the recent failure to produce maps was a political strategy to preserve the old system,” the governor said. “Following through is about keeping our word to students, teachers and taxpayers who all deserve better.”

Scott’s ultimatum drew criticism from the Democratic leaders of the House and Senate in remarks to reporters shortly after. House Speaker Jill Krowinski, D-Burlington, said she did not think the veto threat was productive and, in fact, could make it harder to persuade her colleagues in the chamber to move forward with the plan the governor has laid out.

Advertisement

“It’s disappointing to hear,” she said. “I am 100% at the table to figure this out with the House, with the Senate and with the governor — and I think we all are coming to a place of having to reset and figure out what we do to keep education transformation going. And — what does that look like in a map?”

She added, “I think there’s concern and fear about what might happen” among House members, “but I truly believe that every member in my chamber wants to do something. It’s just how we get there — and that’s going to be the tough work ahead of us this session.”

Senate President Pro Tempore Phil Baruth, D/P-Chittenden Central, said he “would have probably preferred no threat, but a private communication of how serious (Scott) is.” Baruth called Scott’s speech “the most narrowly focused State of the State I’ve ever seen” in his 15 years in the Senate, though he understood why the governor would make that decision.

Asked about his own appetite for advancing the stipulations of Act 73, Baruth bristled slightly at a reporter’s suggestion he was “bullish” on the law.

“I would say I’m committed to it,” he said.

Advertisement

In a statement issued shortly after the address, the minority leaders of the House and Senate, for their part, praised the governor’s speech. Scott “correctly identified education reform as our most urgent challenge,” said Rep. Pattie McCoy, R-Poultney, and Sen. Scott Beck, R-Caledonia.

Scott also used his speech Wednesday to foreshadow — briefly — what he called the “hard choices” his administration, together with House and Senate budget writers, will have to make in the coming months when developing the state’s spending plan for the 2027 fiscal year. That time period runs from July 2026 to June 2027.

House and Senate leaders have already said they expect some existing programs will need to be cut as support from the federal government — especially for key human services programs such as nutritional benefits, Medicaid and assistance for home heating costs — wavers.

“This year’s spending package has required difficult decisions,” Scott said of his administration’s budget proposal, which he will present in another address later this month. From there, the House and Senate will develop a budget bill, which they’ll ultimately send back to Scott for his sign-off.

The governor said Wednesday that in national politics, “conflict is chosen over cooperation, division over decency and outrage over outcomes. People lose trust.”

Advertisement

He said he sees advancing the education reform plan he supports, and that legislators started last year in Act 73, as a way to set an example of how people’s “government still works for them.” Democratic leaders’ willingness to evolve the public education system in 2025 along the lines Scott proposed was, in part, a political response to voters’ outrage in 2024 over property tax increases. That spike led Democrats to lose a historic number of state House and Senate seats.

“We don’t need to be asked to do the right thing,” Scott said. “We just need to do it.”

This story was republished with permission from VtDigger, which offers its reporting at no cost to local news organizations through its Community News Sharing Project. To learn more, visit vtdigger.org/community-news-sharing-project.



Source link

Advertisement
Continue Reading

Vermont

Judge approves search warrant for cellphone in deadly Vt. crash

Published

on

Judge approves search warrant for cellphone in deadly Vt. crash


NORTH HERO, Vt. (WCAX) – A judge has signed off on a request to search a cellphone in connection with a crash that killed a 20-year-old motorcyclist back in June.

The judge granted the request from the Grand Isle County state’s attorney for Ellen Willson’s phone.

Prosecutors believe Willson was using the phone when she drove her truck across the center line on Route 2 in North Hero, hitting Hunter Rounds and his father. Rounds was killed and his dad was seriously injured in the Father’s Day crash.

Court paperwork indicates that after police seized Willson’s phone at the scene, she requested to use it to get a phone number, but then admitted to deleting a message. She claimed it was unrelated to the crash.

Advertisement

Willson is not in jail but is under court conditions that she not drive.



Source link

Continue Reading

Trending