Blue Cross Blue Shield of Vermont and its subsidiary The Vermont Health Plan are appealing a decision by state regulators to reduce a rate increase request, saying the lower rate could hurt the subsidiary's solvency.

The Green Mountain Care Board went against the advice of the Department of Financial Regulation and its own actuaries this month when it chose to reduce The Vermont Health Plan's requested increase to its reserve fund from 2 percent to 0.5 percent, filings with the state show.

The Vermont Health Plan is a for-profit company owned by Blue Cross that is used primarily by small to mid-sized companies with 50 to 200 employees, according to Kevin Goddard, vice president of external affairs. It has 5,610 policyholders covering 10,743 lives.

If The Vermont Health Plan's full increase to its reserves had been approved, monthly premiums would increase $7.12.

Goddard said the decision would "erode" the health plan's surpluses and impact its long-term solvency.

The Department of Financial Regulation wrote to the board that its solvency analysis supported the 2 percent increase, and that it should not be revised downward unless the board's actuaries "expressly opined" that the increase was excessive. The actuaries consulted by the board suggested the 2 percent could be safely reduced to 1 percent.

The board determined that a 0.5 percent increase was an "adequate buffer" and would result in more affordable rates for consumers.


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The Office of the Health Care Advocate, a project of Vermont Legal Aid, which represents consumers in the rate review process, suggested a 1 percent increase. Attorneys for that office said they were still reviewing Blue Cross' appeal and are planning to file a response.

Jacqueline Hughes, of Storrow, Buckley and Hughes, is representing Blue Cross and The Vermont Health Plan. Hughes submitted a motion for the board to reconsider its decision Friday; she argues that the board did not give "appropriate weight" to the Department of Financial Regulation's solvency analysis.

The board plans to move "expeditiously" on the motion for reconsideration, but there's no deadline for making a decision, according to its attorney.

The filing is separate from the 9.8 percent rate increase Blue Cross requested for the health plans it offers on Vermont Health Connect, the state's federally mandated online marketplace.

Hearings on the exchange rate increases are scheduled for Aug. 12-13.