Vermont Insurance-Exchange Rates Show Savings From Health Law

Vermont residents may save money on medical insurance through subsidized exchange plans under President Barack Obama’s Affordable Care Act, according to the first state look at premiums under the 2010 health law.

The Vermont rates provide an initial analysis of how much health insurance may cost Americans nationwide as the law’s core provision kicks in next year. In Vermont, a couple earning $32,000 a year would pay about $134 a month after U.S. subsidies for a certain level of coverage that would have cost them $248 under the state’s existing program, according to a comparison document published by the state.

The state has built the insurance exchange for people who don’t get coverage at their jobs. Federal and state subsidies are a key part of keeping the new health plans affordable, said Robin Wood, a spokeswoman for MVP Health Care, a nonprofit insurer that serves Vermont, in an e-mail.

Basic premiums in the exchange, called Vermont Health Connect, would be “roughly comparable to what people currently pay, but for better coverage,” Governor Peter Shumlin, a Democrat, said in a statement.

Insurers including Aetna Inc., based in Hartford, Connecticut, have warned of “rate shock” when customers shop for plans in exchanges, citing health-law policies that mandate better benefits and prohibit the companies from refusing to cover the sick or charging older people more than three times as much as young adults.

Vermont’s insurance exchange will be served by two companies, MVP Health, based in Schenectady, New York, and Blue Cross Blue Shield of Vermont.

Catastrophic Plan

Without the subsidies, premiums would start at $202 a month for a single person under 30 buying a stripped-down “catastrophic” plan sold by MVP Health, according to the statement released yesterday by Vermont. “Platinum” coverage for an entire family, the most expensive available, would cost $1,728 a month from MVP or $1,698 from Blue Cross Blue Shield.

The proposed rates from the two insurers must be reviewed by state regulators before becoming final in July. The exchanges are set to open for shopping Oct. 1 for health plans that would take effect Jan. 1.

Vermont also intends to be the first state in the U.S. with a single-payer health-care system, in which the government pays all of its residents’ medical bills and insurance companies are unnecessary. The state legislature passed a law in 2011 to steer the state toward adopting such a system in 2017, the soonest possible under the federal health-care law.