Reasons for why premiums are so high for Vermont’s exchange

by Robert Maynard

By now most Vermonters are aware that the premiums under Vermont’s exchanges are causing sticker shock.  This shock has supporters scrambling to explain away the high cost of the exchange premiums.  To address these concerns, Shumlin Administration health reform director Robin Lunge offered the suggestion that the higher premiums were the result of our low population and high average age.  Those of us who have been critical of the way Vermont is setting up the exchange as a bridge to single payer have argued that the continued thinning out of the health insurance market competition is as an additional factor.  Darcie Johnston, of Vermonters for Health Care Freedom, offered some additional observations in this Burlington Free Press article, as did Cynthia Cox of the Kaiser Family Foundation:

Finally, Johnston said, Vermont failed to lower costs by shrinking coverage mandates back to those required under federal law rather than holding on to extra Vermont requirements.

Cynthia Cox, one of the researchers at Kaiser Family Foundation who analyzed the premiums, said extra coverage requirements could make a “big difference.”

She also offered another possibility to explain why premiums came in lower in other states that haven’t operated as Vermont has, under requirements such as the mandate to cover everyone regardless of their health.

Yes, our low population and high average age are factors driving costs up, but they are not the only factors.  There are policy related factors at work here as well.  That is something, which the supporters of Vermont’s mad rush toward single payer seem to be ignoring.  They can whistle past the grave yard for only so long.