Committee weighs changes to H.137 on Medicare supplement rate reviews

The Vermont House Committee on Commerce & Economic Development met Feb. 18 to consider proposed amendments to H.137 that would change how the Department of Financial Regulation reviews Medicare supplement insurance (commonly called Medigap) premium filings.

Legislative counsel Jen Carby described draft language that would (1) raise the extra-review trigger from a 3% requested composite average rate increase to 10%; (2) require insurers offering Medicare supplement policies with a Jan. 1 effective date to file rate requests by July 1 of the preceding year (six months before the effective date for other policies); (3) remove a statutorily required independent actuarial analysis tied to a provision in Title 33; and (4) make public hearings discretionary rather than mandatory in certain contested-review situations.

The change would also formalize notice to the Office of the Health Care Advocate when the Department of Financial Regulation receives a qualifying filing. Carby said the draft cleans up inconsistent terminology in current statute and makes other technical edits.

Why it matters: Medicare supplement plans are standardized at the federal level, serve primarily older Vermonters on Medicare and can have significant effect on out-of-pocket costs. Under current state law, filings that meet the existing thresholds trigger added review steps that stakeholders and regulators say have slowed approvals and added cost.

Department of Financial Regulation staff said the extra independent actuarial step usually produced results similar to the department's actuary, but added months and roughly $10,000–$20,000 in review costs that ultimately are borne by insurers and, through premiums, policyholders. The department representative told the committee it continues to notify the Department of Disabilities, Aging, and Independent Living and has been keeping the Office of the Health Care Advocate informed of filings "so that they can be prepared to answer any constituent questions," and supported the proposed changes as a way to reduce delay while maintaining statutory safeguards.

Sarah Teachout, director of government and media relations for Blue Cross and Blue Shield of Vermont, said her company supports the proposed amendments, noting that inconsistent filing dates among insurers sometimes leave consumers buying or renewing plans before final premium information is available. "So anyway, we support these changes," Teachout said.

Committee members asked about timing to ensure the Department completes reviews before Medicare open enrollment and about whether the health-care advocate and other stakeholders had been consulted. The Department said it had run the proposed filing deadline by Medicare supplement insurers in the market and had talked with the Office of the Health Care Advocate; the Green Mountain Care Board was not involved because it has no statutory authority over Medicare supplement plans.

No formal motion or vote was taken on the amendments during the hearing. The discussion closed with committee members and staff indicating they would continue to consider the draft language and collect stakeholder feedback.

Ending: Committee materials show the draft would repeal the referenced independent-analysis language in Title 33 and amend a provision in Title 8 regarding Medicare supplement filings; committee staff and the Department said they will continue stakeholder conversations before any formal report or bill change is advanced.