Blue Cross and Blue Shield of Vermont warns Senate committee it paid $1.5 billion in 2023 claims and faces reserve shortfall

SARAH KUCHOW, director of government and media relations for Blue Cross and Blue Shield of Vermont, told the Vermont Senate Health & Welfare Committee on Jan. 24 that the insurer paid $1.5 billion in claims in 2023 and is drawing on reserves to cover persistent losses.

Kuchow said the company paid about $25.5 million in state and federal taxes and fees in 2023 and that administrative expenses represented about 6.2% of spending. “For every dollar we collected in premiums, we paid out a dollar 11,” she said, describing a payout ratio the company calls unsustainable.

The company discussed multiple drivers of higher costs, including rising hospital prices, growth in utilization, and expensive specialty pharmaceuticals such as GLP‑1 drugs. Kuchow said Vermont’s hospital prices rank among the highest in the country and that some high-cost infused medicines administered in hospitals are major cost drivers.

Kuchow described recent steps Blue Cross and Blue Shield of Vermont has taken to address solvency: requesting a larger margin from regulators (the company sought a…