Blue Cross Blue Shield of Vermont asks to raise reserve contribution after multi‑year losses

Blue Cross and Blue Shield of Vermont told the Vermont House Committee on Health Care that its health plans have lost money in five of the last six years and that it has asked regulators to allow a larger contribution to reserves to rebuild financial cushions.

"We have asked for a 7% contribution to reserves," said Sarah Teachout, director of government and media relations for Blue Cross and Blue Shield of Vermont. She told lawmakers the request is part of the health plan's 2026 rate filing strategy to restore reserves after a string of losses.

The request follows what Teachout described as a weak reserve position: she said the plan’s reserves are now below the level regulators would expect, amounting to “less than a month” of claims on hand. Teachout also highlighted 2023 financials, saying Blue Cross Vermont paid roughly $1.5 billion in member care that year and that, on average in 2023, the plan paid out $1.11 in costs for every dollar it collected in premium. She said administrative costs for the plan were about 6.2% of premium, which she described as low by national comparison.

Why it matters: Insurers’ reserve levels and the contribution assumptions used in rate filings affect premium requests reviewed by the Green Mountain Care Board and, therefore, potential premiums for Vermont businesses and individuals.

Teachout told the committee that the carrier is required by the Department of Financial Regulation to hold reserves to ensure it can pay claims in adverse years and for unusual events. She also noted one historical shock: after the federal government stopped cost‑sharing reduction payments, Blue Cross Vermont lost an estimated $12 million in a single year from that policy change.

Health Care Advocate Mike Fisher, representing the Healthcare Advocate office at Vermont Legal Aid, said he had received recent communications quantifying losses and pointed to one month in which an official email reported claims exceeded premiums by about $13 million. He told the committee that the pattern of losses increases risk to market stability and affordability for Vermonters.

Blue Cross of Vermont also described corporate changes intended to reduce back‑office costs: Teachout said the plan became a subsidiary of Blue Cross and Blue Shield of Michigan to gain access to larger IT and vendor platforms while maintaining local operations and provider relationships.

Teachout said final year‑end figures for 2024 must await claims runout data, which is typically settled in March after the year’s claims are processed; rate filings under review by the Green Mountain Care Board reflect those actuarial inputs.

Committee context: Committee members pressed for more detail about causes of higher costs and asked about the interplay of hospital budgets, pharmacy spending and the effect of federal premium tax credits. Teachout told legislators that uncertainty about the continuation of advanced premium tax credits at the federal level is a material variable for the individual market.

Next steps: Blue Cross said it has filed or will file rate requests with the Green Mountain Care Board; the board’s review will determine whether the requested change to the contribution to reserves is allowed as part of any approved premium schedule. No formal committee vote or regulatory decision occurred during the hearing.