Insurance hikes aren’t rate increases, they’re tax increases

September 3, 2019

by Rob Roper

Earlier this month the Green Mountain Care Board (GMCB) approved insurance rate hikes of 12.4% for Blue Cross Blue Shield and 10.1% for MVP. GMCB chairman Kevin Mullin admitted this is “unaffordable” for consumers, buuuut what ‘r’ ya’ gonna do? At what point will Vermonters (or everybody for that matter) wake up to the fact that allowing government involvement in healthcare is a very expensive mistake?

It will probably be a while because rate payers, I suspect, aren’t as angry with the politicians as they are with the insurance companies, and this isn’t really fair.

Why is the cost of private insurance going up so much? According to VPR, “Mullin said the cost shift is the result of years of underfunding in the Vermont Medicaid program. Medicaid reimbursement rates, Mullin said, no longer come close to covering the cost of care for the low-income patients that qualify for the program,” which means those costs get shifted onto your BCBS or MVP bills – it’s a hidden, stealth tax on healthcare premiums the pols never have to levy or vote on.

This is as devious as it is unfair, but that’s sadly the objective: take your money to spend on programs (buy votes) without having to suffer accountability for taking your money (lose votes). It gets even worse because the anger being successfully deflected onto the insurance providers means the politicians get to campaign for greater power and regulation over those companies, which just perpetuates the problem. It’s brilliant. Evil, but brilliant.

Imagine if the headlines were more truthful: “Legislature approves 12% tax increase on private health insurance policies to subsidize Medicaid.” That might ripple through the public mindset a little differently and put pressure on politicians to actually fix the root cause of high high prices – themselves.

This is not to let the insurance companies completely off the hook. 12.4% annual rate increases are pretty good compensation for taking a little heat, especially when the folks you’re taking the heat for vote to mandate that citizens buy your product.

Rob Roper is president of the Ethan Allen Institute

{ 1 comment… read it below or add one }

Mary Daly September 4, 2019 at 1:29 pm

Just add that to things like the Energy Efficiency charge, etc. These kind of monkey tricks needs to stop!


Leave a Comment

Previous post:

Next post:

About Us

The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.

Latest News

VT is Lucky to Have High-Tax Neighbors, But Still Loses Migrants

September 20, 2019 By David Flemming Vermont lost more than twice as many people to distant, less taxed states than it gained from mostly neighboring states that were...

Henninger on Democrats and climate

September 19, 2019 by John McClaughry In the Wall Street Journal a week ago columnist Daniel Henninger described the Democratic presidential candidates in that marathon CNN climate debate....

Constitution Day 2019 

September 17, 2019 by John McClaughry It has probably escaped most people’s attention, but today, September 17,  is Constitution Day. The Founders strongly believed that of all the...

Cannibalism and Climate Catastrophe

September 13, 2019 By David Flemming Vermont has been exploring less traditional means of taking care of our dead for years. Now, some climate alarmists are suggesting that...

“Did It Work?” A Theme Emerges

September 9, 2019 by Rob Roper Henry Epp of VPR has been working on a terrific series of articles under the umbrella theme of “Did It Work?” It...