Vermont school health insurance premiums are expected to rise by double digits for the third year in a row.
The Vermont Education and Health Initiative, which manages health plans for about 34,000 school employees and their dependents, this week announced plans to increase premiums by an average of 11.9% next year. Although the fees technically won’t be finalized by the Vermont Department of Financial Regulation until January, VEHI will announce them several months in advance so schools can plan accordingly.
As has been the case for years, hospital budgets and rising prescription drug costs are the main reasons for premium increases.
“As long as these are cost factors, the message is always the same,” says Bobbie Jo Salz, VEHI’s trust administrator. “I think to the extent that we’re seeing it, it’s incredible.”
Rising health care costs were one of the main reasons for last year’s brutal school budget cycle, in which nearly a third of the total budget was not spent on Town Meeting Day. Education officials were bracing for another tough budget year and generally expected school employee premiums to roughly mirror the surge seen in large commercial markets.
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Local school officials frequently point to medical costs as a prime example of runaway costs that are beyond their control. A statewide contract sets out how schools and their employees will share the cost of health insurance starting in 2021, and in the latest round of negotiations, the union and school board agreed to extend the current contract through 2027. We agreed to extend it.
The new rates will cost about $40 million more than this year’s plan, Salz said, but some of that will be borne by employees, who typically pay 20% of premiums.
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