AM Best Removes From Under Review With Negative Implications and Affirms Credit Ratings of Blue Cross and Blue Shield of Vermont and Its Subsidiary
The Credit Ratings (ratings) reflect BCBSVT Group's balance sheet strength, which AM Best assesses as weak, as well as its marginal operating performance, limited business profile and marginal enterprise risk management.
The negative outlook assigned to the Long-Term ICRs reflects AM Best's concern regarding the continued pressure on BCBSVT Group's balance sheet strength driven by very weak risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), and deteriorating balance sheet strength metrics due to sizable operating losses through 2024.
BCBSVT Group's balance sheet strength remains challenged due to the group's level of capital, both absolute and risk-adjusted, which has declined over the past few years. BCBSVT's capital and surplus was supported in late 2024 with a surplus note issued by Blue Cross Blue Shield of Michigan Mutual Insurance Company, an affiliated company. Even with the surplus note, the company remains under a capital restoration plan by Vermont's Department of Financial Regulation. As a result of the surplus note, the overall quality of capital has declined, as over 50% of capital is in the form of a surplus note. Additionally, liquidity metrics have had a declining trend from 2020 to 2024, driven by poor underwriting performance.
BCBSVT Group has reported underwriting losses in four out of the past five years driven by higher utilization, as well as medical and pharmacy costs, which have been higher than expected. All insured segments were impacted negatively by higher medical and pharmacy claim trends in 2024. The company is focused on improving underwriting profitability via rate increases and other initiatives that should lead ultimately to an increase in its capital position.
The limited business profile reflects the challenging regulatory environment in Vermont, with the Department of Financial Regulation overseeing regulatory capital while the Vermont Green Mountain Care Board has oversight on rate increases. The objectives of the two regulatory authorities have a history of not being aligned, which historically has hindered BCBSVT Group's ability to obtain requested rate increases. BCBSVT Group maintains a large market share in Vermont, where a large majority of businesses are small in scale, and maintains a large presence in the Affordable Care Act marketplace. However, the group faces limited competition in these markets due to few companies participating.
This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
2 hours ago
Trump branded, browbeat and prevailed. But his big bill may come at a political cost
WASHINGTON -- Barack Obama had the Affordable Care Act. Joe Biden had the Inflation Reduction Act. President Donald Trump will have the tax cuts. All were hailed in the moment and became ripe political targets in campaigns that followed. In Trump's case, the tax cuts may almost become lost in the debates over other parts of the multitrillion-dollar bill that Democrats say will force poor Americans off their health care and overturn a decade or more of energy policy. Through persuasion and browbeating, Trump forced nearly all congressional Republicans to line up behind his marquee legislation despite some of its unpalatable pieces. He followed the playbook that had marked his life in business before politics. He focused on branding — labeling the legislation the 'One Big, Beautiful Bill' — then relentlessly pushed to strong-arm it through Congress, solely on the votes of Republicans. But Trump's victory will soon be tested during the 2026 midterm elections where Democrats plan to run on a durable theme: that the Republican president favors the rich on tax cuts over poorer people who will lose their health care. Trump and Republicans argue that those who deserve coverage will retain it. Nonpartisan analysts, however, project significant increases to the number of uninsured. Meanwhile, the GOP's promise that the bill will turbocharge the economy will be tested at a time of uncertainty and trade turmoil. Trump has tried to counter the notion of favoring the rich with provisions that would reduce the taxes for people paid in tips and receiving overtime pay, two kinds of earners who represent a small share of the workforce. Extending the tax cuts from Trump's first term that were set to expire if Congress failed to act meant he could also argue that millions of people would avoid a tax increase. To enact that and other expensive priorities, Republicans made steep cuts to Medicaid that ultimately belied Trump's promise that those on government entitlement programs 'won't be affected.' 'The biggest thing is, he's answering the call of the forgotten people. That's why his No. 1 request was the no tax on tips, the no tax on overtime, tax relief for seniors,' said Rep. Jason Smith, R-Mo., chairman of the tax-writing House Ways and Means Committee. 'I think that's going to be the big impact.' Presidents have seen their signature legislative accomplishments unraveled by their successors or become a significant political liability for their party in subsequent elections. A central case for Biden's reelection was that the public would reward the Democrat for his legislative accomplishments. That never bore fruit as he struggled to improve his poll numbers driven down by concerns about his age and stubborn inflation. Since taking office in January, Trump has acted to gut tax breaks meant to boost clean energy initiatives that were part of Biden's landmark health care-and-climate bill. Obama's health overhaul, which the Democrat signed into law in March 2010, led to a political bloodbath in the midterms that fall. Its popularity only became potent when Republicans tried to repeal it in 2017. Whatever political boost Trump may have gotten from his first-term tax cuts in 2017 did not help him in the 2018 midterms, when Democrats regained control of the House, or in 2020 when he lost to Biden. 'I don't think there's much if any evidence from recent or even not-so-recent history of the president's party passing a big one-party bill and getting rewarded for it,' said Kyle Kondik, an elections analyst with the nonpartisan University of Virginia's Center for Politics. Democrats hope they can translate their policy losses into political gains. During an Oval Office appearance in January, Trump pledged he would 'love and cherish Social Security, Medicare, Medicaid.' 'We're not going to do anything with that, other than if we can find some abuse or waste, we'll do something,' Trump said. 'But the people won't be affected. It will only be more effective and better.' That promise is far removed from what Trump and the Republican Party ultimately chose to do, paring back not only Medicaid but also food assistance for the poor to make the math work on their sweeping bill. It would force 11.8 million more people to become uninsured by 2034, according to the Congressional Budget Office, whose estimates the GOP has dismissed. 'In Trump's first term, Democrats in Congress prevented bad outcomes. They didn't repeal the (Affordable Care Act), and we did COVID relief together. This time is different,' said Sen. Brian Schatz, D-Hawaii. 'Hospitals will close, people will die, the cost of electricity will go up, and people will go without food.' Sen. Thom Tillis, R-N.C., repeatedly argued the legislation would lead to drastic coverage losses in his home state and others, leaving them vulnerable to political attacks similar to what Democrats faced after they enacted 'Obamacare.' With his warnings unheeded, Tillis announced he would not run for reelection, after he opposed advancing the bill and enduring Trump's criticism. 'If there is a political dimension to this, it is the extraordinary impact that you're going to have in states like California, blue states with red districts,' Tillis said. "The narrative is going to be overwhelmingly negative in states like California, New York, Illinois, and New Jersey.' Even Sen. Lisa Murkowski, R-Alaska, who eventually became the decisive vote in the Senate that ensured the bill's passage, said the legislation needed more work and she urged the House to revise it. Lawmakers there did not. Early polling suggests that Trump's bill is deeply unpopular, including among independents and a healthy share of Republicans. White House officials said their own research does not reflect that. So far, it's only Republicans celebrating the victory. That seems OK with the president. In a speech in Iowa after the bill passed, he said Democrats only opposed it because they 'hated Trump.' That didn't bother him, he said, 'because I hate them, too.'
Yahoo
14 hours ago
- Yahoo
Conservatives huddle with Thune after plan to cut more from Medicaid stalls
A trio of conservatives pushing for an additional $313 billion in federal Medicaid spending cuts marched into Senate Majority Leader John Thune's (R-S.D.) office late Monday night to hash out the next steps for President Trump's megabill after it appeared likely that an amendment to slow the growth of Medicaid was headed for defeat. Sen. Rick Scott (R-Fla.), the sponsor of the amendment to roll back the expansion of Medicaid under the Affordable Care Act, was spotted walking into Thune's office alongside Thune, Senate Republican Whip John Barrasso (R-Wyo.), Senate Finance Committee Chair Mike Crapo (R-Idaho) and Sens. Ron Johnson (R-Wis.) and Mike Lee (R-Utah). Scott, Johnson and Lee held off from supporting a motion to proceed to Trump's 'big, beautiful bill' Saturday in order to negotiate a commitment from Thune and Vice President Vance to support an amendment to slow the expansion of Medicaid. Scott has expressed strong confidence his amendment would pass, but it became evident Monday that it would not muster 50 votes after several GOP senators told The Hill that they would not support it. Sen. Jim Justice ( said he's not comfortable cutting more from Medicaid above the $930 billion in projected federal Medicaid spending cuts already included the 940-page Senate bill. Live updates: GOP stalls for time in vote-a-rama while awaiting key ruling on Trump megabill Justice warned that Republicans might lose their Senate and House majorities if they push Medicaid cuts much further. 'It just seems like we've taken it as far as I'm comfortable taking it,' he said of Medicaid spending cuts. 'And now, we're taking it to another level,' he said of Scott's proposal to bar new enrollees into Medicaid in states that expanded the program from getting the generous 90-percent federal match. 'Here's the thing I'm the most concerned about, and that is — I am hung up on keeping our majorities,' he said. 'At the end of all this, there is a name or a family, you know. And if you don't watch out, you're going to alienate them, and when you alienate them, we're going to go right back to the minority,' he warned. Sen. Josh Hawley (R-Mo.) also told The Hill he would vote against Scott's amendment. Hawley said he received a call from Missouri Gov. Mike Kehoe (R), who pleaded with him not to support cutting another $313 billion from federal Medicaid spending, which would hit states such as Missouri that expanded Medicaid. The huddle came more than 13 hours into a vote-a-rama, an unlimited series of amendment votes. The vote series moved glacially for much of the day as GOP leaders awaited key rulings from the Senate parliamentarian and worked to win over holdouts. Thune walked out of his office about 40 minutes later, telling reporters: 'This is a collaborative process, we're collaborating.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Los Angeles Times
15 hours ago
- Los Angeles Times
Trump branded, browbeat and prevailed. But his big bill may come at a political cost
WASHINGTON — Barack Obama had the Affordable Care Act. Joe Biden had the Inflation Reduction Act. President Donald Trump will have the tax cuts. All were hailed in the moment and became ripe political targets in campaigns that followed. In Trump's case, the tax cuts may almost become lost in the debates over other parts of the multitrillion-dollar bill that Democrats say will force poor Americans off their health care and overturn a decade or more of energy policy. Through persuasion and browbeating, Trump forced nearly all congressional Republicans to line up behind his marquee legislation despite some of its unpalatable pieces. He followed the playbook that had marked his life in business before politics. He focused on branding — labeling the legislation the 'One Big, Beautiful Bill' — then relentlessly pushed to strong-arm it through Congress, solely on the votes of Republicans. But Trump's victory will soon be tested during the 2026 midterm elections where Democrats plan to run on a durable theme: that the Republican president favors the rich on tax cuts over poorer people who will lose their health care. Trump and Republicans argue that those who deserve coverage will retain it. Nonpartisan analysts, however, project significant increases to the number of uninsured. Meanwhile, the GOP's promise that the bill will turbocharge the economy will be tested at a time of uncertainty and trade turmoil. Trump has tried to counter the notion of favoring the rich with provisions that would reduce the taxes for people paid in tips and receiving overtime pay, two kinds of earners who represent a small share of the workforce. Extending the tax cuts from Trump's first term that were set to expire if Congress failed to act meant he could also argue that millions of people would avoid a tax increase. To enact that and other expensive priorities, Republicans made steep cuts to Medicaid that ultimately belied Trump's promise that those on government entitlement programs 'won't be affected.' 'The biggest thing is, he's answering the call of the forgotten people. That's why his No. 1 request was the no tax on tips, the no tax on overtime, tax relief for seniors,' said Rep. Jason Smith, R-Mo., chairman of the tax-writing House Ways and Means Committee. 'I think that's going to be the big impact.' Presidents have seen their signature legislative accomplishments unraveled by their successors or become a significant political liability for their party in subsequent elections. A central case for Biden's reelection was that the public would reward the Democrat for his legislative accomplishments. That never bore fruit as he struggled to improve his poll numbers driven down by concerns about his age and stubborn inflation. Since taking office in January, Trump has acted to gut tax breaks meant to boost clean energy initiatives that were part of Biden's landmark health care-and-climate bill. Obama's health overhaul, which the Democrat signed into law in March 2010, led to a political bloodbath in the midterms that fall. Its popularity only became potent when Republicans tried to repeal it in 2017. Whatever political boost Trump may have gotten from his first-term tax cuts in 2017 did not help him in the 2018 midterms, when Democrats regained control of the House, or in 2020 when he lost to Biden. 'I don't think there's much if any evidence from recent or even not-so-recent history of the president's party passing a big one-party bill and getting rewarded for it,' said Kyle Kondik, an elections analyst with the nonpartisan University of Virginia's Center for Politics. Democrats hope they can translate their policy losses into political gains. During an Oval Office appearance in January, Trump pledged he would 'love and cherish Social Security, Medicare, Medicaid.' 'We're not going to do anything with that, other than if we can find some abuse or waste, we'll do something,' Trump said. 'But the people won't be affected. It will only be more effective and better.' That promise is far removed from what Trump and the Republican Party ultimately chose to do, paring back not only Medicaid but also food assistance for the poor to make the math work on their sweeping bill. It would force 11.8 million more people to become uninsured by 2034, according to the Congressional Budget Office, whose estimates the GOP has dismissed. 'In Trump's first term, Democrats in Congress prevented bad outcomes. They didn't repeal the (Affordable Care Act), and we did COVID relief together. This time is different,' said Sen. Brian Schatz, D-Hawaii. 'Hospitals will close, people will die, the cost of electricity will go up, and people will go without food.' Sen. Thom Tillis, R-N.C., repeatedly argued the legislation would lead to drastic coverage losses in his home state and others, leaving them vulnerable to political attacks similar to what Democrats faced after they enacted 'Obamacare.' With his warnings unheeded, Tillis announced he would not run for reelection, after he opposed advancing the bill and enduring Trump's criticism. 'If there is a political dimension to this, it is the extraordinary impact that you're going to have in states like California, blue states with red districts,' Tillis said. 'The narrative is going to be overwhelmingly negative in states like California, New York, Illinois, and New Jersey.' Even Sen. Lisa Murkowski, R-Alaska, who eventually became the decisive vote in the Senate that ensured the bill's passage, said the legislation needed more work and she urged the House to revise it. Lawmakers there did not. Early polling suggests that Trump's bill is deeply unpopular, including among independents and a healthy share of Republicans. White House officials said their own research does not reflect that. So far, it's only Republicans celebrating the victory. That seems OK with the president. In a speech in Iowa after the bill passed, he said Democrats only opposed it because they 'hated Trump.' That didn't bother him, he said, 'because I hate them, too.' Kim writes for the Associated Press.
