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Bill

H 430

An act relating to allowing health insurance premiums to vary based on age and tobacco usage

2025-2026 Regular Session Introduced by Gina Galfetti and 1 co-sponsor

Vermont allows health insurers to vary premiums by age (up to 3:1) and tobacco use (up to 1.5:1), with total deviations capped and new rules guiding further risk classes.

Read first time and referred to the Committee on Health Care
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WeVote Research Nonpartisan
Bill Summary · H 430

Summary of Bill H.430 (2025-2026) — Vermont

Purpose and intent

  • Allows health insurers in Vermont to vary premiums for individual and small group health plans based on two factors: age and tobacco usage.
  • Replaces broader prohibitions on certain rating methods with a framework that permits limited age- and tobacco-based rating, while preserving affordability considerations.

Key provisions and changes

  • Section 1811 (health benefit plans for individuals and small employers)
  • Prohibited rating factors (existing restrictions):
    • Demographic rating (including age and gender)
    • Geographic area rating
    • Industry rating
    • Medical underwriting and screening
    • Experience rating
    • Tier rating
    • Durational rating
  • New allowed rating framework (subsection (f)(2)):
    • Age-based variation:
    • Premiums may vary by age, but the maximum rate differential by age is limited to 3 to 1.
    • Tobacco-based variation:
    • Premiums may vary based on tobacco use, but the maximum rate differential due to tobacco use is limited to 1.5 to 1.
    • Overall deviation cap:
    • After applying age and tobacco-based adjustments, the premium charged may deviate from the carrier’s filed community rate by up to 20 percent, if applicable.
    • Further rulemaking:
    • The Commissioner of Financial Regulation will adopt standards and processes to permit additional risk classifications beyond age and tobacco, with the constraint that total deviation from the community rate cannot exceed 30 percent after applying age and tobacco adjustments.
    • Rules must not permit medical underwriting or screening when adding new risk classifications.
    • Rules must balance affordability and accessibility of health insurance.
  • Health promotion and cost-sharing adjustments (subsection (f)(2)(B)):
    • Carriers (including hospital or medical service corporations and HMOs) may establish:
    • Rewards, premium discounts, split benefit designs, rebates, or modify cost-sharing (co-pays, deductibles, etc.) in return for member adherence to health promotion and disease prevention programs.
    • Rulemaking considerations:
    • Coordination with the Commissioner of Health, Blueprint for Health, and the Vermont Health Access Commissioner.
    • Caps on rewards and cost-sharing changes:
    • Any reward/discount/rebate or modification of cost-sharing cannot exceed a total of 15 percent of the premium cost for the applicable coverage tier.
    • The total combined deviations from age and tobacco rating, plus any additional adjustments under the new rules, cannot exceed 30 percent.

Affected parties

  • Health insurers operating in Vermont (registered carriers) offering individual and small-group plans.
  • Policyholders and subscribers in these plans, particularly those who are older or who use tobacco.
  • Healthcare regulators:
    • Vermont Department of Financial Regulation (to set and enforce rating standards)
    • Vermont Department of Health (collaboration on health promotion rules)
    • Blueprint for Health and Vermont Health Access program leadership (for alignment on health promotion initiatives)

Effective date and timeline

  • Effective date: January 1, 2026.
  • The bill outlines a phased approach via rulemaking by the Commissioner of Financial Regulation to implement age/tobacco rating and any additional risk classifications, with ongoing coordination among state health agencies.

Potential impacts (high-level)

  • Access and affordability:
    • The 3:1 age rating and 1.5:1 tobacco rating allow differentiated pricing, which could affect affordability for seniors and tobacco users.
    • Overall premium deviations capped at 20 percent (plus up to 30 percent total after all adjustments) aim to limit extreme price differences.
  • Plan design flexibility:
    • Carriers could implement targeted health-promoting incentives (up to 15 percent of premium value) and adjust cost-sharing in exchange for participation in wellness programs.
  • Regulatory oversight:
    • Expansion of risk classification beyond age and tobacco will be governed by new rules to ensure consumer protections and prevent excessive premium variation.
    • Emphasis on affordability and accessibility during rulemaking.

Notes

  • Introduced by Representatives Galfetti and Waszazak (Barre Town/Barre City).
  • Referred to the House Committee on Health Care; first reading occurred February 28, 2025.
  • The bill text as introduced is limited to the outlined rating framework and associated health-promotion provisions; final impact will depend on the adopted regulatory standards.

Compiled from official sources — confirm details with the bill’s official record.

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