September 23, 2016 | Supreme Court Reviews
Vermont Supreme Court Considers a Statute and an Administrative Decision That Impact Health Insurance Rates
In In re MVP Health Insurance Company, 2016 VT 111, the Supreme Court found that a statute delegating authority to the Green Mountain Care Board (GMCB) to review health insurance rates was constitutional, but that the GMBC had failed to follow the statutory standards in denying a health insurance company’s proposed rates.
Issue: Under 8 VSA 4062, the Green Mountain Care Board has authority to review and approve/deny health insurance rates in Vermont. A company providing health insurance to farmers submitted its rates to the GMCB and was denied. It challenged the denial before the Supreme Court, arguing: 1) the denial was an arbitrary exercise of discretion based on an unconstitutionally vague statutory delegation of legislative duty; 2) the denial was not supported by the record; and 3) the decision was based on an erroneous interpretation of its statutory grant of authority.
Holding: The Court first addressed the constitutionality of 8 VSA 4062, noting that “duly enacted laws represent an improper delegation of the Legislature’s law-making function only if they are devoid of any conceivable standard to guide and constrain discretion.” The Court conducted an overview of its own prior case law, and looked at a number of cases from other states, to confirm that there is a fairly low threshold – are there “’any standards’ for the exercise of discretion”? – to find that a delegation of legislative authority is constitutional. Here, the Court found that GMCB’s authority under the statute is “curtailed by considerations of affordability, the promotion of quality care and access to care, insurer solvency, and fairness, as well as by the requirement that it consider the opinion of the Department of Financial Regulation.” Therefore, even though the terms were general and open-ended, there were standards for the exercise of discretion, and the Court upheld the statute as constitutional. The Court then, however, considered GMCB’s actual denial. Despite noting that GMCB’s decision was entitled to deferential review, the Court found that the denial “failed to provide adequate basis for review” because it “both failed to explain how the proposed rate did not promote access to quality healthcare and was unfair, unjust, and inequitable to plan members while simultaneously ignoring the relevant evidence and basing its decisions on factors ‘that have no nexus [to] the proposed rates.’” As such, the Court reversed and remanded for GMCB to make specific findings based on the statutory factors.