Despite new federal limits on who can get a Covid-19 vaccine and the arrival of the cold and flu season, many Vermonters can still get a booster, though details surrounding Medicare reimbursement and federal recommendations remain uncertain.

In a late August post on X, Health and Human Services Secretary Robert F. Kennedy Jr. announced the Food and Drug Administration approved Covid-19 booster shots, but only for those 65 and above or with existing health risks. 

Vermont state officials are now awaiting a recommendation from the Centers for Disease Control and Prevention, which typically guides public health directives and insurers’ coverage, for those who want to get a fall booster shot.  

“Really the best thing that I can recommend is either to go online and see if you can set up an online appointment (for a vaccine), or call pharmacies in your area to see if they’re available,” said Julie Arel, the state’s interim commissioner of health.

In Vermont, pharmacies are moving forward with administering the vaccine. Kinney Drugs and CVS have the updated Covid vaccines in stock. Pharmacies order directly from the manufacturer. Providers — doctors’ offices and other clinics — often get vaccines through the state, which is not yet able to order the vaccines from the CDC. 

Kinney Drugs’ spokesperson Alice Maggiore confirmed that the stores can administer the 2025-26 vaccines to people above 65 and individuals between 12 and 64 who attest to having one of the qualifying conditions, as outlined by the CDC. 

CVS is able to vaccinate anyone over 5 years old, who attests to eligibility under the same CDC’s preexisting conditions list, or anyone older than 65, according to a company executive, Amy Thibault. 

The underlying risks outlined by the CDC range from asthma or a smoking history to mental health disorders, like depression obesity, or physical inactivity. Patients do not need a doctor’s prescription to confirm the underlying condition at Kinney or CVS, both spokespeople said.

Typically, insurers cover vaccines received in a pharmacy. Whether some private and government insurers will be able to cover the vaccines remains uncertain. Even if people can get the vaccine by walking into a pharmacy, it’s unclear if they will have to pay for it:  “It’s a little bit mind boggling,” Arel said. 

Blue Cross Blue Shield of Vermont, the state’s largest private insurer, plans to continue to cover the vaccine for any member, at no cost and with no prior approval, said Andrew Garland, a vice president and spokesperson for the insurer. Blue Cross Blue Shield of VT intends to do so through 2026, as well. MVP, the state’s other private insurer selling plans on the marketplace, also does not anticipate changes in its vaccine coverage policy, said Elizabeth Boody, a spokesperson for the company. 

What employer-sponsored insurers and providers like Tricare, the military health system, might be able to cover, is still unclear.

Since the FDA has already approved the vaccine for those over 65, it is likely that Medicare, which covers the same age group, will cover the vaccines. Dorit Reiss, a vaccine policy expert at the University of California Law, San Francisco, told NBC News that once the FDA approves a vaccine, Medicare has the authority to cover it.

Generally a Covid vaccine undergoes three steps for approval: First the FDA authorizes the new vaccines — which it did in August. Then a panel within the CDC called ACIP (short for Advisory Committee on Immunization Practices) issues a recommendation on the vaccine. It is scheduled to meet Sept. 18-19, to do so. This year many are holding their breath ahead of ACIP’s announcement, since Kennedy gutted the panel and replaced it with many vaccine skeptics. 

The state is weighing whether and how it will need to break from that typical process, and is currently exploring what Vermont statute allows for breaking with that process.

While it is quite common for providers to prescribe a drug outside of what the FDA has authorized them for, it’s not typical, however, for that to happen with vaccines. The FDA’s lack of formal guidance on what qualifies as an underlying condition leaves room for interpretation surrounding who qualifies for the vaccine.

“There’s some flexibility in there, but because it’s not as clear as usual, there is going to be hesitancy, in all likelihood,” said Arel. “And anytime there’s hesitancy, anytime there’s confusion, it’s going to lead to lower immunization rates. We really want to try to avoid that.”

The Department of Health is also looking to Vermont’s neighbors in the Northeast for direction, Arel said. In August, the department joined with other state health departments in the region to build a coalition ready to respond to shifts in federal guidance. Though the group has no unified recommendation, she says it’s something they are considering to help mediate the current disjunctive state of vaccine recommendations and approvals. 

“If as a region, we can become more aligned, it helps people across the whole Northeast region to feel a level of confidence in their state public health department’s decisions and how we’re moving forward,” she said.

In Massachusetts, Gov. Maura Healy required in-state insurance carriers to cover the vaccines recommended by the state’s Department of Public Health, even if they are outside of the federal recommendations. The state’s commissioner of public health also issued a standing order that allows pharmacists to issue Covid shots to anyone over the age of 5. 

In response, Arel said Vermont is watching its neighbors and looking into where state statute might allow for potential action. 

“Getting clarity and having a message be clear and simple, is going to be the most important thing we do,” Arel said. “Unfortunately, we are still working through all of that, but we are committed to finding our way through it and making it as simple and easy as possible.”

Read the story on VTDigger here: As feds tighten Covid vaccine rules, Vermont works to maintain access .

Vermont hospitals presenting annual budgets in public hearings this month largely aligned their proposals with state regulatory guidelines or suggested even lower or negative growth rates. That’s a marked difference from the last two years when most hospitals’ requests exceeded the benchmarks for budget growth set by the Green Mountain Care Board.

Staff and board members at the state’s top health care regulator, alongside health care leaders, have been immersed for two weeks in hearings to review 2026 budget requests for the 14 hospitals under the board’s regulatory purview. The fiscal year for hospitals in the state begins Oct 1. 

The annual hospital budget hearings are transpiring amid an ongoing health care affordability crisis, with the state’s largest insurers teetering on the edge of insolvency and Vermonters bearing the highest health care premiums in the country in recent years. 

The state’s top health care regulator is reviewing three metrics within hospital budgets this year. The board asked hospitals to limit the increase in their net patient revenue — the amount of earnings through patient service without uncompensated care and other deductions — to 3.5% or below this fiscal year, and set a rate of 3% for growth in operational expenses. 

Most critically for Vermonters’ private health insurance costs, the care board set a benchmark of a 3% increase in the amount hospitals can charge commercial health insurers this fiscal year.

The high cost of health insurance in Vermont reflects the overall high cost of health care in the state, and the decisions of insurers, hospital and regulatory health care leaders, Vermont’s Chief Health Care Advocate Mike Fisher said in an interview Thursday. All these factors impact Vermonters’ ability to afford the care they need and can lead to people being priced out of care, he said.

The Green Mountain Care Board also reviews proposed price increases for certain types of commercial health care plans in Vermont. Those increases are often directly influenced by hospital budgets. The board held hearings on state insurance rates last month, and plans to decide on whether to grant Blue Cross Blue Shield of Vermont and MVP rates requests on Aug. 22, according to board spokesperson Kristen LaJeunesse.  

A new state law capping how much hospitals can charge private health insurers for certain outpatient pharmaceuticals is likely the largest influence on the coming year’s budget proposals, Emma Runia, an analyst for the Green Mountain Care Board, said last week. 

The new price restrictions apply primarily to injectable and IV-administered drugs for immunotherapy and cancer treatment and go into effect Jan. 1, 2026. Preliminary board staff analysis found that the price caps will reduce revenue for affected hospitals by approximately $100 million collectively. A large majority — around $70 million — of the dollar impact will fall on the University of Vermont Medical Center, the only academic medical center in the state. 

Vermont’s critical access hospitals — a federal designation for small hospitals in rural areas — are exempt from the legislation’s impact unless they belong to a hospital network. 

That measure and other new legislation, including a move towards reference-based pricing, are positive steps forward, Fisher said. 

In a recent letter, an independent liaison group suggested the care board limit commercial pricing for all hospital services to 500% of the Medicare rate. While Fisher said he appreciates the group putting forward a starting concept for a cap on health services charges, he said it may take a couple of years to determine what counts as a reasonable upper limit to prevent excessive charges.

With hearings closing out on Wednesday, the Green Mountain Care Board will review the information and ultimately make a decision to accept, reject or adjust to hospitals’ requests by Sept. 15. 

Michael Del Trecco, president and CEO of the Vermont Association of Hospitals and Health Systems, urged the board to support the hospitals’ “lean” budget requests on Aug. 5 at the onset of hearings. He said Vermont hospitals are taking measures to address the state’s health care affordability crisis, such as the University of Vermont Health Network announcing cost-saving measures like layoffs late last month to meet its proposed 2026 budgets. 

“We need payment models that are fair and sustainable and that create the right incentives. Just having rate restrictions is not viable,” Del Trecco said. “I truly believe reductions beyond what has been submitted will challenge transformation efforts and the ability for hospitals to meet the needs of their communities.”

Fisher said addressing the health care affordability crisis and pricing across in the state will require a concerted effort from health care leaders over many years. 

While Vermonters often view hospital budgets in terms of access to services in their local communities, the annual budgetary decisions are felt across the statewide health care system, he said. 

“I know that communities recognize how important their community hospital is in terms of people being able to get the care they need and in terms of the economic engine that hospitals represent for every community,” Fisher said.

“This decision on how much to give hospitals across Vermont has a direct bearing on, to what degree more Vermonters are priced out of the ability to get care,” he said. 

Hospital budget proposals

Almost every hospital with budgets regulated by the Green Mountain Care Board either met or came in under benchmarks set by the board this year, according to a staff analysis of hospital submissions presented on Aug. 5. The hospitals’ rate requests are subject to change through the hearing process and beyond. 

The largest community hospital in Vermont — Rutland Regional Medical Center — requested a 2.8% increase to operating expenses, a 1.7% decrease to net patient revenue and 3.7% decrease to charges to commercial insurers. 

Northwestern Medical Center requested a 3% increase to operating expenses, a 2% decrease to net patient revenue, and a 2.6% increase to commercial insurance rates. 

Southwestern Vermont Medical Center proposed a 2.4% increase to operating expenses, a 1.9% increase to net patient revenue and 3% increase to commercial rates. 

While facing significant budgetary shortfalls in the current fiscal year, Brattleboro Memorial Hospital sought increased rates at last week hearings, including a 1.8% increase to operating expenses, a 1.7% increase to net patient revenue and a 3% increase to commercial rates. 

The three hospitals that requested rates above the regulator guidance are all critical access hospitals: Springfield Hospital, Mt. Ascutney Hospital & Health Center and Copley Hospital. 

Springfield Hospital requested a 8.3% increase to net patient revenue, a 10% increase to operating expenses, as well as a 3% increase to commercial rates. Mt. Ascutney Hospital & Health Center in Windsor requested a 3.5% net patient revenue, a 5.3% increase to operating expenses and 3% increase to commercial rates. 

Copley Hospital in Morrisville asked for a 3.7% decrease to net patient revenue, a 1.6% increase to operating expenses and a 4.2% increase to commercial rates to insurers. 

But one critical access hospital — Gifford Medical Center in Randolph — requested no change to its operating expenses, a 2.5% decrease to its net patient revenue and a 3% increase to commercial rates from the current fiscal year. 

Two of University of Vermont Health Network’s hospitals also requested decreased rates to charges to commercial insurers for the coming fiscal year, mostly due to recent legislation capping outpatient-administered injection drugs. The network’s critical access hospital — Porter Medical Center in Middlebury — requested increased rates for net patient revenue and commercial rates at the regulator’s benchmark and below the benchmark for operating expenses. 

There were no hearings for Grace Cottage Hospital, North Country Hospital and Northeastern Vermont Medical Center, as the board accepted the three critical access hospitals’ budgets with rate requests that all fell below the board’s benchmark increases. 

Correction: An earlier version of the caption to the screenshot accompanying this story misstated the number of Green Mountain Care Board members pictured.

Read the story on VTDigger here: Amid health insurance affordability crisis, most Vermont hospitals seek moderate budget changes at annual hearings.

This commentary is by Julie Wasserman of Burlington, an independent health policy consultant who worked for Vermont state government for over 25 years.

Vermonters cannot afford their current health care costs. How then could they afford Blue Cross Blue Shield’s proposed double-digit increases? For the coming year, BCBSVT has requested rate increases for both its Individual Plans (23.3%) and its Small Group Plans (13.7%) as it faces insolvency. This comes on top of BCBS’s double-digit health insurance premium rate increases in each of the last three years.

BCBS’s Average Annual Rate Increase Over Prior Year

The Green Mountain Care Board and Blue Cross Blue Shield agree that the insurer could shrink this year’s request to a 5% increase if Vermont reduced its health care spending by roughly $200 million in the upcoming year or enacted a decrease in hospital commercial prices, or some combination of the two.

But hospitals claim a reduction in their spending or a decrease in hospital commercial prices would force them to cut staff or services.

Hospitals have long asserted they would need to cut patient services in order to reduce costs — but we now know hospitals do not need to cut services to reduce costs. Hospitals can reduce costs in non-patient domains such as public relations, lobbying, marketing, executive salaries, executive bonuses, layers of administration and management, consultants, unnecessary capital expansion and use of financial reserves. Regarding financial reserves, hospitals’ “unrestricted cash” is a ready source of available funds that can be utilized to prevent cutbacks in patient services.

UVM Medical Center and UVM Health Network have over $1.1 billion in unrestricted cash on hand. As GMCB Chair Owen Foster testified at the recent May 21st House Health Care Hearing, unrestricted cash is composed of “Cash and cash equivalents,” “Short-term investments” and “Board-designated assets.” Each of these three line items is listed under the column headings “UVM Medical Center” and “UVM Health Network” on slide 4, which add up to $1.1 billion (the values presented are in the thousands; for example, $234,246 is $234,246,000). This is essentially money in the bank, to be used during difficult times. 

If UVM Medical Center and UVM Health Network wanted to be heroes, they could simply write a check for the $200 million needed to reduce this year’s BCBS rates to 5%. Alternatively, UVM could write a smaller check supplemented by reduced UVM Medical Center hospital prices since its highest prices in the nation (slide 116) have contributed to BCBS’s ever-rising premiums and potential insolvency. 

The Green Mountain Care Board has the authority to reduce hospital rates enough to result in much lower insurance premium rate increases. For Vermonters’ sake, the Board needs to exercise that authority. Our current crisis demands bold solutions.

Read the story on VTDigger here: Julie Wasserman: Vermonters cannot afford their current health care costs.

This story by Joyce Marcel was first published in The Commons on July 8.

BRATTLEBORO — Much of Windham County depends for its health care services on Brattleboro Memorial Hospital, which has been weathering what already was a financial crisis.

And then everything changed on July 3, when Congress passed the One Big Beautiful Bill Act.

The bill, which President Donald Trump signed into law on July 4, may cause some 45,000 people in Vermont to lose their health insurance over the next several years, according to initial estimates from the Vermont Agency of Human Services.

And one academic health-care policy study predicts that two other hospitals just over the Vermont state border — one in New Hampshire and the other in Massachusetts — are at risk of closing as a result of the new law.

“I don’t know what to say, except this bill is vicious, and it does, I believe, disproportionately affect rural community hospitals,” said Christopher J. Dougherty, president and CEO of Brattleboro Memorial Hospital. “And rural community hospitals don’t need any more help to create challenging financial times. It’s there already.”

Rural hospitals mean a great deal to their communities, and Brattleboro Memorial Hospital is no exception.

“This is not just a hospital,” Dougherty said. “We’re also the largest employer in this community, so we add to the economics of this community.”

And for people looking to move to the Brattleboro region, “they want a hospital close by,” he continued. “They want an emergency room. If they’re of childbearing ages, they want labor and delivery rooms.”

Dougherty believes that rural hospitals “are the bedrocks of rural communities — not just as a hospital, but also really as an economic driver.”

As vital as they may be, America’s rural hospitals are struggling financially. The reasons are complex, but they include everything from the constantly rising costs of health insurance, pharmaceuticals, and staffing to the meager reimbursement the federal government offers for Medicaid and Medicare patient services.

Yet on July 3, Congress passed the One Big Beautiful Bill Act, which, according to the Congressional Budget Office’s latest cost estimates, will reduce federal Medicaid spending by $793 billion and increase the number of uninsured people by 7.8 million, according to an analysis from KFF, formerly the Kaiser Family Foundation, which describes itself as an “independent source for health policy research, polling, and news.”

The federal program distributes money to states to administer as benefits for residents who qualify, based on family income or disability status. The funds subsidize some or all medical costs for a variety of needs.

Medicaid dollars don’t go directly into the pockets of individuals. Rather, the program funds initiatives like Dr. Dynasaur, which supports Vermont children from prenatal care for the mother to a child’s teen years. Medicaid covers long-term care, supports people with disabilities, prescription assistance and other programs.

The program has been highly politicized, Dougherty said.

“I don’t think the decisions that are being made are based on facts,” he said. “One of the things that is claimed — and I want to say ‘claimed’ — is that there’s all this fraud in Medicaid, $700 billion worth of fraud. I’m sorry, I don’t believe that’s even possible.”

Proponents of the legislation have “tried to take a narrative that this is all about fraud and waste, but I think it’s all about the most vulnerable among us,” Dougherty said.

Meanwhile, the legislation is not only an attack on them. It’s “also going to destabilize hospitals, especially rural community hospitals,” he observed.

Michael Del Trecco, the president and CEO of the Vermont Association of Hospitals and Health Systems , told The Commons that the sharp cuts to Medicaid coverage in Vermont would challenge the entire health care system.

“First, it would be very problematic for individuals and their families,” said Del Trecco, whose private, member-owned organization is devoted to “improving the health status of communities throughout Vermont,” according to its website.

“And then, second, generally speaking, there are funding mechanisms in the state that would jeopardize organizations’ abilities to care for and treat people,” Del Trecco continued. “We need to be paid sufficiently to manage our operations while we engage in all of the operational efficiency opportunities that are in front of us. It’s a very difficult, continuous situation.”

Hospitals face ‘strong financial headwinds’

Like most rural hospitals, Brattleboro Memorial Hospital is already struggling financially; it recently cut six administrative posts as part of an effort to reduce its $119 million annual budget by $4 million without reducing patient services.

Medicaid represents about 20% of Brattleboro Memorial Hospital’s volume and 15% of its revenue, according to Dougherty.

“We are extremely concerned about the impact of the One Big Beautiful Bill Act on Brattleboro Memorial Hospital for a number of reasons,” Dougherty said.

First, “all Vermont hospitals are already facing very strong financial headwinds,” he explained. “This bill will make massive cuts to Medicaid. It is estimated that Vermont hospitals will lose $1.7 billion in federal health care funding over the next decade.”

The hospital will face reduced Medicaid reimbursements, loss of coverage for low-income patients, and an increased uncompensated care burden, he said.

Another complication from the bill is that it would reduce the hospital’s provider tax — a $6.6 million burden — by 0.5% each year. While that reduction is welcome, it also means that the state Medicaid program will lose funding from each hospital’s provider tax and the federal matching program for the tax payments.

“This is a substantial amount of funding, and it will have to be made up for somewhere,” he said.

The act does have funds for rural hospitals, clinics, and opioid treatment programs, Dougherty said, but “while these funds will offer the potential for some short-term assistance, the bill does not compensate for the long-term financial damage caused by the Medicaid reductions. This bill exacerbates an already tenuous situation.”

Small hospitals may face staff layoffs, service eliminations and, in the worst cases, complete closure.

Becker’s Hospital Review, a media source for health care decision-makers, estimates that 760 hospitals nationally will be at risk of closure.

It predicts that in Vermont, eight hospitals will be at risk of closing and one is at immediate risk of closing in the next two to three years.

Becker’s reported that across the U.S., 16.1 million people living in rural communities are covered by Medicaid. In nine states, over 50% of the Medicaid population lives in rural communities in Montana, South Dakota, Wyoming, Mississippi, Vermont, Kentucky, North Dakota, Alaska and Maine. Approximately 47% of rural births in the U.S. are covered by Medicaid.

Since approximately 65% of nursing home residents in rural areas are covered by Medicaid, it also makes no sense to say that a Medicaid recipient should just get a job and pay for private insurance.

Yet Speaker of the House of Representatives Mike Johnson, a Louisiana Republican, said on May 25 on CBS’s Face the Nation, “If you are able to work and you refuse to do so, you are defrauding the system.”

According to a letter sent by U.S. Sen. Ed Markey, D-Mass., to Trump, Johnson and Senate Majority Leader John Thune, R-S.D., “Addressing the crisis in rural health care access is a national, bipartisan priority, and it should be bipartisan to not worsen it. However, if your party passes these health care cuts into law, Americans in rural communities across the country risk losing health care services and jobs supported by their local hospitals.”

Markey appended a detailed list naming all the hospitals he estimates will have to close their doors if and when they lose Medicaid reimbursement, citing an analysis by Cecil G. Sheps Center for Health Services Research at the University of North Carolina.

Among them are two nearby hospitals — Baystate Franklin Medical Center in Greenfield, Massachusetts and Cheshire Medical Center in Keene, New Hampshire.

Fighting for survival

According to Owen Foster, the president of the Green Mountain Care Board, which regulates hospital budgets in the state, all Vermont hospitals are fighting for survival in one way or another. He paints a bleak picture.

In most (though not all) of the state’s hospitals, “you have a number of challenges all at the same time, and one is deteriorating hospital finances across the state,” Foster said. “And Brattleboro is one that is facing those challenges right now.”

At the same time, “you also have some of the highest commercial health care costs in the country,” he continued. “And you have no capacity for your patients and your small businesses or your business community to pay more in health care costs. We’ve maxed out our health care costs for our people.”

It’s difficult, he said, for hospital finances to rebound in Vermont with no capacity to increase commercial prices.

“You’ve probably seen the headlines that the commercial insurance costs have been going up [10 to 15%] every single year for the last several years,” Foster said. “Right now, Blue Cross is requesting a 23% rate increase for the individual group insurance market. But people can’t afford to pay 23% more. If people can’t afford to pay 23% more, they can’t afford to pay Brattleboro Memorial Hospital higher prices to solve the financial challenges they have.”

In addition, the coming federal changes to Medicaid will have a large impact.

“If you have uninsured people, it often results in bad debt or free care,” Foster said. “And the subsidies for the qualified health plans change, which could also limit the number of people on commercial insurance.”

Even before the bill, Blue Cross Blue Shield has been threatening bankruptcy.

“The insurer finances are probably more challenged and strained right now than any hospital financials,” Foster said. “Blue Cross Blue Shield has been put under incredible financial stress in the last year. Their reserves have been significantly depleted, so they have no money to pay out, either. And that’s a challenge. There’s really nowhere to get more money.”

All these things combine to put a significant strain on hospital finances, Foster said.

“So the long and short of it is there’s really no horizon that we see where there’s a significant financial injection to solve for the financial challenges people have,” he said.

Cutting costs

Dougherty took on the job of running Brattleboro Memorial Hospital three years ago. According to Foster, he is the right man for the job.

“Brattleboro has had a tough year,” Foster said. “There’s no question about it. But I’m not alarmed, more than I am for any other number of hospitals in Vermont that have challenging financials.

“Part of it is that I’m very supportive of the work that Chris Dougherty is doing. And I think it’s done with the greatest of intention to make sure that Brattleboro Memorial Hospital is there to serve the community in the years ahead. They’re taking a lot of really important steps to try and address their challenges.”

Del Trecco, of the VAHHS, said Dougherty is dedicated to making sure the Brattleboro hospital is “there today and in the future” and believes in budget-cutting and looking for operational efficiencies both in clinical and nonclinical services.

“The work is not easy and often communities can be concerned, as they rightly should be,” he continued. “But we need to make sure we do this work together. For Chris and his team, the goal was to make sure Brattleboro Memorial Hospital is viable and there for years to come, and I think he’s doing a really great job.”

Two terrible things can happen to hospitals, Dougherty said, and one of them has already happened to the hospital: staff cuts.

Dougherty said it was painful to cut the six administrative positions, putting “great people” out of a job.

“It’s not something we’re proud of,” he said. “It’s not something we’re excited about. We’re really sad about any type of layoff.”

The other terrible thing would be closing all or a part of the hospital. Copley Hospital in Morrisville is closing its birthing center because of unsustainable long-term costs and declining birth rates across the region, he said.

“We’re saying we’re not going to do something like that,” Dougherty said. “I’ve got to tell you, we’re fighting to say ‘We can’t go that route.’ We’ve got to do everything up to the point of eliminating a service. It would be devastating to this community to eliminate any of our services. So we’re looking at everything else possible short of that.

“Closure, in our mind, is absolutely not an option, and everything needs to be done to reinvent, because there’s always a fork in the road; it’s either closure or reinvention,” he continued.

As an example, Dougherty cited Blockbuster Video, which had almost 9,100 locations in 2004. After the rise of streaming video and a string of corporate bankruptcies over the years, all that remains is one lone independently owned franchise in Oregon.

“They didn’t change who they were and what they were doing, and they ended up closing,” Dougherty said. “In contrast, if you look at Netflix, they started out by just emailing DVDs. And look at what they’ve done. They’ve revolutionized streaming and things like that, because they reinvented themselves.

“This is what we’re doing. Unfortunately, some of that reinvention is painful. We have to become more cost efficient and more streamlined, and that’s where those layoffs came to be,” he continued.

Everyone deserves treatment

Vermont law states that hospitals have to serve everyone who “walks in the door,” Dougherty said. That means treating people who have insurance as well as people who don’t.

And Brattleboro Memorial Hospital would do that even without the law, according to Dougherty. But add a flood of now-uninsured former Medicaid patients to those already walking in the door of the Emergency Department, and the finances get tricky.

“Somebody has to pay for it,” Dougherty said. “The question is who. […] Well, if it’s the hospitals, we’re struggling already. We don’t need any help to struggle more. We need help in getting out of this. [The One Big Beautiful Bill Act] doesn’t help us get out of this.”

Until July 1, the hospital contracted with Cheshire Medical Center, which “has been staffing our emergency room and doing a tremendous job for quite some time,” Dougherty said. “They have decided that they can no longer extend that coverage to us.” A new provider, BlueWater Health, of Maine, has taken over.

Emergency department staff already live and work in the hospital area, but they now work for BlueWater instead of Cheshire.

Sometimes, the department has more patients than it can safely handle.

“This last week, we’ve been in what is called a surge mode,” Dougherty said, meaning that patients in the emergency department exceeded the number of rooms.

“So it’s not necessarily a staffing problem. Part of the problem is the flow of patients. Last week, for example, we were having days with eight to 10 mental health patients that we couldn’t move out of the emergency room. It wasn’t safe for them to just be discharged home,” he said.

“So then trying to find the right place for them to go to is a problem, not just at Brattleboro Memorial Hospital, but in every hospital. We’re not mental health experts. We can’t do a whole lot for them, but there was nowhere else for them to go.

On a recent morning, “we were close to being at surge, but we had some patients who could get to long-term care facilities, or even admitted to our hospital,” Dougherty said.

The future

What the area lacks most is primary care, but a private practice is expensive to open and to operate. Dougherty said that Brattleboro Memorial Hospital is working to expand primary care in the county.

“There’s a federal program that Sen. Bernie Sanders is incredibly supportive of, and it’s called the Federally Qualified Health Center system,” Dougherty said. “There are several around. Actually, every county in Vermont has a federally qualified health center except Windham County.”

Before Dougherty arrived in 2022, Sanders got “some congressionally designated funds to build a federally qualified health center in Windham County. He wants a Federally Qualified Health center in every county in Vermont. So we’re embracing that.”

Hospitals cannot be federally qualified health centers, which provide primary care, dental care and outpatient mental health care.

“So the closest one in Vermont is in Springfield,” Dougherty said. “There’s also a close one in Massachusetts [in Greenfield]. We’re hoping one of them will actually work with us to build a federally qualified health center here and provide those three key things that we need desperately in this community.”

The beauty of the federally qualified health centers is that they focus on taking care of Medicaid patients and uninsured patients first and foremost.

“So everybody has access to primary care, dental care, and outpatient mental health services,” Dougherty said.

“We’re also working with the Brattleboro Retreat to provide the outpatient mental health services,” he continued. “Our hope is that maybe as soon as January, we will actually have a federally qualified health center here at Brattleboro. It may be on campus. It may be in three separate sites.”

No single ‘magic tactic’

In response to the potential of a significant federal cutback in Medicaid, the state has been looking for ways to enhance the Medicaid program, Dougherty said.

“Let’s give a little credit to the state,” Dougherty said. “The state is actually looking at ways of enhancing the Medicaid program, I think because of these concerns of what’s happening with federal dollars.”

The Green Mountain Care Board and the Agency of Human Services are exploring a hospital global budgeting payment for 2026, which will transition hospitals from fee-for-service to a fixed amount to cover a defined set of services. Dougherty said that Brattleboro Memorial Hospital is “evaluating this.”

“It may be this is a good way to approach Medicaid and to prepare us for the future of the way health care is going to be reimbursed,” he said.

“We met with them once to talk about their hospital global budgeting program for Medicaid. We have until October to volunteer to be in that program come Jan. 1. And we may very well want to do that,” said Dougherty, who called it a “win-win.”

“It would be good for the state because it gives them a very specific way of administering the Medicaid program. But it may also be good for us and our community, because it gives us sort of a fixed income for our Medicaid patients,” said Dougherty, adding that the program could become mandatory by 2030.

Dougherty said he also had “about 40 other tactics” he was exploring to cut costs and reduce his budget.

“I wish I could tell you there was one magic tactic that gets us right to where we want to be, but there isn’t,” he said. “So we’re trying everything. And some are small and some are large. Some have no impact on staff, basically, and some have.”

What Brattleboro Memorial Hospital desperately wants to do is avoid cutting any medical services.

“We don’t want that to happen,” Dougherty said.

According to Foster at the Green Mountain Care Board, there is enough money in the health care system to provide a high-caliber, high-quality system.

“The problem is that we have a system that doesn’t work well and doesn’t function well,” he said. “We don’t have many low-cost providers in the state, and we need to make sure that we have those available. Those are often small practices. They are primary care practices, independent practices, generally. Those are the most expensive places to provide care.

“Vermont, as compared to other states, has overwhelmingly concentrated our care at hospitals. And that’s not a recipe for sustainability.”

The state needs more telemedicine, Foster said. It needs to consolidate some services. It needs to reduce discretionary spending. It needs to encourage and support smaller, more affordable practices.

Closing Brattleboro Memorial Hospital ‘not an option’

Could the hospital go under?

“I dearly hope not,” Foster said. “There are some really good people there and some really good providers, and they’re really important to the community.”

Foster said that “a lot of Vermont’s challenges are things that we’ve seen across the country. There have been rural hospital closures by the hundreds across the nation. We’ve had no hospital closures in Vermont.”

“Rural hospital markets have been decimated across the country. In Vermont, we have not yet had that,” he continued. “A big part of it is a lot of people working really hard, but also the commercial market subsidizing prices.”

He added that “there’s always risk to any small rural hospital in America, and Vermont is certainly not immune to that, especially given the potential federal changes and the realities at Blue Cross Blue Shield, and with our people’s inability to pay more in health care costs.”

For Dougherty, closing Brattleboro Memorial Hospital is not an option.

“(The hospital) is fighting,” he said. “We actually do need to be a less expensive hospital than we are. And we are going to do everything necessary to keep this treasured resource in this community.”

Dougherty said that hospital leadership knows “that some of those things are going to be painful, and we’ve started on some of those things that are painful, like reductions in force. But I do believe there are some things that really are very much glimmers of hope.”

One glimmer of hope is new revenue enhancement, and Dougherty points to Brattleboro Memorial Hospital’s new, faster magnetic resonance imaging machine to replace a 17-year-old device that “was way beyond years of obsolescence.”

“We invested in that MRI because it generates a revenue for us,” he said. “This new MRI is a good thing for our community.”

“We are trying to think way out of the box and try and find other revenue streams,” Dougherty said. “There has to be hope.”

Read the story on VTDigger here: Brattleboro Memorial Hospital braces for federal cuts to Medicaid.

The Green Mountain Care Board approved double-digit increases to the premium rates that Vermont’s biggest health insurance provider can charge large employers next year.

Vermont’s main health care regulator will allow Blue Cross Blue Shield of Vermont to increase the cost of health insurance premiums for Vermont employers with more than 100 employees by an average of 13.7% in 2026, according to a press release from the Green Mountain Care Board. The rate increase is expected to affect just under 5,000 people in the state.

The approved rate increase for the same category of plan for 2025 was 8.4% on average.

“We are committed to ensuring that health insurance rates are as affordable and fair for Vermonters as possible while balancing the need for insurer solvency and access to care,” Owen Foster, Chair of the Green Mountain Care Board, said in the press release. 

The care board’s role in setting premium rate increases for plans sold to large employers is different than it is for those sold on Vermont Health Connect, the state’s Affordable Care Act marketplace, to individuals and smaller employers. 

For plans sold to large employers, the board’s rate decision serves as a baseline for premium rate increases, which are also influenced by the demographics of the particular group being insured and the group’s history of claims. Vermont law does not allow those factors to be considered to establish pricing for individual and small group plans.

As a result, the care board’s decision does not correlate as directly in the case of large groups to actual rates paid by employers. 

Blue Cross Blue Shield of Vermont is facing significant financial challenges brought on by a surge in the cost of health care claims over the past several years. In response, Blue Cross Blue Shield and the state’s other major insurer, MVP, have both increased rates significantly, making health insurance costs in Vermont among the highest in the nation. 

Foster pointed to the findings of a study done last year by national consulting firm Oliver Wyman as evidence of the need for major restructuring in Vermont’s health care system to bring costs under control.

“As identified in the Oliver Wyman report, Vermont’s health system requires significant transformation to address gaps in care, ensure provider sustainability, and to protect Vermonters from excessive healthcare costs.”

The rate increase approved by the Green Mountain Care Board represents a reduction from the 17.3% premium hike that Blue Cross Blue Shield Vermont had initially requested for next year. 

Cutting the increase was possible because of recent efforts by the board and lawmakers to clamp down on the prices for hospital-based services and certain prescription drugs, the regulator said. 

According to the press release, the bulk of the reduction is due to the passage of H.266, a law that caps the price that hospitals can charge insurers like Blue Cross Blue Shield of Vermont for outpatient pharmaceuticals. In testimony before lawmakers this year, a spokesperson for the nonprofit insurer projected that the cap would contribute to a reduction of between three and four percentage points on premium increases for next year.

The trimmed rate increase also reflects the Green Mountain Care Board’s enforcement actions against the University of Vermont Medical Center and Rutland Regional Medical Center related to their earnings from 2023, as well as the guidance the regulator set for all the state’s hospitals as they build their 2026 budgets.

The decision comes as Blue Cross Blue Shield Vermont awaits approval to raise rates in 2026 for other plans sold on the state’s Affordable Care Act marketplace. Last month, the insurance company asked regulators to approve an average rate increase of about 23.3% for individual plans and 13.7% for small group plans. 

This decision suggests that the Green Mountain Care Board may also reduce those premium rate requests in similar ways. 

Correction: An earlier version of this story misstated Blue Cross Blue Shield of Vermont’s 2026 rate increase request for individual and small group plans.

Clarification: This story has been updated to explain how the Green Mountain Care Board’s decision on rate increases for plans sold to large employers affects what insurer’s charge.

Read the story on VTDigger here: Vermont regulators approve a trimmed increase to 2026 health insurance premiums for large employers.

This commentary is by Don Tinney of South Hero. He is a high-school English teacher who is the elected president of Vermont-NEA, the union of 13,000 educators who shape the state’s future every day in our local public schools.

Since the beginning of the year, Vermont Healthcare 911 — a broad coalition of unions (including Vermont-NEA), business leaders, reform advocates and medical caregivers — has been sounding the alarm about Vermont’s dubious distinction of having the highest commercial insurance premiums in the country and why key sectors of the health care system — hospitals, Federally Qualified Health Centers, primary care practices and mental health services — are on the edge of financial collapse or can no longer meet patient needs.

Even the state’s largest insurance carrier, Blue Cross of Vermont, is facing an unprecedented depletion of reserves and mounting costs that threaten its fiscal solvency.

The specter of the affordability crisis in health care looms large. We all live in its shadow. Ever-rising commercial premiums and out-of-pocket costs, driven largely by hospital prices and budgets, are an existential threat to the well-being and stability of businesses, public schools, municipal and state institutions, health care workers, patients and families.

Since 2018 alone, the cost of a family insurance plan on Vermont Health Connect rose by a staggering 92%, making Vermont’s family premiums the most expensive in the country.

Between 2020 and 2025, premium contributions by school districts and school employees combined grew by more than 60%.

The major drivers are hospital and prescription costs. 

Every dollar spent on overpriced medical services and products and bloated hospital administration is a dollar robbed from children’s education. When premium rates rise dramatically, year after year, so do property taxes. Gov. Phil Scott and lawmakers should begin to connect these dots first when they talk about affordability and public education.

Reading the data reports of VHC 911 and talking with fellow members of its leadership council has led me to hope that legislators, regulators and the governor can be compelled, finally, to act in concert in the public’s interest. In fact, I am happy to report that two measures recently passed by lawmakers would begin to curb the unsustainable growth in hospital and drug costs.

Recall that the Act 167 report, issued last September, laid out an ambitious but achievable roadmap to ensure the financial stability of our hospitals, to revitalize community care, and to bring down costs for the commercially insured. When introducing its findings, Dr. Bruce Hamory could not have been clearer on the scope of the problems we face and the necessity for corrective action: “The platform for health care in Vermont has burned and requires rebuilding in a modern form with more sustainable governance and funding methods.”

Let’s start rebuilding — and this means regulating and lowering hospital prices. Vermont-NEA is fed up with price gouging, cost-shifting and blaming patients and working families for high prices. Recently, Don George, Blue Cross’s CEO, acknowledged that the beleaguered carrier has called on the Green Mountain Care Board “to implement hospital/payer-specific revenue caps — an important step toward affordability.” 

Additionally, the persistent and widespread financial harm endured by community-care providers — the bedrock of primary care, wellness and prevention, and mental health — is unconscionable.  Our union, therefore, will continue to strongly oppose cuts to essential services and frontline medical personnel by hospital executives.

If certain hospital leaders refuse to work collaboratively with legislators and GMCB to bring down prices and spending, and to manage their facilities more transparently and cost-effectively, they should step aside in favor of those who will.

VHC 911’s detailed revelations on unethical profiteering by UVMMC at the expense of the commercial insurance market and its exorbitant spending on administrative and management personnel who do not deliver patient care show us that we can lower hospital costs without compromising access to care or hurting the medical professionals who provide it.

Health care reform is within our reach if we muster political resolve, strengthen the Green Mountain Care Board and craft rate-setting policies, regulations and population health priorities informed by the Act 167 Report and VHC 911’s research.

Our collective efforts will not be confined to hospitals, but that is where they must begin.

Read the story on VTDigger here: Don Tinney: Vermont’s students, among others, shortchanged by exorbitant health care costs.

This commentary is by Patrick Flood of Woodbury. He is former commissioner of the Vermont Department of Mental Health and the Department of Disabilities, Aging and Independent Living, and former deputy secretary of the Agency of Human Services.

Because of failed leadership and misguided waste of Vermonters’ money, our health care system is on the verge of collapse. This did not need to happen. 

Once again, Blue Cross Blue Shield of Vermont is requesting unaffordable rate increases. This is largely because the high cost of care has drained the carrier’s reserves to the point that the organization is on the brink of bankruptcy. If BCBSVT goes bankrupt, our health care system will collapse, since its customers will be unable to obtain care and providers will be unable to receive payments.

We know why this is happening and how it could have been avoided. The people in charge of Vermont’s health care system, and many public advocates who pay close attention, have known for years what the problem is: most of our health care dollars have gone to hospitals to pay for unnecessarily high administrative costs and avoidable care. (Two studies commissioned by the Green Mountain Care Board and research by the Vermont Healthcare 911 coalition have demonstrated this conclusively.

Meanwhile, primary care, mental health, home health and other providers of care have been starved for funding. The result is that costs have soared while access to care has worsened and many physician practices have closed or are facing closure. 

It is shameful that our leaders have let this train wreck develop over the past decade when we all knew what the real solution was: 

• strengthen primary care so every Vermonter has ready access to a doctor; 
• strengthen mental health services to keep people with mental health issues stable and out of emergency rooms; 
• strengthen services like home health to keep people out of the hospital and get them home sooner when they do go; and 
• ensure there is a network of long-term care services, including quality nursing homes, to meet the needs of an aging population. 

Had we taken those steps, Vermonters would be healthier and overall costs would have been lower, especially hospital spending resulting in lower premium increases. 

Instead, over the past decade we got woefully misguided initiatives like OneCare Vermont and the “all payer model,” which failed miserably to contain costs and wasted huge amounts of money. Administrative costs for OneCare alone were approximately $100 million. 

Until recently, hospitals pretty much got what they asked for in budget increases. The one bright spot recently has been the oversight of the current Green Mountain Care Board to constrain hospital budgets. Sadly, without further bold actions, the Board’s efforts may turn out to be too little too late. 

So, what can we do now? Half-steps are not going to cut it. The solution, as I see it, has three integrated parts.

First, GMCB needs to significantly reduce what hospitals can charge. The Board can approve different rates for each hospital so that those most responsible for the crisis, primarily UVMMC, can be assigned the greatest reductions.

Such reductions can stabilize BCBSVT while broader reforms are put in place. UVMHN has huge reserves that will allow it to weather such a change for a year or two. A crisis like this current one is why reserves exist; now is the time to use them. 

Second, lower the rates the Medicaid program pays to UVMMC and use the savings to raise the rates Medicaid pays to primary care, mental health, home health and nursing homes. This is possible because the state of Vermont sets the rates in our Medicaid program. Raising rates for community providers would allow those providers to immediately begin to hire more staff and provide more prevention services, thus keeping people out of hospitals and reducing hospital spending.

A study commissioned by the GMCB showed that up to 30% of hospital spending is “avoidable”, meaning it could have been prevented if alternative services were in place. Even 10% of our total hospital spending would amount to over $300 million, enough to fully cover the costs of what needs to be done for primary care and other key services. 

Third, begin working immediately on a comprehensive statewide health plan to determine what services we need in each part of the state to have the most efficient and effective health care system. This plan should be in our hands no later than Jan. 1, 2026. 

Yes, this means our hospitals will have to make major changes. But it is far better for Vermonters to take a clear-eyed, data driven, thoughtful, systemic approach to planning than to have each hospital making decisions in their own financial interest. 

Rest assured that there is more than enough money in our health care system to provide basic health care services to every Vermonter at an affordable cost. But we are wasting it in avoidable ways in hospitals, primarily at UVMMC. This can be changed quickly to save our system. 

Or we can wait and let the bankruptcies start and watch more and more Vermonters drop their insurance coverage because they can no longer afford it.

Read the story on VTDigger here: Patrick Flood: Health care failure and crisis.

This commentary is by Rep. Peter Conlon, D-Cornwall. He is chair of the House Education Committee.

When it comes to two of the biggest issues facing Vermonters, Gov. Phil Scott has gone silent. I am sure he is out there, checking his enormous political capital, then deciding not to spend a penny of it leveling with Vermonters that making the changes our state needs in education and health care — to name the two I will focus on — is going to require a new reality.

Vermont’s decades-long demographic change — found in many other places in the U.S. and the world — has come home to roost. We are growing old; our birth rate is low; young people are back to their pre-Covid-19 ways of choosing to live in diverse, walkable cities with more economic opportunity; and our housing crisis continues.

This is changing the face of Vermont, particularly rural Vermont. We have far fewer students in our schools, and our aging demographic means higher demand on our health care system with fewer young, healthy Vermonters paying into the system.

Gov. Scott says nothing about Vermont’s health care system, which is on the brink of collapse, and very little about education since he floated the concept of sweeping changes, but has never been clear with Vermonters that we must have fewer schools, especially middle and high schools, to keep our system affordable.

Health care may be the most immediate and important crisis, and it doesn’t even make Gov. Scott’s list of top issues. The state’s main — really only — insurer, Blue Cross Blue Shield of Vermont, is on the verge of insolvency unless it gets a 20% rate increase or a helluva bailout.

Most of our 14 hospitals are in a similar situation. Our insurance premiums are anywhere from twice to four times as expensive as our border states. A 20% will drive small businesses and individuals who buy on the exchange out of Vermont far faster than taxes.

Gov. Scott has a road map to bending the cost curve sitting on his desk gathering dust. It is a commissioned study of Vermont’s system with clear recommendations to stabilize it and control costs. But it requires leveling with Vermonters, because we can no longer afford to maintain 14 hospitals all providing the same services. We can’t, and he needs to make that clear.

It is the same with public education. With fewer students, we can no longer afford to maintain all of the schools we operate today. We can’t, and Gov. Scott needs to make that clear.

No one else in Vermont has his megaphone, no one else has his clout, no one else has his political capital. It is time for Gov. Scott to give the volunteers who govern our education and health systems an assist. He needs to speak honestly, clearly and directly with Vermonters that our state has changed, and we need to adjust to those changes now, or watch our state slowly decline.

Of course there are other big issues. Solving homelessness and our housing crisis is going to take more than his solution of just relaxing Act 250 regulations. It is going to take a sustained level of support from the government. He would never say that.

We are ready to listen, Governor. Are you ready to speak frankly about what we really need to do? We can handle it, and we will find the right solutions together.

Read the story on VTDigger here: Rep. Peter Conlon: Gov. Scott needs to speak frankly on education and health care.

Vermont policymakers are facing a $200 million question. 

That’s the amount of spending — according to the Green Mountain Care Board — that the state’s health care system would need to trim in order to keep Blue Cross Blue Shield of Vermont’s premium increases to around 5% in 2026. 

It’s a big ask, and a short timeline. Earlier this week, Blue Cross Blue Shield issued its proposed premium increases for 2026: 13.7% for small group plans and 23.3% for individual ones. Without significant cost savings within the next few months, those numbers will likely stand. 

Lawmakers are working on several measures intended to lower health care costs. But many of those initiatives — such as reference-based pricing, a system that caps how much hospitals can charge for procedures and a bill to reduce the cost of building or renovating facilities — are years away from bearing fruit.

Earlier this month, Rep. Lori Houghton, D-Essex Junction, introduced an amendment to a large bill, S.126, intended to trim spending in Vermont’s teetering health care system more quickly. 

The initial amendment, dated May 2, would have required the Agency of Human Services to “coordinate efforts by hospitals” to cut Vermont hospital spending by 10% in their fiscal year 2026, which begins Oct. 1.

By the next week, the language had been softened: the agency would “facilitate collaboration and coordination” to help providers “identify opportunities” to improve health care services and reduce spending by 5%.

A day later, lawmakers trimmed that savings goal further: to just 2.5%. That figure still stands in the most recent version of the bill, which was advanced by the House Appropriations Committee Friday afternoon. 

In an interview last week, Houghton said the initial goal of a 10% reduction in health care spending would have actually added up to $400 million — twice the number the Green Mountain Care Board asked for. So lawmakers trimmed it to 5%, which comes out to $200 million. 

“Then for various reasons — of just people not (being) happy, and not sure how they can do it — we did move it down to 2.5%,” Houghton said.

But whatever the number is, the legislation is not intended to force health care facilities to cut spending: “There’s no mandate,” Houghton said. 

“Lots of times when we pass legislation, it is the intent that’s important, right?” she said. “And it’s also the fact that we need Vermonters to see that we’re all trying to find a solution to this really immediate problem.”

— Peter D’Auria

In the know

Vermont is on track to join a growing list of states that have banned smartphones from the classroom.

This week, lawmakers in a key committee advanced legislation that would require all of the state’s public school districts and independent schools to develop policies prohibiting students from using smartphones and other personal devices like smartwatches during the school day. The policies would need to take effect by the 2026-2027 school year.

A school cell phone ban was previously introduced in a standalone bill that has failed to move forward this legislative session. But on Thursday members of the Senate Committee on Education voted to graft the ban onto H.480, a miscellaneous education bill that includes several smaller adjustments to Vermont’s education laws. 

Now, with broad support in both chambers, lawmakers hope to send the bill to Gov. Phil Scott’s desk by the end of the session. 

Read more about the new bill language here. 

— Habib Sabet

Gov. Phil Scott has issued his third veto of the session, rejecting H.219, a bill that would require the Department of Corrections to roll out a program providing free family support services to incarcerated parents and guardians across state prisons. (Scott also vetoed two versions of the fiscal year 2025 budget adjustment bill.)

Scott wrote in a letter explaining his decision Thursday that he supported the bill’s intent but not specific language within it that would require his administration to put funding for the program in future budget proposals to the Legislature. Such a requirement violates the state Constitution, he said.

The veto may not matter much, though, since funding to run programs for incarcerated parents at two state prisons has already been included in the 2026 budget bill, which the House and Senate both approved this week. Scott supports that funding, too, he said in his veto letter.

Rep. Troy Headrick, a Burlington Independent who sponsored H.219, said in an interview Friday that Scott has also expressed support for legislators’ intent, also laid out in the bill, to have the administration expand the program to all state prisons by 2028. 

Legislators may rework some of the language that Scott opposed in H.219 in the remaining weeks of this year’s session, Headrick said, or could take the legislation up again at the start of next year’s session. 

— Shaun Robinson

On the move

A key Senate committee advanced the Legislature’s landmark education bill Thursday, but not before nearly every committee member vented their discomfort with the legislation. 

“I can’t remember ever feeling as bad about a vote as I do on this one, but it will move us forward,” Sen. Ann Cummings, D-Washington, the Senate Finance Committee’s chair, told her colleagues after voting out H.454. 

The bill proposes generational changes to Vermont’s school governance and finance systems that would phase in over multiple years, including school district consolidation and a new education funding formula, but leaves open some key decision points for the future. 

Read more about the Senate’s version of the education reform bill here. 

— Ethan Weinstein

The Senate on Friday passed H.1, a bill that would eliminate a requirement from state law that the Legislature’s two internal ethics panels consult with the State Ethics Commission over cases in which lawmakers are accused of potential misconduct. 

Legislators have argued that the consultation requirement, part of a sweeping set of changes to state ethics laws enacted in 2024, infringed on the separation of powers guaranteed in the state Constitution. But the proposal has drawn repeated opposition from the Ethics Commission, which argued it could be the start of a slippery slope of reneging on last year’s accountability measures.

The bill will now head back to the House to consider the Senate’s changes.

— Shaun Robinson

Visit our 2025 bill tracker for the latest updates on major legislation we are following.

Read the story on VTDigger here: Final Reading: Lawmakers encourage, but don’t require, health facilities to reduce spending.

Over the past several months, Vermont lawmakers and state officials have been preoccupied with the fate of the state’s largest health insurance company. 

Blue Cross Blue Shield of Vermont, the Vermont-based member of the nationwide health insurance organization, is also the only health insurance company based in Vermont. The nonprofit covers roughly a third of the state’s population across all its plans. 

Now, with its reserves drained by a multi-year surge in insurance claims, the nonprofit is facing a financial crisis with little recent precedent. As Blue Cross Blue Shield prepares to ask state regulators to increase premiums in 2026, the financial health of the company has alarmed policymakers and prompted a scramble to shore up the company.

“If Blue Cross cannot pay the claims, the system fails,” Owen Foster, the chair of the Green Mountain Care Board, a key health care regulator, told lawmakers last month. 

Federally qualified health centers, independent clinics, mental health agencies, possibly even hospitals — “if they don’t get paid, they close their doors,” Foster said.  

The financial headwinds facing Blue Cross Blue Shield are familiar to many in Vermont’s health system. In the wake of the Covid-19 pandemic, hospitals and other providers have seen a surge of patients, many presenting with more complex conditions. What’s more, the price of care — particularly drugs, and more particularly specialty drugs, like popular weight-loss medications known as GLP-1s — has increased precipitously in the past few years. 

That’s led to unexpected increases in health care expenditures across the state. In both 2023 and 2024, for example, the University of Vermont Medical Center exceeded its budgets by tens of millions of dollars — overages that, hospital administrators said, were caused by a massive surge in patients needing more care.

That surge has, in turn, drained Blue Cross Blue Shield’s cash reserves. From 2021 through the end of 2024, Blue Cross Blue Shield has lost nearly $152 million, according to data the insurer presented to legislators earlier this month. Last year alone, Blue Cross lost $62.1 million.

In 2019, the insurer had $133.5 million in the bank. At the end of 2024, Blue Cross Blue Shield had just $58 million — and pays out an average of $35 million a week in claims.

Last year, credit rating agency A.M. Best downgraded Blue Cross Blue Shield’s rating twice, bringing its score from B++ to C++. That’s moved the insurer’s rating from “good” to “marginal” in a matter of less than six months.

“I’ve lived and worked in Vermont for 45 years,” Don George, the CEO of Blue Cross Blue Shield, told lawmakers in the Senate Committee on Health and Welfare last month. “And I’ve just never seen anything remotely close to what we’re going through now.” 

‘We’re fortunate’

A significant chunk of those losses have come from Blue Cross Blue Shield’s Medicare Advantage plans, Vermont Blue Advantage. From 2019 through 2023, Blue Cross Blue Shield lost $43.4 million on those plans, according to financial records. Roughly 35,000 Vermonters are on Blue Cross Blue Shield Medicare Advantage plans, Sara Teachout, a spokesperson for the insurer, said. 

Some of those early losses were startup costs ahead of the plans’ rollout in 2021, Teachout said. Once they hit the market, the plans continued to lose money — $11.5 million in 2022 and $22.5 million in 2023 — along with the rest of the insurer’s portfolio, records show.  

Those deficits are due to the same factors affecting the rest of Blue Cross Blue Shield’s generally, Teachout said: a rise in residents needing care and increasing costs for that care.

Those losses “are proportionate to the losses in our other lines of businesses that are due to the cost surge,” she said. 

To shield itself from those losses, Blue Cross Blue Shield of Vermont has almost entirely unloaded its Medicare Advantage business onto Blue Cross Blue Shield of Michigan, an affiliate nonprofit insurer. It’s also taken out a $30 million loan from Blue Cross Blue Shield of Michigan. 

Because of its shaky financial footing, Blue Cross Blue Shield of Vermont is paying 8% interest on that Michigan loan. George, the CEO, said in an interview that the insurer was lucky to have even gotten a loan in the first place.

“The reality is, we would likely — under those circumstances and that risk — not be able to find anyone that would loan Blue Cross Blue Shield of Vermont (money),” he said. “So we’re fortunate to have Michigan, and that’s how we come up with that interest rate.”

To shore up its finances, the insurer has also held off hiring roughly for 30 positions and has embarked on a “comprehensive capital recovery plan” with the Department of Financial Regulation, according to George. 

‘The number one cost driver’

As part of an annual regulatory process, Blue Cross Blue Shield is preparing to request increases to its insurance premiums later this month — increases that are expected to be large. Last year, the insurer raised premiums for individual and small group plans on the state’s health insurance marketplace by roughly 20%. 

For 2026, “Given the pace of medical and pharmacy costs and the utilization that we saw right through to the end of 2024, I would expect increases not unlike what we’ve recently seen in the past,” Ruth Greene, the insurer’s chief financial officer, said in March. 

Those increases impact not only individual Vermonters’ insurance costs — already some of the highest in the nation — but also their taxes. Most municipalities buy small group insurance plans on the state health insurance market, according to Ted Brady, the executive director of the Vermont League of Cities and Towns. 

Prior to last year’s premium increases, roughly 80% of municipal employees were insured with Blue Cross Blue Shield, Brady said, although he now expects that many municipalities have switched to MVP, the other insurer that sells on the marketplace.

“Health insurance is the number one cost driver for municipalities right now,” he said.

School and state employees are also insured on Blue Cross plans, but are on a different type of plan known as self-funded plans. Although those organizations have also seen significant premium increases as health care costs rise, members contribute proportionally less to Blue Cross’ reserves — meaning they are more insulated from the insurer’s financial struggles, administrators at those organizations say. 

Still, increasing insurance premiums are “a tremendous economic strain on every part of Vermont,” Vermont’s Chief Health Care Advocate Mike Fisher told lawmakers last month. 

‘Acute and immediate threat’

Meanwhile, policymakers and legislators are taking steps on their own. In March, the Green Mountain Care Board, a key health care regulator, announced a deal with the University of Vermont Health Network that will deliver $12 million in hospital funds to Blue Cross Blue Shield of Vermont. 

Lawmakers are also hashing out the details of a bill that would allow for emergency action to help health insurers in financial crisis. That bill, H. 482, would allow the Green Mountain Care Board to reduce the reimbursement rates paid to a Vermont hospital if the insurer in question faces “an acute and immediate threat to its solvency.” 

Such a rate reduction would only be allowed if the hospital is part of a financially stable network, according to the bill language. 

The proposed legislation passed out of the House in March. A key legislative committee, the Senate Health and Welfare Committee, is scheduled to vote on advancing it Friday. 

Meanwhile, in the other chamber, the House’s health committee is looking to address the problem of rising costs closer to their source — at hospitals and other providers. 

A sprawling bill, S.126, would implement a new payment model known as reference-based pricing, in which hospital charges are pegged to Medicare reimbursement rates, to go into effect no later than 2027. The bill would also direct the Agency of Human Services to work with providers to reduce health care spending by 5% “for hospital fiscal year 2026,” which begins October 1.

That bill passed the Senate in March, and lawmakers in the House Health Care Committee are working on amendments this week. 

“There’s a lot of work that has to be done,” Sen. Ginny Lyons, D-Chittenden Southeast, the chair of the Senate Committee on Health and Welfare, said of her committee’s legislation last month. “We can’t let Blue Cross and Blue Shield go under.”

Read the story on VTDigger here: Financial struggles have pushed Vermont’s largest health insurer to the brink.

This story by Carla Occaso was first published in The Bridge on Nov. 20

The Montpelier City Council is bracing for budget cuts when the first draft budget will be presented on Dec. 11. Initial figures to run the city in fiscal year 2026, without cutting current expenses, would cause taxes to go up over 24%, according to Montpelier Finance Director Sarah LaCroix.

LaCroix emphasized during the Nov. 13 city council meeting that her “budget discussion” report is not a proposed budget, but rather a compilation of costs at current service levels.

LaCroix wrote in her report, “I expect that the FY26 budget process will be the most difficult in recent history. The preliminary budget you see attached contemplates a 24.1% tax revenue increase. That percentage increase equates to $2,858,674 or 21.77 cents on the tax rate; this demonstrates the difficult task ahead for both Council and City Leadership.” She blamed increases on inflation, staffing costs, restoring items that were cut last year, and increasing the capital improvement plan.

LaCroix said all collective bargaining contracts end June 30, adding to a somewhat unknown expense bundle. Additionally, she reported that the Blue Cross Blue Shield Health insurance premium renewal is going up 22.2% for the first six months of the year. And, a bond vote asking to fund a tower truck for the fire department, at a cost between $1.9 and $2.6 million is coming up as well. She said she added back $900,000 that had been cut from last year’s budget, which included some positions in parks and recreation and other items. Therefore, her office is asking for guidance on any cost targets or goals on which to base the first budget proposal, the report states.

City Manager Bill Fraser said asking councilors to weigh in on the budget before seeing the first draft is a different process from prior years, but he and LaCroix wanted “you all and the public to know how daunting the choices are.”

Council member Lauren Hierl asked if there are other ways to raise money, such as through a local options tax. Council member Pelin Kohn asked for a list of personnel needed to provide core services such as police, fire, and public works. Council member Tim Heney noted that 75% of the budget appears to be labor and associated costs. “I’m thinking we really can’t go into this process saying we can maintain our whole labor force,” Heney said.

Council member Cary Brown said she agreed the 24% tax increase is “not something we can do” and talked about really prioritizing needed services such as emergency, fire, and police, but also trying to keep funding the capital plan and the paving plan.

“It got pretty dark for me as I was reading this,” council member Sal Alfano said. “We need to look at personnel. It’s a pretty hard thing to do but we need to see what the options are.”

Heney suggested looking at a 3.5% consumer price index increase as a target to aim for. He asked LaCroix how much money would be needed to reach that goal, and LaCroix said it would be about $2.5 million. Heney also suggested considering the senior activity center, the justice center, the recreation department and administrative staff as areas to look at cutting. LaCroix said the Community Justice Center is 100% grant funded.

Council member Adrienne Gil said she had been reading the budgets of other cities and noticed that she sees 30% going toward public works; 30% toward police, fire, and EMS; 10% toward central office staff; 10% toward parks; 10% toward rec; and 10% toward economic planning and development. Fraser said more detailed information would be provided with the first budget presentation.

Read the story on VTDigger here: Montpelier council eyes job cuts to avert 24% tax increase next year.

A key Vermont health care regulator reduced hospital budgets by millions of dollars for the 2025 fiscal year, setting out financial guardrails for how the facilities can operate over the next 12 months.  

The decisions, announced Friday by the Green Mountain Care Board, place caps on how much Vermont hospitals can charge for services and how much revenue they can bring in from those services. 

Earlier this year, Vermont’s hospitals asked the board to sign off on a 5.7% systemwide increase in charges for patient care to private insurers, such as Blue Cross Blue Shield and MVP. Hospitals sought to raise their patient revenue — money brought in from caring for patients — by a total of 8%. 

But the board capped overall commercial charge growth for patient care at an increase of 3.4% or less over the current fiscal year for each hospital. And revenue from patient services can grow only 4.1% systemwide in the next fiscal year, per the board’s orders.

The decisions will take effect in hospitals’ 2025 fiscal year, which begins Oct. 1. 

Owen Foster, the chair of the Green Mountain Care Board, said in an interview Monday that the board’s decisions were an attempt to balance competing concerns: affordability, access and the viability of the state’s hospitals.

“The big theme was really considering the system and what's going on in the insurance market and with people's ability to afford health care,” Foster said in an interview Monday. “While also being mindful that we're on the precipice of, potentially, some large systematic change.”

Earlier this year, the Green Mountain Care Board signed off on a third year of substantial increases for commercial insurance premiums — a move that has added fuel to concerns about the cost of health care in the state.

That potential "systematic change” mentioned by Foster refers to a report due Wednesday by a consultant with recommendations for how Vermont’s hospitals should adapt to ensure the long-term sustainability of the state’s health care system.

But Mike Del Trecco, the president and CEO of the Vermont Association of Hospitals and Health Systems, said the board’s cuts could harm health care access in the state.

“We know we live in a state where the cost of everything is high — housing, property taxes, groceries, health care — and we've got to work on putting pressure on those costs and bringing them down,” Del Trecco said. “But we also live in a state with a very old population, and those Vermonters need more care, and frankly, it's more expensive care. And that's the balancing act we're faced with.”

Changes to charges for hospital services 

The care board set benchmark increases of 3.5% for patient revenue and 3.4% for hospital charges to commercial insurers, based on state health care affordability goals.

In their decisions, the board kept all hospitals’ charges for patient care within or below that 3.4% cap. 

In the case of the University of Vermont Medical Center, the state’s largest hospital, the board actually required a 1% decrease in charges in 2025 — a response to the fact that, in its 2023 fiscal year, the hospital had exceeded its board-ordered patient revenue cap. The Burlington hospital had requested permission to raise prices by 6.8%. 

UVM Health Network administrators have said that that excess revenue came from treating more patients with more complex needs — and that the hospital actually lost money on providing that care. 

“On Friday, the Board informed UVM Health Network that they would be penalizing the Network for providing increased care to our patients,” UVM Health Network spokesperson Annie Mackin said in an emailed statement, “and enforcing a cap on care by allowing commercial insurance companies to pay us less in the coming two years than they did last year, even as the costs of providing health care continue to increase.”

Rutland Regional Medical Center, which also exceeded its board-ordered revenue that year, will be held to a 1.2% bump in charges — less than half its requested hike of 2.8%.

All other hospitals were allowed to raise prices between 2.2% and 3.4%. 

Patient revenue changes

The board-allowed increase in patient services revenue came out to 4.1% across all hospitals, but individual hospital caps varied more widely.

North Country Hospital will be allowed to grow patient revenue by 1.6%, the amount requested by the Newport hospital. Meanwhile, Morrisville’s Copley Hospital will be allowed to raise patient revenue by 9%, and Northwestern Medical Center, in St. Albans, can raise revenue by 6.8%, the two largest adjustments in the state.

Foster, the Green Mountain Care Board chair, said that those higher revenue caps will allow the hospitals — both of which are, he said, relatively affordable — to treat more patients. 

“Copley and Northwestern are, by Vermont standards, quite a bit more affordable for services on the commercial side,” he said. “And so we gave both of them quite a bit more than the guidance was to allow that affordable access.”

Hospitals are able to appeal the board’s orders on their budgets, although Del Trecco said he was unaware of any current efforts to appeal the decisions.

But University of Vermont Health Network president and CEO Sunny Eappen said in an interview last week that the network was exploring legal options to challenge the board’s orders, which he said could force hospitals to cut services.

“We will explore every possible venue to protect Vermonters in doing this work,” he said. 

Read the story on VTDigger here: Green Mountain Care Board trims hospital requests for increases to 2025 budget, service charges.

Blue Cross and Blue Shield of Vermont told a state regulator that the University of Vermont Medical Center has been overcharging it for the past two years, and is asking for a refund. 

The alleged overpayments, from the state’s largest private insurer to the state’s largest hospital, took place in fiscal years 2022 and 2023, Blue Cross said, and added up to nearly $30 million. 

Blue Cross “respectfully requests that the Board obtain the information it needs from UVMMC to test our position and then order UVMMC to return any overage to Blue Cross VT,” Rebecca Heintz, the insurer’s vice president and general counsel, wrote in an August 21 letter to the Green Mountain Care Board.

The University of Vermont Medical Center has strongly denied that it overcharged for health care.

“That assertion is false and entirely unsupported by the insufficient analysis Blue Cross VT submitted in support of its serious allegation,” the hospital said in an August 26 letter to the board signed by two UVMMC vice presidents, Eric Miller and Kelly Champney.

In Vermont, the prices that commercial insurers pay for hospital services are regulated by the Green Mountain Care Board. Each year, in a bid to keep care affordable for Vermont residents, the board places caps on how much each hospital in the state can raise prices for its services for the following fiscal year.

Prices paid by public insurers — Medicare, which covers older and disabled adults, and Medicaid, which covers low-income residents — are determined by separate processes. Those prices are generally much lower than those paid by commercial insurers, which means that hospitals often rely heavily on private insurers for their revenue. 

The dueling letters offer unusual insight into the behind-the-scenes negotiations over Vermonters’ health care costs.

For fiscal year 2022, the Green Mountain Care Board initially allowed UVMMC to increase its charges by 6.05% from the previous year. Partway through the year, the board allowed an increase of another 2.5%.

For fiscal year 2023, the board approved a rate increase of 14.77% for the Burlington hospital. 

But Blue Cross Blue Shield says that the hospital charged it even more than what was allowed under the board’s orders. 

The insurer has “observed repeated multi-million dollar overages between UVMMC’s Board-ordered commercial rate increases and the actual increases we experienced,” Heintz wrote to the care board. “Those overages deplete our reserves and over time contribute to larger prospective increases in our premiums.”

Determining whether the hospital overcharged the insurer, as described by both parties, is a complex process.

For one thing, UVMMC does not hike prices for all services by the same amount each year. Some services could stay at the same price year-to-year, while others could increase by even more than the board’s price caps — as long as the aggregate prices don’t increase by more than the cap.

According to the medical center, those increases are tailored to adhere to another care board requirement: Each year, the board also places limits on how much total revenue hospitals can bring in from patient services. 

That revenue can fluctuate depending on how many patients go to the hospital each year, and what services they use when they do.  

In fact, in fiscal year 2023, UVMMC exceeded the revenue cap ordered by the care board by roughly $80 million, or 4.8%.

Hospitals administrators admitted that they brought in more money — and charged Blue Cross Blue Shield more — than expected. But they say those excesses came from the fact that the hospital treated more patients, and patients with more complicated needs, than predicted. 

“We provided the services to Blue Cross members that they needed,” Champney, the University of Vermont Health Network vice president of managed care contracting, said in an interview. 

“In ’22 and ’23 we saw more Blue Cross patients. We saw higher complexity of services for those patients,” Champney said. “And with that, the revenue from Blue Cross did increase. But we do not see an increase or incorrect application of the Green Mountain Care Board-approved rate we negotiated with Blue Cross.”

Blue Cross Blue Shield, however, said that the hospital’s charges don’t add up — even factoring in that more patients needed more complex services.

“We are accounting for that in our methodology,” Sara Teachout, a spokesperson for the insurer, said in an interview. 

The dispute has become public just prior to a Green Mountain Care Board hearing Wednesday on UVMMC’s application for new rates for 2025 — a fact that UVMMC administrators raised concerns about.

“Having this letter that alleges a rather large overpayment, while we’re already under pressures to support our (2025) budget — it’s disappointing they went about it this way,” Champney said, saying the hospital would have preferred to negotiate more directly with the insurer. “And doing it, really, right before (the) Green Mountain Care Board hearing creates further complexities.”

The decision on how to handle the matter now falls to the Green Mountain Care Board. Owen Foster, the chair of the board, said in an interview that it was still too soon to tell what the regulator would do. 

“We just received Blue Cross’s letter late last week, and UVM’s, I think last night,” he said. “And so we’re really very much still currently reviewing and evaluating their submissions. And once we get done evaluating the submissions, we’re going to reach out to the parties to further understand the issues.”

Read the story on VTDigger here: Major Vermont health care players in dispute over alleged overcharges.

Health insurance prices in Vermont are high — and getting higher.

Average premium prices for individual marketplace plans in Vermont are among the highest in the country, according to data from the Centers for Medicare and Medicaid Services, costing more than double the national average, even when federal subsidies are accounted for. 

Vermont’s premium prices are rising by double-digit rates, significantly faster than in most other states, according to data from health policy nonprofit KFF. 

“There's no dispute. Vermont's expensive,” said Mike Fisher, Vermont’s chief health care advocate. “We see it in our premium rates. We see it in our hospital commercial rates.”

Although the federal data only shows premium costs for individual plans, small and large group plans for employers have seen similar cost increases, according to Sara Teachout, a spokesperson for Blue Cross Blue Shield.

“The prices at hospitals, the prices for pharmaceuticals, all that stuff is the same across the marketplace,” she said. 

Most Vermonters don’t pay the sticker price …

Roughly 30,500 Vermonters are insured through individual marketplace plans, according to the Department of Vermont Health Access. Individual plans are plans bought by individual consumers, rather than employers, on the state’s marketplace, Vermont Health Connect. (They are referred to as individual plans even though they may cover a family.) 

The average monthly premium for those plans — the sticker price — was $874 as of January 2024, among the highest in the country, according to federal data. 

But because federal and state money helps offset those premium costs, most Vermonters who buy those plans do not pay that sticker price.

More than 89% of Vermonters on those plans received some form of federal subsidy to pay for them, according to the 2024 data from the federal Centers for Medicare & Medicaid Services. After those subsidies, the average premium dropped to $243 a month, and Vermonters who received those federal subsidies paid an average premium of $178 a month. 

The state of Vermont also helps low-income residents pay for insurance with a benefit known as Vermont Premium Assistance. That benefit sets an upper limit on how much Vermonters can pay for premiums for an insurance plan bought on the marketplace, depending on their income. 

According to the Department of Vermont Health Access, which administers the state marketplace, about 14,800 Vermonters on individual marketplace plans receive state premium assistance.

Data from the department, which is more recent than that from the Centers for Medicare and Medicaid Services, differs slightly from the federal figures. According to the Department of Vermont Health Access, the average amount of state premium assistance issued to Vermonters was about $35 a month. 

That brings the average premium of Vermonters on individual marketplace plans down to about $210 monthly, according to the department. That is still a higher premium than those in roughly 40 states, according to federal data. 

Certain policy choices also affect the sticker prices for insurance premiums, in ways that do not necessarily increase the actual cost of insurance.

In most of the country, health insurance premiums for marketplace plans are linked to a purchaser’s age. Older buyers, who are likely to be less healthy, pay more in premiums, while younger, likely healthier buyers pay less. Vermont makes no such distinction, meaning that younger purchasers pay relatively more money for plans, while older purchasers pay less.  

For another thing, Vermont has employed a tactic called “silver loading”— a practice that hikes the sticker price for a key silver insurance plan. (Plans on the marketplace are classified as different metals — platinum, gold, silver, bronze — according to their premium and out-of-pocket costs.) 

Because the federal government’s premium tax credits are based on the cost of those silver plans’ premiums, silver loading actually helps Vermonters save money. When the price of those premiums increases, Vermont is able to draw down more money in tax credits — making premiums cheaper.

… but insurance is still expensive

Caveats, context and complications aside, Vermont insurance is still not cheap. 

Even taking federal tax credits into account, the average premium for an individual marketplace plan in Vermont — $243 — is the sixth highest state average in the country, if Washington, D.C., is taken into account, according to federal data. 

Unlike individuals, small businesses do not have access to public subsidies to help pay for their employees’ health insurance, according to Fisher, the chief health care advocate. 

“It's sort of stark,” Fisher said. “The small group is on its own out there. Small employers are on their own out there.”

Plans purchased through the small group market cover just over 37,000 people in the state, according to recent state filings by insurers.

Earlier this month, the Green Mountain Care Board, a key health care regulator, allowed MVP and Blue Cross Blue Shield, the two commercial insurers that sell on Vermont’s marketplace, to raise individual and small group insurance rates even further.  

MVP’s premiums will increase by an average of 14.2% for individual plans and 11.1% for small group plans. 

Blue Cross Blue Shield premiums will rise even more — by 19.8% for individual plans and 22.8% for small group plans. 

Both insurers are raising rates far higher than the national average of 7%, according to data from KFF, a nonprofit health care think tank. 

KFF compared 324 commercial insurers throughout the country that have reported preliminary rate increases. Vermont Blue Cross Blue Shield’s increase ranked eighth-largest in the nation, while MVP ranked 20th. 

Blue Cross Blue Shield said those rate hikes were necessary to fill what the state's Department of Financial Regulation described as a risky shortfall in the nonprofit insurer’s cash reserves.

“While we realize this is extremely difficult for our members, it is a necessary financial step,” Don George, the president and CEO of Vermont Blue Cross Blue Shield, said in a letter to community members last month. “Since May, health care claims have increased dramatically, and our member reserve levels have declined precipitously.”

Owen Foster, the chair of the Green Mountain Care Board, said those increases represented “deep fundamental failures in our healthcare system” in a press release earlier this month announcing the rate hikes.

“While these rates are plainly unacceptable, the alternative of an insolvent insurer unable to pay for patient care was worse,” Foster said.

What are the cost drivers?

At a basic level, health care spending is driven by the prices of care multiplied by the quantity of services used, according to Carrie Colla, a health economist at Dartmouth’s Geisel School of Medicine.

“As an economist, we think of it as p times q, price times quantity,” she said. 

In Vermont, both variables — price and quantity — have gone up over the past few years. In the past several months, Blue Cross Blue Shield, Vermont’s largest commercial insurer, which covers roughly a third of the state, has seen what some administrators have referred to as a “claim surge” — a spike in the number of claims filed by Vermonters who received care. 

That surge has been particularly acute during the past three or four months, according to Teachout, the Blue Cross Blue Shield spokesperson. But claims have increased even over the past few years, she said. 

Jordan Estey, MVP’s vice president of government affairs, said high costs for care and state policy decisions are largely responsible for Vermont’s high premium prices.

“Health insurance is expensive because the cost of health care services are expensive,” Estey said in an emailed statement. “We see much higher prices in Vermont compared to neighboring states for the exact same service(s) like MRIs and laboratory tests — which warrants further discussion about why that is, and whether these higher prices are fair and appropriate.”

Estey warned that Act 111, recent legislation that limits the cases in which insurers can reject claims from providers, is also likely to increase costs in the future — including an additional 6% increase by 2026.  

“This estimated six percent increase will be on top of the ever-increasing costs of prescription drugs, hospital bills, and other medical services provided in Vermont—which is how we’ve found ourselves looking at premium increases of more than 10% on a consistent basis,” Estey wrote. “It’s simply not sustainable.”

Over the past few years, Vermont hospitals have requested repeated increases in prices for procedures. 

Health care leaders say the reasons are numerous: The use of expensive specialty drugs, such as the diabetes and weight-loss drug Ozempic, are raising costs significantly, administrators say. A longstanding workforce shortage has led many hospitals and medical facilities to rely on traveling medical workers, who cost more than local staff. Vermont has a severe shortage of long-term care facilities and nursing homes, which results in hospitals providing care — often uncompensated — for patients who have nowhere else to go. 

And as Vermont’s population ages, residents have presented with more complex and serious medical needs, requiring more frequent and more expensive care. 

“We need more younger Vermonters who need less health care, are not on meds, don’t have chronic illnesses,” Stephen Leffler, the president and chief operating officer of the University of Vermont Medical Center, said this spring in a meeting with health care administrators and Vermont Sen. Bernie Sanders. “We’re seeing and feeling that every day.”

Even worse news could be on the horizon. During the Covid-19 pandemic, the federal government expanded eligibility for subsidies for premiums, allowing people with higher incomes to access federal money to pay for marketplace plans. But, without action from Congress, those expanded subsidies are due to expire at the end of 2025. 

“Many of us who have been looking at this health care financing ‘not-system’ — the way we finance care — have been saying for a number of years that it's unsustainable and that it can't possibly continue,” Fisher said. “But it feels like we're in a much more acute stage of that.”

Correction: Due to an editing error, an earlier version of this story was incorrect about the number of people covered by small group marketplace plans in Vermont.

Read the story on VTDigger here: Vermont health insurance costs are among the highest in the nation — and rising quickly.

BlueCross BlueShield of Vermont is seeking to raise health insurance premiums by an additional 4.3% next year, further increasing a request for already near-record-high rate hikes.

The proposed increase would increase premiums for individual BlueCross BlueShield health plans by an average of 21% and small group plans — plans for companies that employ up to 100 employees — by an average of 24% in 2025. (Because the insurer offers a variety of different plans, the actual increases would vary.) 

If approved, the rates would amount to the “highest premium rate increase for our 2025 Qualified Health Plans since the inception of Vermont Health Connect,” the state’s health insurance marketplace, BlueCross BlueShield President and CEO Don George said in a letter to community members Monday. 

“Unfortunately, the high demand for medical services, increasing prices at hospitals, exponential growth in drug prices, and new state laws are all forcing higher premiums to pay for the cost of caring for Vermonters,” George said. 

BlueCross BlueShield insures roughly a third of Vermonters. About 45,000 residents are insured on its small group and individual plans, which would be affected by the increases. The insurer also sells other plans for larger employers, which are not available on the state’s health insurance marketplace. 

The requested rate hikes must still be approved by the Green Mountain Care Board, which will issue a decision next month. Owen Foster, the chair of the board, declined to comment, saying that its rate review was still in process. 

The board is holding a public hearing to discuss insurance rates at 4 p.m. Thursday. 

The request for additional funding is necessary to replenish BlueCross BlueShield’s cash reserves, administrators at the nonprofit insurer said. 

Under Vermont law, BlueCross BlueShield is required to maintain a certain amount of money in reserve to cover potential risks — such as paying higher-than-expected claims for its members.  

The actual amount of reserves required is pegged to the amount of risk the insurer takes on. As of December, according to the state Department of Financial Regulation, BlueCross BlueShield was supposed to have at least $154 million in reserve to cover potential risks. The insurer, however, had only about $88 million as of December.

That shortfall triggered a “company action level event,” a circumstance spelled out in state law that requires the insurer to come up with a plan to stabilize its reserves. 

“As a result of the inadequacy, an increase to the contribution to reserves is necessary to increase the Company’s surplus toward acceptable levels for the protection of policyholders,” Kevin Gaffney, the commissioner of the Vermont Department of Financial Regulation, wrote in a July 12 letter to the Green Mountain Care Board.

BlueCross BlueShield administrators said that claims for health care this year have been significantly higher than expected. In March, for example, BlueCross BlueShield expected that medical claims would amount to $590 per member per month, according to testimony from Ruth Greene, the insurer’s treasurer and chief financial officer. 

In reality, member claims added up to $653 per member per month, with similar figures in April and May.  

It was unclear whether MVP, the other commercial insurance company that sells plans on Vermont’s marketplace, would also seek to amend its rate request. MVP previously requested average increases of 11.7% for individual plans and 9.3% for small group plans. 

“We cannot comment on our filings at this time,” Michelle Golden, a spokesperson for MVP, said in an email.

The increased volume of claims led to “extraordinary cost pressures” for health care organizations, George, of BlueCross BlueShield, said in his letter. 

“I share the frustration that all Vermonter’s feel about rising costs, difficulty accessing services, and the challenges to staying well,” he added. “I invite you to join me in an open dialog with our state regulators and policy makers about the cost pressures impacting the commercial health insurance marketplace and the choices that have led to this unprecedented situation.”

Read the story on VTDigger here: Citing ‘extraordinary cost pressures,’ BlueCross BlueShield of Vermont seeks to raise insurance rates further.

This commentary is by Mike Fisher, Vermont’s health care advocate.

For the third year in a row, Blue Cross Blue Shield of Vermont and MVP Health Care are requesting double-digit increases for their premiums in the small group and individual markets. If the Green Mountain Care Board approves these rate requests, Vermonters who buy their health insurance through Vermont Health Connect will once again face higher health care costs in the new year. This presents the Board with the very difficult challenge of balancing affordability for Vermonters and small businesses with the need to ensure that our insurance carriers remain solvent. 

We need your help! Your testimony is key to this process. The Green Mountain Care Board cannot find the right balance if it does not hear from Vermonters like you who will be paying these bills. As the state health care advocate, our role in rate review proceedings is to amplify the voices of Vermont health care consumers to ensure the Board understands the impact these proposed rate increases will have on ordinary people. 

One notable bright spot for 2025 is that Vermonters who purchase plans directly from  Vermont Health Connect will have more premium tax credits next year than ever before. These subsidies will effectively eliminate the proposed rate increases for most Vermonters  in the individual market and many will be able to get richer plans for the same or less monthly cost. 

Unfortunately, this financial help doesn’t exist for the small group market. Which means small employers (under 100 employees) and their employees are particularly exposed to the increased costs in the proposed rates. Whether you and your employer grow food, serve people vacationing in Vermont or provide a human service to people in need in our communities, these proposed rate increases will be felt most by you. 

The proposed rates impact the small group and individual markets only. They have no impact on Medicare supplemental, Medicare, Medicaid or other types of health insurance that are not regulated by our state. 

These rates are an indication of the costs of our health care delivery and financing system.  Please tell the Board how these increases will impact your life. If you can take a few minutes of your valuable time to weigh in, visit this website to share your story by July 27, 2024, to bring attention to this critical issue. 

If you need assistance submitting a public comment, or you want individual advice related to health insurance or access to care issues, contact the Office the Health Care Advocate’s HelpLine at 800-917-7787 or visit www.vtlawhelp.org/health to submit an online help request.

Read the story on VTDigger here: Mike Fisher: Weigh in on proposed health care premium increases .

For years, Vermont lawmakers have aimed a barrage of legislation at a seemingly intractable and impossibly complex problem: Health care costs are increasingly unaffordable for residents. 

Vermonters and their insurers spend $12,756 per person on direct health care annually — making Vermont the sixth-highest spending state in the U.S, according to 2020 data from the health policy think tank KFF. And between 1991 and 2020, Vermont’s annual health care spending per capita grew faster than any other state, KFF reported.

Separately, rising insurance premiums have outpaced wage growth and strained residents’ wallets, advocates say. Last year, when insurers requested double-digit rate increases, many members of the public responded with alarm.

“The requested rate hikes are unaffordable and unconscionable,” wrote Pownal resident Wendy Leffel to the Green Mountain Care Board last year. “Vermonters already cannot afford the monthly health insurance premiums.”

Ambitious health care reform efforts in the state have either foundered — see the infamous 2014 demise of Vermont’s single-payer model — or have yet to noticeably slow rising costs, like the state’s current efforts to implement an “all-payer” model.

Now, this session, lawmakers are pursuing a raft of less comprehensive reforms, ones they hope will nevertheless make a dent in Vermonters’ bills. 

“It’s ongoing,” said Rep. Brian Cina, P/D-Burlington, who serves on the House health care committee and is a member of the recently formed Universal Healthcare Caucus. “Every year that I’ve been in the Legislature, we’ve looked at the affordability issue,” said Cina, who was first elected in 2016.

Medicaid eligibility

The most ambitious piece of legislation — H. 721 and its Senate counterpart, S. 240 — would dramatically expand eligibility for Medicaid in the state. 

Speaking broadly, Vermont adults 19 to 64 are currently eligible for Medicaid if their income is below 133% of the federal poverty limit, meaning a four-person household must have a monthly income of $3,450 or less to qualify in the current year. 

Generally, pregnant Vermonters with incomes of 208% of the federal poverty limit are eligible, and youth under 19 are eligible for Dr. Dynasaur — the state’s public health insurance program for children — if their household income is up to 312% of the federal poverty limit. 

As currently written, the bill would significantly expand those limits, allowing pregnant Vermonters and all Vermonters up to the age of 26 to qualify for Medicaid with income up to 312% of the poverty limit. 

Meanwhile, eligibility for adults 26 to 64 would gradually increase to 312% of the federal poverty limit by 2030 — meaning a four-person household with a monthly income of $7,925 would qualify. 

The bill would also increase reimbursement rates to providers in the fields of primary care, mental health, substance use disorder, and long-term care, among other reforms.

“I think the bottom line is, we are trying to make health insurance and health care more affordable for Vermonters,” said Rep. Lori Houghton, D-Essex Junction, the chair of the House health care committee and the bill’s primary sponsor. 

Prescription drugs

Other bills focus on drug prices. S.98 would allow the Green Mountain Care Board to review prescription drug costs to determine whether they create “affordability challenges” for Vermonters, and give the board the power to cap the price of certain drugs with high or fast-growing costs. 

“We are hearing in the news all the time about countries that pay far, far less than we do (for drugs),” said Sen. Kesha Ram Hinsdale, D-Chittenden Southeast, the primary sponsor of the bill. “And I think just having a process to look at each prescription, to look at its affordability, its comparators, and give Vermonters more information and hopefully some relief, is a really valuable step forward.”

Another bill, H.233, would create a licensing system for pharmacy benefit managers, third-party entities that negotiate drug coverage plans with drug companies, insurance providers and pharmacies. It would also impose stricter regulations on how they could operate in the state. 

Pharmacy benefit managers have come under increasing scrutiny nationally, amid criticism that they operate opaquely and drive up drug prices for consumers. 

“Nationally and in our state we have had many conversations over the years about how the costs of health care are increasing,” Rep. Mari Cordes, D-Lincoln, said in an interview Wednesday. “And one of the drivers, the biggest drivers, if not the biggest driver, of those health care costs increases are pharmaceuticals.”

Another bill, S.164, would require private health insurers and Medicaid to cover the cost of obesity treatment. The proposal comes amid the booming popularity of new weight-loss drugs and the promise of their effectiveness in reducing the prevalence of chronic diseases linked to obesity.

Lawmakers are also considering a “provider burden” bill, H.766, aimed at cutting some of the bureaucratic requirements of health care by streamlining interactions between providers and insurers. The bill takes particular aim at a practice called prior authorization, in which insurers must sign off on certain procedures or drugs before they can be administered to a patient.  

That legislation intends to allow providers to help patients more quickly and easily. While not explicitly aimed at cost, the bill aims to free up providers and improve access to healthcare — something that “goes hand in hand” with affordability, Houghton, the chair of the House health care committee, said.  

“As providers spend more and more time on administrative duties, they have less time for patients,” Houghton said.

Price tags

But those proposals will carry their own costs, which may be a hard sell at a time of vanishing pandemic aid and ballooning property taxes. And even as Vermont lawmakers target the bureaucracy of health care, industry critics have argued that some of that complexity actually exists in order to make care more affordable. 

Insurance companies have pushed back on H.766, the “provider burden” bill, saying that an insurer’s ability to sign off on treatments actually saves consumers money by cutting down on unnecessary procedures. 

Sara Teachout, an in-house lobbyist for Blue Cross and Blue Shield of Vermont, told the House health care committee that the bill, if passed, would actually end up costing its members more — over $100 million, she said. (Lawmakers expressed skepticism about that figure.)

“There always needs to be a balance between the costs for patients and the increase in the price of care, and your goals for trying to decrease administrative burden,” Teachout told lawmakers in a testy committee hearing Wednesday. “We believe this goes too far in the other direction.”

Pharmacy benefit managers, meanwhile, argued that their ability to negotiate with drug companies and pharmacies actually helps keep drug costs lower.

“PBMs exist to do one thing, which is drive down the cost of prescription drugs,” Sam Hallemeier, the senior state director with the Pharmaceutical Care Management Association, the national organization for pharmacy benefit managers, told lawmakers Wednesday. “PBMs exist to deliver savings.”

And requiring Medicaid to cover obesity treatment could ultimately end up costing the state as much as $75 million annually in drug costs within a few years, according to a preliminary estimate from the Department of Vermont Health Access. 

“These are very popular medications, and they do carry significant costs,” Alex McCracken, a spokesperson for the department, told lawmakers last month.

There is no price tag for H.721, the sweeping Medicaid expansion bill, yet. 

“The Department is actively working to put together cost estimates for the sections of H.721 which would have a budget impact,” McCracken said in an email. But he noted that Gov. Phil Scott’s proposed budget did not include the costs that the bill would create.

Jason Maulucci, a spokesperson for the governor, said that the administration “(supports) the policy goal” of the Medicaid expansion. 

“However, in a year with very limited budgetary capacity, we would need to better understand which programs the bill’s sponsors would plan to cut in order to pay for it,” Maulucci said.    

Correction: An earlier version of this story misstated the ranking of Vermont among states with the highest health care costs, and the year of Rep. Brian Cina’s election.

Read the story on VTDigger here: With a flurry of legislation, Vermont lawmakers try to bring down health care costs.

It’s official. Regulators at the Green Mountain Care Board are no longer pulling punches in their oversight of the state’s largest accountable care organization, OneCare Vermont. 

The board issued a subpoena on OneCare Chief Executive Officer Abe Berman yesterday requesting a range of information about the nonprofit’s executive compensation practices, which was served this morning.

The move follows a letter sent Wednesday in which the board’s chair, Owen Foster, warned Berman that “given your recalcitrance” in providing requested details, the board would be using the full breadth of its regulatory powers to obtain them. 

OneCare has publicly described its policy of benchmarking executive compensation against what is earned by executives at comparable ACOs nationwide. The subpoena asks for documents that relate to how the benchmark is established and that detail the specific dollar amount allocated to the organization’s CEO, vice presidents and directors, as well as how bonuses were awarded in 2022. 

The subpoena was a direct response to a letter Berman sent to the care board Monday, which made clear that the organization would not be providing the “requested individual employee information” voluntarily without further review of the “legality and wisdom” of the care board’s focus on specific OneCare spending decisions. 

In his letter in response, Foster wrote that the accountable care organization’s attempt “to block transparency and regulatory review of how it utilizes Vermont taxpayer and insurance ratepayer funds to compensate its executives is unacceptable.” 

The Green Mountain Care Board began regulating accountable care organizations in 2016. This is the first time it has used its subpoena power in that context, staff members told VTDigger. The board’s executive director, Susan Barrett, said the board has not issued subpoenas in any of its other roles — which include regulating hospitals, healthcare facilities and insurance rates — since she began working there in late 2013. 

OneCare is Vermont’s only “all-payer” accountable care organization, or ACO, which means it contracts on behalf of its associated health care providers for health care services with both private commercial insurance companies and the publicly funded Medicaid and Medicare insurance programs. As such, the organization has been the primary vehicle that state policymakers have turned to in efforts to change how health care payments are structured.

For more than a decade, legislators and health care administrators have been trying to shift payments away from reimbursements for tests, procedures and appointments. Instead, it has moved toward per-person monthly fees to primary care providers that support increasing preventive and behavioral health care

The state’s current contract with the federal Centers for Medicare and Medicaid Services, which will enter its seventh year in 2024, puts an “all-payer” ACO at the center of that strategy. The details of a new program are still being developed at both the federal and state level.

In this context, Foster, appointed by Gov. Phil Scott in 2022, and two other newer members on the five-person board have been pushing OneCare — a subsidiary of The University of Vermont Health Network — to provide greater transparency into how it operates, and to show that its work provides value to Vermonters by promoting higher quality care and reducing health care costs.

But it was Jessica Holmes, a board member since 2014, who requested the information that resulted in the current face-off during a public meeting on June 21. 

Following a decision the previous week to cap executive compensation in the ACO’s current 2023 budget, board staff proposed new guidelines for the 2024 fiscal year’s budget that included the same cap. (The ACO fiscal year follows the calendar year.) The draft guidance also would ask that at least 40% of any executive bonuses be tied to “specific and measurable goals related to performance in (health) cost and quality metrics.”

Holmes said she wanted a fuller understanding of “the pros and cons of this approach.”

“If we’re going to impose caps on salaries or tie it to a particular benchmark, I think we should understand what that benchmark actually is,” Holmes said. She asked board staff for “just a deeper understanding of intended and unintended consequences of going into a new land here, so to speak, for regulatory action.”

But when care board staff sought more specific details about OneCare’s compensation-setting process to address Holmes’ request, the response came in the form of Berman’s Monday letter. In it, he wrote that the organization does not think this information is relevant to “the Board’s task of setting budget guidance for Accountable Care Organizations.”

“Nor do we believe that it is properly within the Board’s statutorily defined purview to cap individual expenditures by an ACO as part of the budget setting process,” Berman went on, describing that role as “reserved exclusively to an ACO’s governing body.”

Instead, Berman offered generalized statements about executive compensation, confirming that the salaries and bonuses awarded to OneCare leadership “closely conforms to the objective benchmarks,” which the ACO’s own board of managers sets internally.

The care board regulates all types of ACOs. It sets budget guidelines, and has a more lengthy process, for those that are “all-payer” and separate guidelines for those that only contract with the federal Medicare program. The latter guidelines were approved at yesterday’s meeting. 

However, the delay in receiving the requested information from OneCare led the Green Mountain Care Board to push its vote on the “all-payer” guidance documents for 2024 from yesterday’s meeting to its next meeting in mid-July, Foster said in an interview. The subpoenas will require that compensation details be provided prior to then, he said. 

The state law that created the Green Mountain Care Board gave it broad powers to “issue subpoenas, examine persons, administer oaths and require production of papers and records.” The recipient has six business days to comply, after which fines of $2,000 per day begin to accrue, and the board “may recommend” that the person or organization’s license to do business be suspended for up to six months. 

The most recent exchange follows earlier jabs back and forth between the two bodies over the care board’s regulatory reach into ACO operations. Berman forcefully pushed back on the care board’s draft budget guidance more broadly in a letter last week. 

In it, he requested that eight of nine budget targets be removed because of the “potential for incongruity between the proposed targets and the Board’s strategic direction for OneCare.” The guidelines “implicate the strategic direction of OneCare,” which is the purview of its board of managers only, he said.

But Foster’s letter alerting OneCare to the coming subpoenas suggests that recent developments have led at least some members of the board to believe greater intervention on the board’s part is now required.

The care board’s letter lists several of its recent concerns with the ACO’s past performance. Among them: the loss of Blue Cross and Blue Shield of Vermont as a participating insurer; OneCare’s slowness to continue with primary care provider payments in the wake of that loss; its recent revelation that it did not track how hospitals used money allocated for the support of affiliated primary care practices; and a study showing poor healthcare access measures compared to other ACOs nationwide on some measures and declining performance in others. 

“Despite these glaring deficiencies and deteriorating performance, last year OneCare awarded its CEO and each and every VP and Director 100% of potential variable pay,” Foster wrote.

He called the information the board is requesting “critically important” in order “to ensure not only that Vermonters’ scarce healthcare dollars are appropriately deployed, but to promote good governance by ensuring executive compensation is structured to achieve specific and measurable goals that support the ACO’s efforts to reduce cost growth and achieve its mission.”

Read the story on VTDigger here: Green Mountain Care Board subpoenas OneCare for salary details.

Updated at 5:41 p.m.

Blue Cross and Blue Shield of Vermont, the state’s largest health insurer, announced Tuesday that it will not contract with OneCare Vermont in 2023, effectively putting the brakes on its participation in the state’s “all-payer” reform program for now.

The nonprofit health insurer has been negotiating next year’s agreement with OneCare, the only active “all-payer” accountable care organization in Vermont, for months, said Sara Teachout, Blue Cross’ director of government and media relations. After failing to come to terms about legal guardrails around the use of the insurer’s claims data, Blue Cross made the decision to step away for at least a year, she said.

As part of their work together, “we give them a lot of very detailed data about our members’ claims,” Teachout said. “We need to be able to protect our individual members’ privacy.”

Accountable care organizations, or ACOs, which are private groups of affiliated health care providers, play a key role in Vermont’s current health care reform strategy. OneCare, a non-profit that is part of the UVM Health Network, contracts to bundle outcome-based payments and incentives from multiple sources — Medicare, Medicaid and private insurers — and deliver them to providers. 

OneCare CEO Vicki Loner said her company only learned on Monday about Blue Cross’ decision, which she called “very shocking to us,” especially so close to the new contract term starting January 1. 

The withdrawal of Blue Cross cuts the number of Vermonters enrolled in OneCare’s portfolio by around 93,000 people, roughly one-third of its total, and brings the amount of health care spending under contract with the ACO down by the same percentage, according to estimates for 2023 by the Green Mountain Care Board. 

OneCare’s payer contracts are currently renegotiated every year. “It’s a lot of work, and the timing is always really tight,” Loner said. 

Loner said she expects the company’s board of managers to close soon on contracts with the state Department of Vermont Health Access for Medicaid and with MVP Health, the state’s next largest health insurer. OneCare staff are still in discussions with the U.S. Centers for Medicare and Medicaid Services about the company’s contract with Medicare. 

With Blue Cross, “we were open to still staying at the table, but then I see this press release,” Loner said. “It’s an odd way to manage your negotiations, if you’re still really trying to negotiate.”

But without an agreement on protections around the claims data, Blue Cross did not see how it could continue to effectively work with OneCare, said Teachout. “That is one of the building blocks of this program, using data to improve outcomes and care,” she said. 

In general, Blue Cross is not seeing evidence among their members participating with OneCare of progress on health outcomes or cost of care, Teachout said. But the insurer’s more immediate concerns stem from a plan OneCare unveiled in August to start outsourcing its health care data management and analytics to UVM Health Network next year, she said.

Part of OneCare’s work with participating hospitals and other providers involves producing regular reports of outcomes and trends among patient groups. OneCare staff told state regulators at the Green Mountain Care Board during a budget presentation in November that its current data analytics system is not as effective as software that UVM Health Network is starting to use, and that the ACO could access the platform more inexpensively by subcontracting the work.

“Us doing this alone would cost Vermonters more money, and we would have had dueling data analytics with our largest healthcare provider and our sole member organization,” Loner told the Green Mountain Care Board then, referring to the UVM Health Network. 

OneCare plans for all its information to be kept in separate secure physical or cloud-based storage, and for only staff working on OneCare activities to access it, staff told the Green Mountain Care Board at the time.  

But Blue Cross does not feel its current contracts with OneCare have sufficient legal protection about how the insurer’s claims data could be accessed or used by UVM Health Network staff, Teachout said. Along with considerations about member privacy, independent practitioners may not want that information accessible outside of OneCare. 

Blue Cross is also concerned because UVM Health Network now offers a Medicare Advantage health plan in conjunction with MVP Health, a direct competitor.

From her perspective, Loner said, Blue Cross did not give OneCare an opportunity to respond to their concerns. “We’ve continued to say that if there are unanswered questions that you have, they are resolvable,” she said. 

Blue Cross still supports the reform effort’s goals, to improve healthcare quality and rein in costs by changing how health care is delivered and paid for, Teachout said. Blue Cross intends to continue monthly payments to primary care providers and others who provide care coordination services for its members, and to develop other ways to reward them for improvements in members’ health, she said. 

The insurer will continue to work with the state Agency of Human Services, regulators and health care providers. “We fully intend to participate and we support their work,” Teachout said.

Read the story on VTDigger here: Vermont’s largest health insurer steps away from OneCare.

[I]nsurance companies seeking to hike rates for health plans next year are making their case before state regulators this week.

The Green Mountain Care Board is hearing from the two insurance companies that offer plans through Vermont Health Connect — Blue Cross and Blue Shield of Vermont and MVP Health Care — both of which are proposing large rate increases next year.

MVP asked regulators to approve an average 11% increase. The proposed rates are up from what the company asked for when it first filed, in May, for an average increase of 9.4%.

Blue Cross’ proposed increase is even higher than MVP’s — an average of 15.6% for its plans next year — and the insurer said in May that increased prescription drug costs alone accounted for 8.8% of the hike.

In general, MVP and Blue Cross have cited the rising cost of prescription drugs and medical services as a leading driver of their proposed rate increases.

Last year, the board allowed MVP a 6.6% rate increase for its exchange plans and Blue Cross a 5.8% increase.

An independent actuarial firm, Lewis and Ellis, confirmed that MVP needs to increase its rates, projecting that MVP members will seek more care next year: about 1% more than last year.

MVP also projects costs to increase after reviewing proposed Vermont hospital budgets, which only became available to the company in recent days.

Since 2017, MVP’s market share in Vermont has roughly tripled — in three years it has grown from insuring 10% to 40% of qualified health plans in the state.

However, the insurer reports that it needs to raise administrative costs from about $40 to $42 per member per month.

Board members questioned MVP about why it needs to raise rates while its membership in Vermont has increased dramatically.

The insurer said that in New York, the other state where it operates, it has seen a decrease in membership — about a 5% loss in the last two years.

The company’s losses in New York are “outweighing” its gains in Vermont, said Matthew Lombardo, MVP’s senior leader for actuarial services.

“We are not growing overall as an enterprise, we’re contracting,” he said.

After hearing a day’s worth of testimony from MVP, state regulators and actuaries, Mike Fisher, the state’s health care advocate said that the concerns of patients were missing from the discussion about rate increases.

“It’s been interesting for me to listen today about all the actuarial considerations without any consideration of the consumer,” he said.

“The ability for Vermonters to afford coverage is key to the success of health care financing,” he added. “It’s not a nice afterthought after the experts have set the rates.”

Fisher read excerpts from comments that Vermonters have submitted to the board about the proposed rate increases.

Vermonters called the increases unaffordable and a burden on low-income residents who haven’t seen wage increases in years.

After Blue Cross pitches its rate increase on Tuesday, the board will host a public hearing on both insurers’ proposals at 4:30 p.m. at Montpelier City Hall.

Read the story on VTDigger here: MVP, Blue Cross ask regulators for 11%, 15.6% rate hikes.

[O]ver the past two months, Blue Cross and Blue Shield of Vermont has delayed tens of thousands of dollars in payments to a number of medical providers, putting a financial strain on small private practices in Vermont that rely on income from the insurer.

The insurance company says the delays stem from a new operating system rolled out at the beginning of the year that has made it difficult for the company to verify the accuracy of some claims. In the meantime, Blue Cross and Blue Shield is offering loans to providers who are faced with cash flow problems because of the glitch.

The slowed payments have posed a major threat to several independent providers who say Blue Cross Blue Shield of Vermont has yet to tell them when they will be paid for services.

Heather Parker, the co-owner of Richmond Pediatrics, said Blue Cross owes her practice tens of thousands in claims since January.

She and her husband, Paul, who are used to receiving large weekly payments from the insurer, are preparing to borrow money from their personal accounts to keep their pediatric practice afloat.

Parker said Blue Cross payments constitute about two-thirds of the revenue for the practice.

“I’m so upset because it’s not like they don’t have the money,” she said. “Our patients don’t even know what’s going on. They have no idea that they’re paying their premiums and their doctors aren’t getting paid.”

Sara Teachout, a spokesperson for Blue Cross, said the company doesn’t know when the medical practices will be paid in full.

The insurance company is offering to loan any provider portions of what it expects it will owe them in claims while it works out the kinks in its new operating system.

“The minute we saw that this could potentially be a problem, we did really work proactively to try and help all of the providers to make sure that there weren’t any financial burdens,” Teachout said.

Blue Cross has 30 days to reimburse providers for claims before they begin to accrue interest. However, in practice, Blue Cross has paid many doctors on a weekly basis, and some practices have come to rely on more regular payments from the insurer.

75 private providers impacted by delays

Susan Ridzon, the executive director of HealthFirst, an association of private medical practices in Vermont, believes that the bulk of the 75 businesses in her network have faced delayed payments.

She said that one practice had to suspend payroll, and another had a take out a line of credit to keep the business going.

The small practices are particularly endangered by the halt in income, she said.

“It’s not easy to run an independent primary care practice. When you’re messing with the cash flow like that you could put a practice out of business pretty fast, and then where do those patients go?” Ridzon said.

Although the Blue Cross tech problem has put some independent doctors at risk, Ridzon said she was glad to see the insurer advancing payments to practices. She called it “a good faith effort to quell the immediate need of cash flow crisis.”

While the new system has processed some payments regularly, the extent of the problem is not clear. The Office of the Health Care Advocate was unaware of the issue, and the Vermont Association of Hospitals and Health Systems did not respond to a request for comment.

Teachout said the company has “done everything we could to proactively reach out and work with providers because we recognize that delaying claims even a little bit could be a problem for some of them, especially the smaller ones.”

One doctor who owns a small practice and spoke with VTDigger on the condition of anonymity said he relies on Blue Cross for 50 percent of his income, and hasn’t received any payments in 2019.

“Any small business cannot miss 50 percent of its income for two and half months. It’s completely untenable, it’s bankruptcy territory,” he said.

He said it was “egregious” that the insurer would roll out a new operating system without knowing it would pose problems.

“It’s completely unacceptable that they would risk upending everybody’s business without beta testing their new system,” he said.

Teachout said while they tested the system, it’s going to take more time to fix flaws. “It’s a transition period, and we need to work through it,” she said.

“We’ve talked to hundreds of providers and most of them have been able to work with us to resolve these issues,” Teachout said.

Read the story on VTDigger here: Blue Cross and Blue Shield of Vermont delays payments to doctors, straining small practices.

[T]he state’s largest insurer must reduce its proposed rate hike for Vermont Health Connect customers, state regulators have decided.

The Green Mountain Care Board on Tuesday ruled that Blue Cross and Blue Shield of Vermont can enact an average 5.8 percent premium increase for 2019. The company had asked for a 9.6 percent increase.

The availability of additional government subsidies due to a legislative change further lowers the actual average rate hike for Blue Cross customers to 3.2 percent, officials said.

The care board agreed with some of the insurer’s rationale for raising premiums next year. But the board also said the company overestimated the impact of federal regulatory changes and must do more to reduce costs.

“We are not persuaded that (Blue Cross) is without any reasonable levers to constrain costs and premium growth while maintaining its financial solvency,” board members wrote in their decision.

Blue Cross issued a statement that didn’t directly address the care board’s rate reduction.

“We are pleased that the Green Mountain Care Board recognized Blue Cross and Blue Shield of Vermont’s unique contributions to the Vermont health care system and the communities we serve,” spokesperson Andrew Garland said. “As Vermont’s only local, nonprofit health plan, we work hard to make healthcare more affordable for all Vermonters and to help our members get the preventive care they need and pursue lifelong health and wellness.”

The Green Mountain Care Board regulates insurance rates by weighing factors including health care affordability, quality and access. The board also must consider insurers’ financial needs and solvency.

A list of insurance decisions and pending cases is available at the care board’s rate-review website.

The board last week decided to cut the proposed 2019 rates of MVP Health Care – the other insurer on the state’s health care exchange – from an average 10.9 percent to 6.6 percent.

In terms of percentages, this week’s action on Blue Cross’ rate is nearly identical: The board cut both insurers’ requested rates by about 39 percent.

There are some other common factors. For example, the care board decided that each insurer had budgeted for too much of a premium increase due to the fact that, as of next year, there will be no federal financial penalty for those who don’t buy health insurance.

The state’s individual health insurance mandate won’t take effect until 2020. So experts expect that, with the federal penalty lapsing in 2019, some people will drop their health insurance – which will drive up premiums for those who retain coverage.

The board is allowing Blue Cross to raise premiums by 1.6 percent due to that change. But the insurer had wanted 2 percent.

The board took a bigger bite out of Blue Cross’ rates in connection with another federal policy shift – the expansion of association health plans.

President Donald Trump’s administration has loosened rules on association plans, which allow small employers to band together to offer health coverage. Proponents say that change will make health coverage more affordable for small businesses and their employees.

But the state has imposed new rules on association plans in part due to concerns that those plans will drive younger, healthier people away from Vermont Health Connect, thereby increasing the insurance exchange’s prices.

Blue Cross had anticipated that effect and, in an amended rate filing last month, the insurer asked the care board for a 2.3 percent rate hike because of it.

The board, however, says it won’t allow any rate increase due to association health plans.

Board members noted that Blue Cross didn’t include any association health plan impact in its initial rate hike request in May, despite the fact that the Trump administration signaled its intent to expand those plans last fall.

Blue Cross’ “explanation as to why it made its late request for an additional rate increase casts doubt on its necessity,” the board wrote.

Also, the board said the supposed impact of association health plans is “speculative and uncertain” and does not pose any “threat to the company’s solvency.”

Federal issues aside, affordability was another reason the board lowered Blue Cross’ rate request.

The board heard emotional public comment opposing any rate hikes during a public hearing last month. In the Blue Cross decision, board members said they agree that “rising health care costs are unsustainable,” and insurers must be required “to help move the needle and keep health care costs as low as is feasible.”

To that end, the board ordered Blue Cross to reduce its proposed rates by 1 percent. Board members suggested several cost-cutting measures, including Blue Cross using “its significant bargaining power to negotiate lower prices with hospitals both in and outside of the state.”

The board also says Blue Cross must continue its participation in Vermont’s all-payer model of health care payment reform via the insurer’s partnership with OneCare Vermont, the state’s accountable care organization.

That partnership was one of the recent initiatives for which the care board praised the insurer.

“Blue Cross’ efforts to help meet the goals of the All-Payer Model Agreement and its participation in state health care reform efforts benefit all of its members,” board Chair Kevin Mullin said.

Blue Cross has complained that the care board’s annual reductions in proposed rate increases have resulted in “systematic underfunding” that has “serious, negative consequences” for the insurer’s bottom line.

Care board members, in their ruling issued Tuesday, said they are “not unmindful” of Blue Cross’ need to maintain adequate reserve funding. The board also said it has considered federal changes that have both a positive and negative effect on the company.

“We find that, on balance, the carrier has the far greater ability to effect changes that will produce lower rates and tightened spending, while the Vermont consumer has less influence, and fewer options,” board members wrote.

Read the story on VTDigger here: Care board cuts Blue Cross rate request.

[S]tate regulators have significantly reduced a proposed 2019 rate hike for one of the two insurers on Vermont Health Connect.

The Green Mountain Care Board has ordered that MVP Health Care must cut its average rate increase for individual and small-group plans on the exchange from 10.9 percent to 6.6 percent. When available subsidies are figured in, officials said the actual rate increase for many policyholders drops to 1.9 percent.

The care board praised work that MVP has done to make health care more affordable. But regulators said the New York-based insurer needs to pursue “operational and systemic improvements that will benefit its members.”

“We are convinced that MVP has the ability to become more efficient in its operations and innovative in its policies, with the goal of improving care delivery, health outcomes and reducing health care costs,” the board wrote in its decision, dated Thursday.

In a statement issued Friday, MVP President Chris Del Vecchio said the company needs “some time to determine the impact of the lower increases that were just approved.”

“The disparity among requested increases and approved rates reflects that everyone in health care is struggling to make sense of an environment of rising costs and great uncertainty,” Del Vecchio said. “MVP Health Care takes seriously our responsibility to control cost increases to the best of our ability while improving health care quality and access, and we will continue to work with our members, providers and others to do so.”

The care board regulates insurance rates as part of its mission to control health care costs, boost access and ensure quality of care. Since May, the board has been considering proposed 2019 Vermont Health Connect rate increases requested by MVP Health Care and Blue Cross and Blue Shield of Vermont.

The board has not yet decided on a rate for Blue Cross, which is the larger of the two insurers. Blue Cross’ proposed average rate hike for next year is 9.6 percent without available governmental subsidies figured in.

The care board’s deliberations have included input from the insurers, actuaries and the state’s health care advocate for consumers. Board members also heard impassioned opposition to insurance-rate hikes at a public hearing last month.

In their MVP ruling, board members said the public comments they received could be summed up this way: “For many Vermont individuals, families and businesses, health care remains unaffordable under any reasonable standard.”

At the same time, the board is obligated to consider other factors including insurers’ financial health. That requires a “balancing of statutory considerations,” the board wrote, since “unaffordable rates will hamper Vermonters’ ability to access quality care, while affordable rates that imperil an insurer’s solvency will likewise threaten Vermonters’ access to care.”

Within that context, the board agreed with some aspects of MVP’s proposed rate increases but reined in others.

For example, the board acknowledges that insurers will see some impact due to next year’s elimination of a financial penalty for the federal individual mandate. Officials expect that some healthier Vermonters will drop their insurance because of that policy change, thus increasing premiums for the rest of the population.

Vermont has enacted its own mandatory health insurance law, but that won’t take effect until 2020.

The care board is allowing MVP to increase its rates by 1.6 percent to account for the federal individual mandate change. But that’s lower than the insurer’s 2 percent proposed hike.

Similarly, the board ordered lower-than-requested rate hikes in connection with such issues as unpaid consumer premiums, contributions to reserve funds and expected hospital budget increases.

On that latter topic, board members noted that hospitals’ proposed budgets for next fiscal year are still “preliminary and untested,” and the board “has actively sought to control the growth in hospital spending by consistently ordering reductions to initial budget submissions.”

The care board also cut MVP’s rate increase by 1 percent on the basis of consumer affordability and accessibility.

The board said MVP, which covers about 25,000 Vermonters by way of the health exchange, has “priced its plans competitively, grown its Vermont membership and sought to increase price transparency.” But given the high cost of health care, those measures “are only a starting point,” the board wrote.

Board members said they want MVP to get involved with the state’s fledgling all-payer model of health care payment, which emphasizes preventive care and shifts away from the fee-for-service method. The insurer has been in talks to do so but has not yet made a commitment, state documents show.

In a statement accompanying the care board’s ruling, board Chair Kevin Mullin said he hopes MVP “will continue to pursue cost-containment initiatives and achieve additional operational efficiencies, especially moving from a fee-for-service payment methodology to reimbursement that is value-based.”

MVP also should negotiate “favorable pricing” with hospitals; reduce administrative costs; cut down on fraud and waste; and emphasize primary care, the board said.

Care board member Tom Pelham added his own note at the end of the board’s MVP decision, expressing “deep concern” about health care affordability.

Even with state and federal subsidies factored in, Pelham said premiums for Vermont Health Connect plans are still “hefty.” For example, he wrote that a couple at 400 percent of the federal poverty level would hand over 15.6 percent of their income for a standard bronze plan on the exchange.

With the state moving toward mandatory health insurance in 2020, officials must control insurers’ rates “so as to not force Vermonters into unacceptable financial and/or health-deprivation corners,” Pelham wrote.

Pelham also advocated a mid-year funding increase for the Department of Vermont Health Access to help “cushion the impact” of recent federal changes by increasing health care subsidies for consumers.

Read the story on VTDigger here: Care board cuts MVP health insurer’s rate hike request.

[A]s the only Vermont-based health care plan, it is Blue Cross and Blue Shield of Vermont’s responsibility to help build a better health care system for all Vermonters. A new system is dependent upon collaboration and time. Health plans, providers, hospitals and policymakers are working collectively to deliver better access to affordable, high quality health care and Blue Cross and Blue Shield of Vermont is a committed partner.

Reforming our health care system — including the way we pay for care — is essential to our goal of making health care coverage accessible, affordable, and accountable. These relationships and reforms change the way we work with health care providers, the way we pay for health care, and the way Vermonters engage with their health care benefits.

For this reason, Blue Cross and Blue Shield of Vermont has partnered with OneCare Vermont — Vermont’s only accountable care organization. Through this partnership, we are sharing risk for our members, including our individual and small group populations and our self-insured population in a shared risk program with OneCare Vermont.

What does this mean? It means that Blue Cross and Blue Shield of Vermont, OneCare Vermont, and the physicians and hospitals in OneCare’s network now have shared accountability for the cost of care for all of the members participating in the OneCare Vermont program. It means that all of us are combining our expertise, our resources and our programming to deliver better results. It means that we now have new incentives and opportunities for all of the stakeholders in our health care system to work together to address the forces increasing medical costs and premiums and to jointly develop effective interventions that benefit the whole system. Our partnership with OneCare is what the all-payer model is really about — making a better health care system by changing the way we consume, pay for, and deliver health care.

Our partnership with OneCare will continue to grow. As OneCare expands its provider network, and we jointly demonstrate success, BCBSVT will be able to include more of its membership — insured and self-insured — in the program.

For Blue Cross and Blue Shield of Vermont this is not new work, but it is an exciting new phase. For nearly a decade, we have advanced innovative payment models such as bundled-payments for inpatient surgeries, case rates focusing on consistent pricing for specific outpatient procedures, and payments for services with demonstrated value, such as care coordinators for the treatment of substance use disorders. During that time, we also supported the growth and development of the BluePrint for Health, and partnered with policy makers on multiple pilot programs to improve the functionality of our health care system. In many cases, we have been the only commercial health plan at the table. We have also worked with OneCare Vermont for the last four years on a shared savings program for our exchange members and we are the only commercial health plan to contract with OneCare on a risk sharing basis.

At the same time, Blue Cross and Blue Shield of Vermont has also undertaken two very significant reform efforts. In partnership with the Brattleboro Retreat, we have launched Vermont Collaborative Care, a joint venture that integrates medical and mental health data, programming and treatment to provide holistic care support to our members. We have also launched Accountable Blue, a workplace health and wellness population health initiative that is helping over 80 organizations and 70,000 Vermonters build healthier workplaces and live healthier lives every day.

Even with all of the positive work we’ve participated in over the past decade, we believe that this next phase of collaboration with OneCare Vermont, through the all-payer model, offers a tremendous, and perhaps unprecedented opportunity to improve our health care system. That being said, there is still more work in front of us if we are going to seize that opportunity and truly deliver on the potential to create a better, more affordable health care system. Real progress and change takes time and it is more important to get it done right than it is to race to the finish line. This is especially true in health care reform, where the journey does not have a finish line — as new medications and therapies arrive each day, providing relief and even curing debilitating illnesses while at the same time making it harder to achieve affordability.

Vermonters can count on Blue Cross and Blue Shield of Vermont to do everything we can to make health care reform successful. Over the past decade our partnerships have helped shape the health care landscape because we care about the health of Vermont.

Read the story on VTDigger here: Don George: Blue Cross’ role in health care reform.

Editor’s note: This story was updated on Wednesday with a statement from the Green Mountain Care Board.

[V]ermont’s health care oversight board blocked the designated public health care advocate from weighing in on affordability during a hearing Monday on insurance rates for the coming year.

The Green Mountain Care Board, the quasi-judicial body that regulates health care on behalf of Vermonters, yielded to a request from the state’s largest insurers to block Mike Fisher’s testimony.

Kevin Mullin, chair of the Green Mountain Care Board, confirmed Monday afternoon that the board upheld a motion from insurance companies to exclude a report and testimony by Fisher, the state’s designated health care advocate, from hearings this week on rate changes. He declined to say why.

Mullin and Judy Henkin, the board’s general counsel, again declined to explain the decision in a phone call Monday evening. They said a transcript from the hearing would be available for review later this week.

In a statement issued after this story was published, the Green Mountain Care Board described Fisher’s report as the “opinion” of a former lawmaker. “The ruling was limited to the legal issue of the admissibility of Mr. Fisher’s Expert Report and his testimony about its contents, and did not prohibit the HCA from exercising its statutory right to fully participate in the rate review process and to present admissible evidence and testimony at a hearing, in a manner consistent with Vermont law,”

In other words, while Fisher was barred from submitting testimony to the board in the formal rate case hearing, he is allowed to speak at a public hearing held on Tuesday.

The statement also said “it is not appropriate for board members, or the hearing officer, to publicly discuss issues raised by the parties,” because the case is still open.

Sara Teachout, spokesperson for Blue Cross and Blue Shield of Vermont, said that her organization moved to dismiss the inclusion of Fisher’s testimony as an “expert witness” because he did not meet the legal criteria for providing expert testimony.

“They are parties to the hearing,” Teachout said of the office of the health care advocate, which is part of Vermont Legal Aid. “It was just the type of testimony he was trying to introduce.”

In their motion, attorneys for Blue Cross and Blue Shield argue that Vermont law requires the exclusion of “opinion testimony” on the legal standards the board applies when ruling on rate increases.

The Green Mountain Care Board has to determine whether a proposed rate meets a number of criteria, including affordability and the solvency of insurers, according to Vermont statute.

“Mr. Fisher’s proffered opinion on ‘affordability’ is improper and inadmissible as a legal conclusion,” Blue Cross’ attorneys wrote in their motion.

Teachout added that Fisher’s attorney had asked to have him included as a factual witness during the hearing, which Blue Cross did not object to, but that this request was denied by the board.

Blue Cross requested a 7.2 percent average rate increase next year for premiums offered through Vermont Health Connect. By law, the board has to hold public hearings on proposed rate changes, during which the insurer, Office of the Health Care Advocate and members of the public can testify.

Fisher filed an expert witness report with the board on July 10 to be included as part of the hearings for Blue Cross and MVP Health Care proposed rate increases. MVP requested an average 10.9 percent increase in premiums offered through Vermont Health Connect, and will argue its case in a hearing on Tuesday.

Both insurers’ proposed rate hikes are artificially inflated by a legislative change made earlier this year to preserve consumers’ access to federal subsidies. That change artificially inflated the price of silver level plans on Vermont Health Connect, though customers won’t actually pay those prices.

The lower averages of 4.7 percent for Blue Cross and 6.4 percent for MVP are a better indicator of the proposed increases consumers face in 2019.

Fisher, former vice-chair of the House Health Care Committee when Act 48 was drafted, declined to comment on Monday. He made his case for inclusion as an expert witness in a report filed in response to Blue Cross’ motion to block him.

“As one of the key legislators who assisted in navigating Act 48 through the whole legislative process, I have extensive knowledge of the politics and policies that led to the creation of the Green Mountain Care Board and Vermont’s current rate review process,” Fisher wrote.

Fisher concluded in his report that the board should consider affordability and access to quality health care as “independent standards, separate from a traditional actuarial analysis.”

Paul Schultz, actuary for Blue Cross, testified during the hearing that the proposed rate increases are necessary to maintain solvency for the insurance company, as required by the Vermont Department of Financial Regulation.

Blue Cross has implemented cost-containment measures such as encouraging members to see primary care providers when possible rather than going to hospitals and negotiating decreases in drug prices, Schulz said. To maintain solvency, the nonprofit insurance provider needs to be able to fund its reserves, he said.

When asked whether Blue Cross’ rates were affordable, Schultz responded that this was an “interesting question.”

“Our rates can only be unaffordable if the underlying cost of care is unaffordable,” he said.

Green Mountain Care Board member Tom Pelham said that he felt Fisher could have provided insight into how affordable Blue Cross’ rates are after Vermont Health Connect subsidies have been applied.

“Given Michael’s history of health care reform in Vermont and the position he holds now, it seems to be that it would be valuable to hear from him,” Pelham said in an interview Monday night. He added that he had worked with Fisher on health care reform when they had been legislators and knew of his experience first-hand.

“They are at the end of the phone lines of people who call for help and who feel underserved by the health care system,” he said of the advocate’s office.

Due to a late amendment filing by Blue Cross, the board will take an additional 30 days to review the proposed rate changes.

A hearing on MVP Healthcare’s proposed rates will take place in Room 10 in the Statehouse starting at 9 a.m. Tuesday morning. A public hearing on the rates with be held from 4:30 to 6:30 in the Memorial Room at Montpelier City Hall.

Read the story on VTDigger here: Consumer advocate barred from insurance rate hearing; state won’t say why.

[W]hile the possibility of importing prescriptions from Canada grabbed headlines this spring, Vermont officials have been working on other measures designed to drive down drug costs.

Gov. Phil Scott has signed S.92, which features two different approaches to the state’s prescription problem: It requires more detailed financial reporting from insurers and drug companies; and it promotes lower-priced alternatives to expensive speciality drugs called biologicals.

The statute – now labeled Act 193 – also calls for a group representing state government, pharmacies, hospitals and health care providers to “investigate and analyze” prescription pricing.

The goal, officials say, is to “identify opportunities for savings for Vermont consumers and other payers, and for increasing prescription drug price transparency at all levels of the supply chain.”

Escalating prescription drug prices are a concern at both the state and federal level, and there seems to be no end in sight despite multiple policy proposals.

The state’s largest insurer, Blue Cross and Blue Shield of Vermont, says its specialty drug costs jumped 21.2 percent in 2017 – a trend driven largely by manufacturers’ price hikes. The insurer has said prescription prices are one factor behind its proposed rate hikes for next year.

This year, the Legislature passed – and the governor signed – a bill that lays the groundwork for importing some prescription drugs from Canada in order to create “significant” savings. But that statute offers no immediate relief and is dependent on approval from the federal government, which some say is a “long shot.”

In comparison with the Canadian import issue, Act 193 didn’t garner much attention during the 2018 legislative session. But some say it could have significant impact.

The statute builds on drug-cost transparency mandates in Act 165, which was passed in 2016. At the time, legislators wrote that, “in order to contain prescription drug costs, it is essential to understand the drivers of those costs, as transparency is typically the first step toward cost containment.”

Act 193 takes several additional steps in that direction by expanding the amount and type of drug-pricing information that the state collects and reports each year. For example:

• Insurers, when filing their rate proposals with state regulators, also must disclose details about the impact of prescription drugs on premiums.

• Insurers also must provide the Green Mountain Care Board with lists of the 25 most frequently prescribed drugs; the 25 most costly drugs; and the 25 drugs with the biggest annual price increases.

The care board then will produce a “consumer-friendly report that demonstrates the overall impact of drug costs on health insurance premiums.”

• Both the Department of Vermont Health Access and major commercial insurers must create annual lists of 10 prescription drugs for which their costs have climbed significantly – either by 50 percent or more over five years or by 15 percent or more in the past year.

The state already had been collecting such data, but the addition of private insurers is new. And Nancy Hogue, the department’s pharmacy services director, said a shift in the way drug costs are calculated under Act 193 “should provide a more accurate measure of the impact of cost increases on the state.”

• The state Attorney General’s Office will work from the lists provided by the department and insurers to identify 15 drugs “on which the greatest amount of money was spent across all payers” in the past year. The attorney general then will require drug companies to justify those increases and explain “each factor that specifically caused the net cost increase.”

• Information about high-cost drugs will be released publicly via the attorney general and Green Mountain Care Board. There also will be an annual report to the Legislature.

The attorney general’s office already is producing that report for drugs purchased by the state. But under Act 193, the office will have more data to work with given the involvement of private insurers.

• Drug companies must notify the state attorney general if they are introducing a new, high-cost prescription drug. The companies will have to provide information about marketing and pricing plans as well as estimated demand.

• The statute bans so-called “gag rules” that may prohibit pharmacists from disclosing pricing information and offering lower-cost drugs. That’s also a tenet of President Donald Trump’s prescription drug plan; the president has called such rules “a total rip-off.”

Taken together, the new requirements in Act 193 are supposed to shed more light on a notoriously complex and opaque system. When introducing the legislation to the House in April, Rep. Lori Houghton, D-Essex, said drug costs are “about as transparent as a pool of mud.”

“Today, we have limited information about how drug prices affect insurance premium increases or what factors increase the price of a drug,” Houghton said at the time.

Another aspect of Act 193 is more obscure, but it has potential for providing greater long-term savings.

The statute tackles the issue of biologicals, which are a type of drug generally derived from a living organism. Vaccines are one example, as are drugs like Humira, used to treat inflammatory conditions like arthritis and Crohn’s disease, and Neulasta, which fights infection in cancer patients undergoing chemotherapy.

Biologicals are considered specialty drugs, and they are not cheap. In a recent press release, federal Food and Drug Administration Commissioner Scott Gottlieb said biologicals “represent some of the most clinically important, but also costliest products that patients use to promote their health.”

So Act 193 says Vermont pharmacists, when receiving a prescription for a biological, must choose “the lowest-priced interchangeable biological product” unless the prescriber or purchaser objects. An “interchangeable biological” is akin to the generic equivalent of a brand-name drug.

The statute also orders insurers to apply the same cost-sharing requirements to interchangeable biologicals as they apply to generic drugs.

There’s a lot of money at stake in making the switch to lower-cost biologicals, also known as “biosimilars”: Blue Cross and Blue Shield of Vermont estimates that it could save $7 million to $14 million per year.

The trouble is, the FDA has not yet allowed any lower-priced biologicals to be considered “interchangeable” with their higher-priced counterparts. Hogue said federal regulators consider 11 drugs to be “biosimilar,” but she said “interchangeability is a higher burden of approval a manufacturer must pursue with the FDA.”

Sara Teachout, a spokesperson for Blue Cross and Blue Shield, said there’s hope that the FDA will grant some interchangeable designations over the next several years. The biologicals language in Act 193, she said, means Vermont “will be in a good place when that happens.”

Overall, Teachout said the insurer backed the provisions of Act 193. “We’re supportive of anything that would lower drug prices,” she said.

Read the story on VTDigger here: State takes aim at prescription drug prices.

[A]n ongoing fight over federal family planning money has brought together an unlikely group of allies in Vermont.

Twelve organizations — including the state Health Care Advocate, University of Vermont Medical Center and two insurers — have formed a coalition that “strongly opposes” a proposed federal rule change that would limit how so-called “Title X” funding can be spent.

At the national level, the Title X debate is about abortion. But members of the Vermont coalition are concerned about limiting access to basic health care services for low-income residents.

The federal proposal “will significantly restrict access to necessary care for both women and men, particularly in rural, hard-to-serve areas of Vermont,” coalition members wrote in a statement issued Tuesday.

Title X funding pays for family planning and preventative health services. It is focused on low-income and uninsured patients, and the program serves about 4 million people per year nationally.

By federal statute, Title X money cannot be used for abortions. But in May, the U.S. Department of Health and Human Services proposed updated regulations that would restrict Title X funding from going to entities that provide abortions.

In addition to requiring “clear financial and physical separation” between Title X projects and abortion-related programs, the department also said it was moving to “prohibit referral for abortion as a method of family planning” at Title X providers.

In a statement supporting the change, White House Press Secretary Sarah Huckabee Sanders said the proposal “fulfills President Donald J. Trump’s promise to continue to improve women’s health and ensure that federal funds are not used to fund the abortion industry in violation of the law.”

Sanders said the rule would not cut Title X funds, but rather “would ensure that taxpayers do not indirectly fund abortions.”

The change spurred outrage from the sole Title X provider in Vermont – Planned Parenthood of Northern New England. Meagan Gallagher, the organization’s president and chief executive officer, has called the Trump administration’s proposal “the most offensive and dangerous attack on women’s rights in this country.”

Lucy Leriche, Planned Parenthood’s vice president of Vermont public policy, said Tuesday that the federal proposal is “basically a gag rule” regarding abortion services.

“If a health care center is receiving Title X funds, doctors would essentially have to lie to their patients about what their options are,” Leriche said.

Abortion-counseling issues aside, Planned Parenthood administrators also argue that many low-income patients in Vermont would lose access to services like birth control, cancer screenings, sexually transmitted disease treatment and women’s health exams if the organization loses its Title X funding.

Planned Parenthood gets nearly all of Vermont’s Title X funding allocation, which falls between $775,000 and $781,000 annually. In 2017, Planned Parenthood says it served nearly 10,000 people in Vermont “who rely on Title X for affordable birth control and reproductive health care.”

Theoretically, if the new federal regulations are adopted, the Vermont Department of Health could choose a different provider or providers for Title X services. That’s already been proposed by Vermont Right to Life.

But the newly organized coalition isn’t advocating for such a change. Rather, the group says the Trump administration’s proposal violates medical ethics and will reduce health care services for Vermonters.

“We call on the federal Health and Human Services Department to withdraw this proposed rule in the interest of public health and for the benefit of low-income patients of Vermont,” the group’s statement says.

Signing the statement were the Bi-State Primary Care Association; Blue Cross and Blue Shield of Vermont; MVP Health Care; the Office of the Health Care Advocate; Planned Parenthood of Northern New England; University of Vermont Medical Center; Vermont Association of Hospitals and Health Systems; Vermont Care Partners; Vermont Coalition of Clinics for the Uninsured; Vermont Medical Society; Vermont Program for Quality in Health Care; and VNAs of Vermont.

Access was a common concern among some signatories.

“While the UVM Medical Center’s funding is not directly impacted by this new rule, we are concerned that it would restrict access to care for our patients, their families and neighbors,” said Eileen Whalen, the hospital’s president and chief operating officer.

“We strongly believe that everyone in our community should be able to get the health care they need from the provider they are most comfortable with,” she said.

Sara Teachout, a spokesperson for Blue Cross and Blue Shield, said the insurer joined the Title X coalition “because the federal changes will have a negative impact on the health care services that our members are entitled to receive.”

“Access and insurance coverage of reproductive health services is a policy choice that is protected under Vermont law,” Teachout said.

The state medical society is concerned about “access to frontline services,” said spokesperson Jill Sudhoff-Guerin.

The society also is concerned about any rule limiting doctors’ communications about care options. “The physician-patient relationship is really based largely on trust, and that has to do with being able to give the patient all of the options in an honest, candid way,” Sudhoff-Guerin said.

Mike Fisher, the state’s chief health care advocate, says he has a “systemwide concern about access to care.”

Fisher said Planned Parenthood “provides a really important community presence throughout the state.” The Title X coalition’s statement should be seen more broadly as “a statement of support for patients who need care,” Fisher said.

He noted the diversity of the coalition’s members, saying it’s not often that those entities agree. “It’s really important that, when we can speak as one voice, we do,” Fisher said.

Leriche said she believes the coalition’s support is an indication of “how terrible this new rule is.”

“We are incredibly grateful for the support of our colleagues in the health care industry in Vermont,” Leriche said. “It really is a remarkable coalition of organizations that signed on. It underscores that everyone providing health care in Vermont truly cares about the patient.”

The federal government is taking comment on the proposed rule through the end of July. Comments can be filed via a link at the top of the rule’s Federal Register notice.

Planned Parenthood also is trying to rally support for its cause via its advocacy and political arm.

Read the story on VTDigger here: Vermont health care coalition protests Title X change.

[G]ov. Phil Scott has signed a bill that could lead to increased financial backing for the state’s addiction-treatment system.

S.225 authorizes the state to develop pilot programs for increasing coverage of the “hub and spoke” medication-assisted treatment program by commercial insurers like Blue Cross and Blue Shield of Vermont.

While commercial insurance covers some aspects of the treatment program, the initiative is supported primarily by Medicaid. And some providers say they are running deficits because they’re treating all opioid-addicted patients regardless of their insurance coverage.

The bill garnered support from the state’s insurers and from providers seeking more financial stability for an increasingly in-demand service.

“We should be doing everything we can to encourage Vermonters to access this treatment, and S.225 will improve the sustainability of our programs,” two University of Vermont Medical Center administrators wrote in testimony on the bill last month.

Vermont’s five-year-old medication-assisted treatment program — also called the Care Alliance for Opioid Addiction — uses two kinds of outpatient facilities spread throughout the state.

The “hubs” are treatment centers offering methadone and buprenorphine for those addicted to opioids. The less-intensive “spokes” are medical practices offering buprenorphine.

State Department of Health statistics show that hub and spoke usage continues to grow even as the state has nearly eliminated waiting lists for hub services.

A recent study showed big drops in overdoses and opioid usage among hub and spoke participants. The program has received national recognition.

But the service is expensive, and providers say they’ve been struggling with a lack of reimbursement for patients not covered by Medicaid. Last month, the Bi-State Primary Care Association said its members are “treating dozens of (commercially insured) and Medicare patients with addiction and not being reimbursed for these services.”

“They are treating all of the patients equally because that is the better clinical model. They do this at a cost, however,” wrote Georgia Maheras, Bi-State’s Vermont public policy director, in a letter to the House Health Care Committee.

Maheras said Bi-State’s members “are eager for an all-payer solution and appreciate that this bill helps us get closer to that solution.”

Administrators with the Chittenden County Spoke Team at UVM Medical Center said they serve 600 people covered by Medicaid. But they also treat more than 300 people who are uninsured; have commercial insurance; or are covered by Medicare, and that causes funding problems.

“Vermont’s program providers have been treating all patients regardless of their insurance coverage, resulting in program deficits,” UVM Medical Center’s legislative testimony says. “This is not sustainable, as we have seen dramatic increases in the number of patients accessing treatment.”

Contrary to some characterizations during the debate over S.225, commercial insurers like Blue Cross do pay partially for medication-assisted treatment in Vermont.

Sara Teachout, a spokesperson for Blue Cross and Blue Shield, said the insurer currently pays for hub treatment. And in the spokes, Blue Cross “already pays for the visits with professional staff, medication and lab testing,” Teachout said.

But other aspects of the program are covered only by Medicaid. These are sometimes referred to as “care-coordination” or “wraparound” services, and they are considered critical for recovery from addiction.

Teachout said examples of care-coordination services not covered by Blue Cross include “help organizing transportation to appointments, making appointments, job counseling, housing assistance, making appointments to see counselors, etc.”

So S.225 says the Department of Vermont Health Access should “develop pilot programs in which one or more health insurers contribute funding” in order to provide more reimbursement for medication-assisted treatment.

The bill says insurers should be partners in those pilot programs. And both of Vermont’s commercial insurers — MVP, and Blue Cross and Blue Shield — have said they support the effort.

Scott signed S.225 on Monday. The bill is “in line with the governor’s commitment to addressing the opioid crisis with a focus on treatment and recovery, in conjunction with prevention and enforcement,” said Rebecca Kelley, Scott’s communications director.

“This bill supports this work by promoting consistency across insurers,” Kelley said.

Teachout said a pilot program is necessary to work through the logistics of expanding insurance coverage for medication-assisted treatment. That includes consideration of the state’s “all payer” health care payment reform project and OneCare Vermont, the statewide accountable care organization.

“We wanted it to coordinate with all the other things we’re doing with payment reform,” Teachout said.

As for how big of a change S.225 could mean for Blue Cross and Blue Shield, Teachout said that’s not yet clear. “It just depends on how it gets worked out,” she said. “That’s why we want to do the pilot.”

S.225 also mentions the “potential integration of Medicare funding into opioid treatment programs.” Kelley confirmed that talks are underway to bring more federal funding into the state’s treatment mix.

“The administration — led by our Agency of Human Services — is continuing discussions with the Centers for Medicare and Medicaid Services to seek Medicare payment for costs associated with (medication-assisted treatment) in spoke practices,” she said.

Read the story on VTDigger here: New law could boost payments for addiction treatment.

[T]he state has agreed to pay $3.5 million to Blue Cross Blue Shield of Vermont to settle billing issues from 2015 involving Vermont Health Connect.

The settlement is for health insurance premiums that Vermont Health Connect didn’t pay in 2015, and health care claims the insurer paid before customers’ coverage was retroactively terminated.

The insurer originally thought it would need $6.2 million to settle, and then invoiced the state for $4.6 million. An accounting reconciliation process brought down that number to $3.5 million.

This is the second settlement the state has paid to Blue Cross for reconciliation of accounts for Vermont Health Connect customers. In 2014, the state paid the company $1.6 million. Both parties are expecting to pay another settlement for 2016.

Don George, the chief executive officer of Blue Cross, said the insurer hopes Vermont Health Connect will be able to reconcile cases monthly in 2017 to avoid having to do an annual process that results in a settlement. He does not know if that will happen.

Cassandra (Gekas) Madison, the director of health care eligibility and enrollment at the Department of Vermont Health Access, said the state is hoping to reconcile customers accounts monthly in 2017. The first test will come in February, when the state will try to reconcile accounts from January, she said.

“Going forward, we expect to have a true-up every year,” Madison said. “But as we put more controls in place and more automated processes or more efficient processes for monthly reconciliation, it should lower the amount of money that it needs to change hands at the end of the year.”

Both parties say that open enrollment—the period between Nov. 1 and Jan. 31 when people can change their plans on Vermont Health Connect for any reason—has gone very smoothly this year. That’s in contrast to last year, when the state had to turn off a function of the website in order to prevent errors.

The state says 91.5 percent of health insurance renewals could be processed automatically on the first try, and ones that couldn’t be handled automatically were processed that same week. The previous year, about 80 percent of renewals were processed after several tries, and the rest were handled last January.

The state says payment processing errors are also way down to less than one-tenth of 1 percent, meaning that fewer people are showing up to doctors or pharmacists and being told they don’t have coverage.

Read the story on VTDigger here: State to pay Blue Cross $3.5 million.

[M]iddle-aged Vermonters pay higher prices than 13 other states for health insurance through the state’s online marketplace, and the prices will continue to go up if state regulators approve new rate hikes proposed by insurers.

A new analysis from the Kaiser Family Foundation says that, before receiving subsidies, Vermonters age 40 paid $465 per month for the lowest-cost silver health insurance plan through Vermont Health Connect in 2016.

The study uses the prices in major cities to estimate how much people in each state pay. Burlington is the major city used for Vermont, but all residents pay the same prices. The study does not include state subsidies for premiums.

By comparison, four cities in New York had an average monthly price of $366 for the lowest-cost silver plan in 2016; two cities in Connecticut paid $316; Portland, Oregon paid $240; and Washington, D.C. paid $228.

The average rate calculated by Kaiser was $277 per month for a 40-year-old, or about 60 percent of what Vermonters pay.

“Vermont is a little unusual among the states,” said Cynthia Cox, associate director of health reform for the Kaiser Family Foundation. “New York is the other state where everyone is charged the same premium regardless of how old they are, and what that means is people who are younger will pay more than they otherwise would. “

“If I made the same chart for, say, a 64-year-old, then Vermont would look really cheap,” Cox said. “But if there were no subsidies in this market, then I think you would see fewer young people in Vermont signing up for coverage, which would cause premiums to increase more.”

Vermont has two health insurers on the exchange — Blue Cross Blue Shield of Vermont and MVP Health Care. Blue Cross has asked regulators to increase premiums by an average of 8.2 percent in 2017; MVP has asked to increase by an average of 8.8 percent. Hearings on the matter are scheduled in July.

The Kaiser analysis projects that the price of the lowest-cost silver plan for a 40-year-old could increase to $482 in 2017 if regulators approve the requested rates. Across the 14 cities studied, insurers requested to raise rates for silver plans by 11 percent to an average of $307—or 64 percent of what Vermonters could pay.

Cory Gustafson is the spokesperson for Blue Cross, which controls 90 percent of the Vermont Health Connect market. He said insurance rates increase in response to three factors: more hospital stays and visits to doctors’ offices; higher prices for medical care and prescription drugs; and the so-called “cost shift” in which commercial insurance premiums subsidize low reimbursements payments from Medicare and Medicaid for doctors and hospitals.

In Vermont, about two-thirds of individual customers receive assistance from the federal government, or from two types of subsidies that the state funds through its umbrella Medicaid budget. The other one-third of individual customers—who make about $47,000 or more per year—must pay the full amount of the premium.

Additionally, small businesses with 100 or fewer full-time employees are required to pay for a portion of employees’ health insurance through Vermont Health Connect. The rest of the unsubsidized premium comes directly out of employees’ paychecks.

Read the story on VTDigger here: Kaiser: Vermont has highest health insurance premiums.