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.
