by Devon Green, VP of Government Relations, VAHHS
Legislative Update
The first week of the session normally has a back-to-school vibe, where everyone is getting their feet under them. Not this year. The legislature is already diving in on federal issues, rural health transformation, and—most importantly—affordability. At VAHHS, we’re hitting the ground running as well.
Here’s the work hospitals have been doing in the off-session and will continue to do going forward:
- Hospitals, the GMCB, and the legislature reduced expenses by $230M for FY 2026
- In response to the GMCB benchmarks, hospitals submitted budgets that eliminated $230M in operational expenses.
- The Act 55 prescription drug cap also reduced premium inflation.
- Going forward, hospitals pledge to eliminate operating expenses by an additional $100M over two years—FY 2027 and FY 2028
- The GMCB's Oliver Wyman Report recommended cutting administrative and operating expenses by $300M by FY 2030.
- In partnership with the GMCB and the legislature, hospitals would achieve reductions of $330M by 2028, two years ahead of the Oliver Wyman timeline.
- Hospitals will partner with the State and communities on remaining savings through regionalization
- For further savings, estimated to be about $40M over two years, hospitals will continue to partner with the State and their communities to eliminate, reduce, or consolidate service lines.
Here’s the recap of what the legislature covered this week:
Previous Legislation: The health care committees took stock of recent health care reform efforts. Senate Health and Welfare Committee looked at Act 167 of 2022, which requires hospital transformation and hospital global budgets. The House Health Care Committee went over all of the health care bills passed last year, including Act 68 and the following initiatives:
- The Green Mountain Care Board to establish reference-based pricing this year
- AHS to deliver a statewide health care delivery strategic plan by 2028
- Hospitals to reduce spending by 2.5% for the current budget—accomplished, as long as hospitals can achieve their proposed budgets
- Hospitals to report on executive compensation—accomplished
Immunizations: The House Health Care Committee dove into H.545, which streamlines and empowers state authorities to make vaccine recommendations, protects providers following standing orders, and reinforces insurance coverage of vaccines. VAHHS supports this bill.
Federal Legislation: The Agency of Human Services presented an update to the Senate Health and Welfare Committee on H.R.1 impacts to Vermont, including:
- Elimination of $1.1M in Medicaid funding to Planned Parenthood of Northern New England, which will be covered by general fund dollars in the Budget Adjustment Act.
- Eligibility changes based on immigration status, 6-month Medicaid renewals, work requirements, and annual Vermont Health Connect plan renewals between 2026 and 2028
- Provider tax reduction on 11/1/27, resulting in a $18M loss to the general fund each year for five years for a total ongoing loss of $87M
- State Directed Payments for Blueprint for Health Patient Centered Medical Homes and Blueprint for Health Community Health Teams will be capped by 10% per year starting in 2028 until payments are 100% of Medicare
Green Mountain Care Board: The Green Mountain Care Board updated the House Health Care Committee on its efforts, including $230M in savings from hospitals for the FY 2026 budget, making Vermont the state with the second-lowest premium increases this year. The Green Mountain Care Board also spoke to its reference-based pricing work and how it would be incorporated into the FY 2027 budgets this year.
Blue Cross Blue Shield of Vermont: Blue Cross Blue Shield of Vermont presented to the House Health Care Committee and noted that it has made a $47M gain through September and the fourth quarter is tracking with expectations. They also mentioned that they have paid off the $30M note from Blue Cross Blue Shield of Michigan. They cautioned that solvency restoration is a multi-year process.
Department of Financial Regulation: House Health Care also heard an update from the Department of Financial Regulation, which spoke to its bill, H.585. When asked if we are addressing the cost of care, the Department of Financial Regulation noted that it will take a while to dig ourselves out, but we are going in the right direction due to Green Mountain Care Board enforcement of hospital budgets. The Department of Financial Regulation is also interested in promoting more risk sharing arrangements between providers and payers and supportive of growing Vermont’s population.