by State Auditor of Accounts Doug Hoffer We were disappointed to learn Tuesday that the Governor vetoed legislation that would have provided broad property tax relief to homeowners and renters and made health insurance more affordable for Vermonters who were hit worst by Congress’s failure to extend premium subsidies.
Five years ago, our office introduced to legislators and the Scott Administration the concept of “reference-based pricing,” a tool that lowers the amount paid for some excessively priced medical services while pushing health care providers to operate more efficiently. We estimated that if reference-based pricing was applied to the State employee health plan, the State would save more than $16M annually.
Each year since we issued our report we have urged policymakers to act. The State has not yet done so, missing the opportunity to save taxpayers as much as $80M in unnecessary medical spending.
Had reference-based pricing been applied to the teachers’ health plan as well, the savings would have been even larger. The most thorough analysis conducted estimated that reference-based pricing would have saved the State employee health plan and the teachers’ plan $48 million in 2022 alone.
We were encouraged last year when the Legislature passed a law directing the Green Mountain Care Board to implement reference-based pricing for all health plans beginning in a couple years. And we applauded their work this year to accelerate the initiative by applying it to the teachers’ plan and for individuals and small businesses who buy insurance through Vermont Health Connect.
The Governor’s veto means Vermonters will not enjoy the millions in savings on their property tax bills and their medical bills.
Lowering health care costs through reference-based pricing was an opportunity to make Vermont more affordable for all Vermonters now not later. Everyone who pays a property tax bill or sends a rent check, and everyone who faces sticker shock due to Congress pulling the rug out from exchange subsidies, would have seen relief.
Despite the veto, the Scott Administration could still move forward with reference-based pricing for the State employee health plan for 2027. Another year of delay means another year Vermonters must wastefully spend tens of millions of dollars on unjustifiably high medical prices.
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