Executive Order begins first phase of comprehensive affordability initiative; additional legislative reform required in 2027
VermontBiz Governor Phil Scott today signed Executive Order 05-26, launching the first phase of a comprehensive Healthcare Affordability Initiative, because Vermont can no longer afford to continue healthcare policies that have produced some of the highest insurance costs and fewest affordable choices in the nation.
The Executive Order directs executive agencies and departments to immediately use existing executive and regulatory authority to improve affordability. However, executive authority alone won’t solve this problem, which is why the Executive Order also directs agencies and departments to develop a broader package of statutory reforms for the Legislature to act on during the 2027 legislative session.
"For too long, Vermonters have paid some of the highest health insurance premiums in America while having fewer affordable choices than people in neighboring states,” said Governor Scott. "We cannot continue following the same old policy path and expect different results. It's time to modernize Vermont's healthcare laws by adopting practical reforms that have already proven successful in many other states."
Many of Vermont's current laws and regulations were enacted during a decades-long period when state policy was crafted toward creating a government-run healthcare system, which ultimately proved financially unworkable. However, many of the underlying statutory and regulatory frameworks adopted during that period remain in place today which makes it challenging to accomplish health insurance affordability.
The Executive Order begins changing that policy direction by directing state agencies to pursue reforms that can be implemented immediately under existing law, including:
- Modernizing health insurance rating rules to improve affordability while maintaining strong consumer protections;
- Developing a federal Section 1332 State Innovation Waiver to pursue reinsurance and other proven strategies that have lowered premiums in many other states;
- Reviewing and modernizing Vermont's framework governing Association Health Plans (AHPs), Multiple Employer Welfare Arrangements (MEWAs), and other small-business health coverage options;
- Evaluating tax incentives that encourage small employers to offer affordable coverage through Individual Coverage Health Reimbursement Arrangements (ICHRAs); and
- Encouraging the Green Mountain Care Board to fully utilize its existing statutory authority to implement reference-based pricing reforms and pursue system-wide savings that benefit all Vermonters.
Many of these approaches are already being used successfully by neighboring and peer states to expand affordable choices, strengthen insurance markets, and reduce premiums. By adopting them, Vermont will no longer be as much of an outlier in comparison to other states.
This Executive Order reflects the same governing philosophy the Scott Administration has applied to other major challenges facing Vermont. Executive action coupled with legislative action will modernize Vermont's healthcare laws, remove unnecessary barriers to affordable health insurance options, expand consumer choice, and improve the long-term affordability of Vermont's health insurance marketplace.
"As governor, I’ve made fighting for affordability the defining priority of my Administration," Governor Scott said. "Whether we're talking about healthcare, housing, education, energy or the overall cost of living, Vermonters need a Legislature that will work with me to adopt practical, mainstream reforms that will produce better results."
The Executive Order takes effect immediately.
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