The sense of urgency that dominated last month’s joint hearing on Vermont’s crumbling healthcare system has translated into fast-moving legislative action—but even lawmakers acknowledge the proposed changes will be hard and may strain an already challenged system.

Following powerful testimony about solvency threats facing hospitals and insurers, and the unsustainable financial load carried by employers, the Legislature is advancing three healthcare bills with wide-ranging implications: H.482, S.63, and S.126.

Senate Works to Advance H.482: Emergency Authority to Prevent Collapse

The Senate Health and Welfare Committee continues to review H.482, which would temporarily give the Green Mountain Care Board (GMCB) emergency powers to reduce payments to hospitals under specific circumstances—specifically if a domestic insurer is facing an “acute and immediate” solvency threat. The reductions would apply only to hospitals with recent operating surpluses and over 135 days cash on hand.

Another provision would authorize the GMCB to appoint independent observers to hospitals that misrepresent data or deviate from approved budgets. Hospital leaders have expressed concern that these moves could damage and destabilize already struggling institutions. Still, lawmakers insist that temporary measures are needed to stave off deeper collapse.

House Committee Acts on S.126: Cost Cap and Structural Reform

The House Health Care Committee has advanced S.126, a sweeping reform bill with both immediate and long-term implications. Central among them is a short-term measure to reduce hospital budgets by 2.5% for FY26, by October 2025. While this is intended to offer near-term relief to commercially insured Vermonters, the reduction will likely require hospitals to make steep budget cuts next year, adding further pressure to a system already operating on razor-thin margins.

Beyond the cap, S.126 sets the stage for broader structural reform. It directs the GMCB to develop a new hospital sustainability plan, lays the groundwork for potential reference-based pricing, and calls for investments in primary care to reduce long-term costs.

S.63 Tightens Oversight on ACOs and Health IT

Also voted out of House Health Care is S.63, which strengthens oversight of Vermont’s Accountable Care Organization (ACO) and shifts coordination of the state’s health information technology (HIT) plan to the Department of Vermont Health Access. The GMCB would retain final approval authority, but the bill is designed to increase transparency and clarify roles in a fragmented regulatory environment.

No Easy Fix—and No Clear Lead

What unites all three bills is a shared acknowledgment that Vermont’s healthcare crisis is not theoretical—it is unfolding in real time. Employers are preparing for another round of double-digit premium increases, and hospitals are bracing for constrained revenue. With no single entity clearly empowered to balance system stability, affordability, and access, legislators are acting out of necessity—but with uncertainty about whether the interventions will go far enough, or too far, in a system already at the breaking point.

Business on the Brink

The Vermont Chamber continues to hear from businesses facing impossible decisions. Health insurance costs are cannibalizing other investments, employees are shouldering more of the burden, and many employers worry they’ll soon be forced to drop coverage altogether.

Stabilization, if it’s possible, won’t be painless. But doing nothing is not an option.