A joint hearing of the Senate Health and Welfare and House Health Care Committees made it clear that Vermont’s healthcare system is beyond warning signs—it is in active crisis. Testimony from the Green Mountain Care Board (GMCB), Agency of Human Services (AHS), and hospital leaders revealed a system in financial freefall, with both insurers and providers facing mounting pressure from solvency threats, skyrocketing costs, and growing gaps in care access.

Leaders from across the healthcare landscape shared stark realities: more than half of Vermont’s hospitals are operating at a loss, and Blue Cross Blue Shield of Vermont, the state’s only remaining domestic insurer, is under analysis by the Department of Financial Regulation (DFR). One number captured the urgency: $200 million. That is the amount BCBSVT says it needs by July to avoid double-digit premium increases and to cap 2025 rate hikes at 5%. Without it, businesses and their employees could face yet another year of devastating cost escalation.

In a critical moment of testimony, GMCB member Jessica Holmes articulated the unsustainable load employers have carried: Vermont’s declining commercial population is shouldering a disproportionate burden because the system “has essentially been financed by the high prices paid by the commercially insured population and their employers. They cannot afford to do so any longer.” Her comments underscored the central tension in the crisis—businesses are being priced out of a system that relies on their continued contributions to stay afloat.

Senate Reviews an Emergency Powers Bill, Passed by the House

The Senate Health and Welfare Committee is reviewing H.482, a House-passed bill that gives the Green Mountain Care Board temporary emergency powers to stabilize Vermont’s healthcare system.

One provision would allow the Board, with input from the Department of Financial Regulation, to reduce insurer payments to hospitals if a domestic insurer faces an “acute and immediate” solvency threat. Reductions would apply only to hospitals with over 135 days cash on hand and a recent operating surplus. Testimony questioned the fairness and accuracy of this metric, with some calling for a higher threshold and exemptions for Critical Access Hospitals.

A second provision would let the Board appoint an independent observer if a hospital misrepresents financial data or breaks its budget. Hospital leaders warned this could hurt bondholder confidence. Lawmakers are considering clearer definitions and safeguards to avoid unintended financial harm.

Who’s in Charge?

Even as the crisis intensifies, fundamental questions persist: Who is responsible for making the decisions that will prevent system collapse this summer? Oversight is fragmented among the Legislature, the Governor’s administration including the Agency of Human Services and DFR, and the GMCB, leaving no single entity clearly empowered to intervene in ensuring the balance between insurance solvency and support for hospital systems that are critical to communities, at the speed the moment requires.

The lack of a designated crisis authority has fueled concern among lawmakers and advocates alike. Vermonters and Vermont employers deserve clarity on who holds the reins. Without decisive leadership and accountability, the system’s stability and the financial wellbeing of the state’s business community remain at risk.

Impact on Vermont Employers

Without intervention, Vermont employers could face premium increases of 20% or more for a fourth consecutive year. That would force businesses to reduce benefits, shift more costs onto employees, or forgo coverage altogether. At the same time, staffing shortages, care delays, and hospital instability could hinder employee health and hiring efforts statewide. The Vermont Chamber remains deeply concerned  about the economic ripple effects. The business community cannot continue to subsidize a collapsing system without support or reform.

Legislative hearings in both the House Health Care Committee and Senate Health and Welfare Committee have brought sharp focus to the growing instability of Vermont’s healthcare system. Testimony from providers and advocates painted a clear picture: the system is “speeding toward a cliff,” and without swift intervention, employers and their employees will bear the brunt of the fallout.

A potential 20% insurance premium increase, following three years of double-digit increases, is just one piece of a worsening financial puzzle. Businesses across the state would face higher costs with few alternatives for affordable coverage. However, the implications extend well beyond higher premiums: Vermont faces a $300 million loss in Medicaid funding, as well as the potential loss of one or both of its commercial insurance carriers. The exit of either—let alone both—would be catastrophic. Businesses would be left with drastically limited options, and the broader employer-based insurance market could collapse under the weight of increased risk and cost.

Meanwhile, regional hospitals are also at risk. The possible closure or downsizing of local facilities would force employees to travel farther for care, create delays in treatment, and reduce the quality and availability of health services—key concerns for employers striving to maintain a healthy workforce and recruit new employees. While the Senate-passed healthcare reform bill contains elements of long-term structural reforms, testimony made clear that it fails to address the immediate challenges now threatening the system’s solvency.

Legislators also highlighted those who hold responsibility for charting a path forward. Rep. Lori Houghton stressed the importance of clarifying roles, noting that not everyone involved has the authority to enact changes, and that Vermonters deserve to know who to hold accountable. Decision makers including the Governor, his administration, those in the Legislature, as well as the hospitals, insurers, and the Green Mountain Care Board, are all responsible for making challenging decisions to quickly stabilize the system.

The Vermont Chamber remains deeply concerned about the ripple effects this crisis could have on the state’s economy. Without short-term interventions to stabilize costs and coverage, employers may face untenable benefit expenses, workforce health challenges, and increasing difficulty recruiting and retaining employees. As these critical policy discussions continue, the Chamber urges all decision makers to prioritize immediate action to prevent collapse.