Care Board bill would let state cut hospital rates and appoint observers to protect insurer solvency

Green Mountain Care Board Chair Owen Foster told a legislative committee on March 14 that a committee bill would let the board order reductions in reimbursement rates to specific Vermont hospitals and appoint an independent hospital observer if a domestic insurer faces an acute, immediate threat to solvency.

The bill’s backers say the authority is an emergency tool to protect the state’s two-carrier individual market and avoid a collapse that could leave tens of thousands of Vermonters without individual plans. Opponents — including hospital representatives — told the committee the proposal needs clearer triggers, stronger guardrails and greater detail on timing, how money would flow and how a hospital would be protected from unintended harm.

Foster, the Care Board chair, said Vermont’s health system is “at a true inflection point” and described the immediate risk as twofold: if a domestic insurer cannot pay claims or cannot remain in the qualified health plan (QHP) market, the remaining insurer could leave because it could not absorb the losses. Foster said that outcome could leave “70,000-plus Vermonters” without individual plans and would remove an option for small employers, federally qualified health centers and independent practices.

Foster outlined the bill’s proposed triggers and limits: a hospital would only be eligible for a rate reduction if it met both of the committee’s two named financial criteria (the committee discussed making the two criteria conjunctive): more than 125 days cash on hand and a positive operating margin in the prior fiscal year. Foster and…