Vermont education health trust cites hospital and drug prices as main drivers of double‑digit premium increases

Mark Hage, director of benefit programs at the Vermont National Education Association and a trust administrator for the Vermont Education Health Initiative (VHII), told attendees during a Feb. 7 hearing that hospital and pharmaceutical price inflation — together with higher utilization since the COVID‑19 pandemic — are the main drivers of the trust’s recent double‑digit premium increases.

VHII administrators presented fresh membership and spending estimates and said the self‑insured pool expects to pay roughly $6.4 million a week in medical claims in FY 2025 and to collect about $350 million in premiums that year. "Most of our costs are hospital based," Hage said. "55% of our claims are attributable to hospital services — inpatient and outpatient. Twenty percent of our claims roughly are attributable to pharmaceutical costs." Bobbie Jo Salz, trust administrator for the Vermont School Board Insurance Trust, added that the pool "is not alone in facing rising healthcare and commercial insurance costs. This is a regional and national problem and it's severe."

Why it matters: VHII provides health benefits to public school employees across Vermont and to some private schools that opt in. Large, sustained premium increases affect school district budgets, local bargaining and employee take‑home pay: the statewide bargaining framework sets how premium costs and out‑of‑pocket expenses are split between districts and employees. Mark Koenig, co‑chair of the statewide bargaining commission, said the employer and employee commissioners extended the existing agreement to buy time for system‑level reforms.

What VHII administrators reported

- Membership and scope: VHII covers roughly 34,500 active school employees and dependents (the presentation used the term "members" for individual lives) and offers retiree supplements through plans for the Vermont State Teachers Retirement System (VISTERS), which administrators…