Senate Health & Welfare reviews S.1 to phase in Medicaid-equivalent coverage for all Vermont residents

Jennifer Carbary, legislative counsel to the Senate Health & Welfare Committee, presented S.1 on Jan. 31, describing it as “an act relating to providing Medicaid equivalent coverage to all Vermont residents.” The bill would add a new subchapter to the statutes governing Vermont’s unified health system to phase in hospital, medical, dental and prescription drug coverage equivalent to the Vermont Medicaid state plan.

Under the bill’s timeline, coverage would begin Jan. 1, 2029, for people up to age 26 and expand in successive cohorts: ages 55–64 beginning in 2030; ages 45–54 beginning in 2031; ages 35–44 beginning in 2032; and ages 26–34 beginning in 2033, at which point all Vermont residents would be eligible. Section 2 directs the secretary of human services to request approval from the Centers for Medicare & Medicaid Services (CMS) to amend Vermont’s Global Commitment Section 1115 demonstration waiver so federal Medicaid funds could be available; if CMS does not approve federal participation, the bill would require the state to fund coverage with state-only dollars.

Section 3 would require the Agency of Human Services, in consultation with the Green Mountain Care Board and the Department of Financial Regulation, to estimate the cost of providing that coverage, including required state funds through full implementation, and to estimate potential cost offsets in health care and the broader economy. That report would be due Jan. 15, 2026, to the Health & Welfare Committee and the Senate Committee on Finance. Section 4 directs the Department of Taxes to present, by Jan. 15, 2027, at least three payroll-tax options to raise the state share — with and without federal participation — and to recommend the most administratively feasible option for employers, employees and the state.

Committee members voiced caution about the fiscal implications. Several senators noted earlier studies that found very large state funding needs for a single-state program and said the numbers would make a single-payer plan difficult to carry without broad revenue sources or federal participation. Members discussed whether a regional multistate approach might spread costs, and whether updated cost modeling — including a refreshed analysis from Joint Fiscal or outside contractors — would be useful before advancing legislation.

No formal committee vote or final action on S.1 was taken during the session. Committee members asked staff to be patient as the work would require substantial analysis and resources; they discussed contracting out for fiscal modeling and coordinating with Joint Fiscal and relevant agencies on the required reports and timelines. The bill’s effective dates state that the coverage provisions begin Jan. 1, 2029 for the under-26 cohort and that other sections take effect on passage.

Next steps identified in the discussion include completion of the cost and implementation report due Jan. 15, 2026, and the Department of Taxes’ payroll-tax options report due Jan. 15, 2027. The committee did not adopt or reject the bill at the Jan. 31 meeting.