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Senate Finance hears overview of rising health costs, hospital strain and options as All‑Payer era ends
Summary
Officials from the Green Mountain Care Board and the Agency of Human Services told the Senate Finance Committee that Vermont faces rising premiums, hospital financial losses and access problems, and outlined recent reforms, Act 167 work on hospital transformation and the state’s acceptance into a federal AHEAD demonstration.
MONTPELIER — Officials briefed the Senate Finance Committee on Vermont’s health‑care system on Jan. 9, saying rising insurance costs, growing claims and hospital financial strain now require targeted changes as the state prepares for the end of its All‑Payer model.
Robin Lund, a member of the Green Mountain Care Board, opened with an economic framing, saying: “Health care in the United States is considered a market, but it's different from other economic markets in this country.” She and Brandon Krause, director of health care reform at the Vermont Agency of Human Services, reviewed decades of state reforms and the options under current law and federal programs.
Why it matters: Committee members heard that Vermont has achieved low uninsured rates but still faces affordability and access challenges. Presenters cited nearly universal coverage for children and a drop in the overall uninsured rate to roughly 3 percent in Vermont, while national uninsured rates remain close to 10 percent. At the same time, premiums and out‑of‑pocket costs have grown and many hospitals are operating at a loss, the presenters said.
Lund summarized the state’s reform history, including the 2005 Global Commitment Medicaid waiver, the Blueprint for Health (2008), Catamount Health (2007) and the creation of the Green Mountain Care Board in 2011. She said the Blueprint’s community health teams were a notable success: evaluated alongside other medical‑home programs, she said, the state’s model “saved more dollars compared to these other medical home programs.”
Krause told the committee the current system “is facing significant challenges in affordability, sustainability, access, and equity.” He presented state data showing rising claim intensity for private insurers since 2020, longer wait times for primary and specialty care and that more than half of Vermont hospitals were running negative margins in recent reports.
Committee members asked how Vermont compares with other countries and states, why U.S. spending is higher and which levers the state can pull. Presenters discussed several commonly cited drivers — price, technological growth, specialization, administrative overhead and demographics — but emphasized there is no single, definitive cause that explains all differences.
The presentation outlined recent policy work required by Act 167 (2024), which directs state officials and the Green Mountain Care Board to analyze alternative payment models, design potential hospital global budgets and provide technical assistance for hospital transformation. Lund and Krause said a contractor has begun stakeholder outreach and work on hospital‑by‑hospital transformation planning; the state will also deploy technical assistance in regions such as the Northeast Kingdom.
On federal engagement, presenters said the All‑Payer model that aligned Medicare, Medicaid and commercial payment goals will wind down at the end of 2025. Vermont applied for and was accepted into a federal AHEAD demonstration (States Advancing Health Equity Demonstrations) and, according to Lund, "the board voted on Friday ... to tie on with the governor and AHS to be [in] the AHEAD model." They cautioned that the AHEAD opportunity will not by itself solve all problems and that broader, hospital‑specific strategies will be necessary.
Committee members pressed for more quantification of proposed changes and for clarity on which reforms require federal approvals or changes in state statute. Presenters repeatedly urged a multifaceted approach rather than expecting any single reform to solve affordability, quality and access at once.
The hearing closed with committee members and presenters agreeing on the need for continued stakeholder engagement, data work and technical assistance as the state moves from one multi‑payer arrangement toward a mix of targeted hospital transformation efforts, federal demonstrations and other payment changes.
The Green Mountain Care Board and Agency of Human Services provided the briefing materials and the committee scheduled follow‑up discussions as Act 167 implementation proceeds.
