School health plan cites specialty drugs and hospital prices as main drivers of sharp cost growth

Representatives of the Vermont Education Health Initiative (VEHI) told the Senate Finance Committee on Feb. 6 that rising specialty drug prices and hospital costs are the principal drivers of sharp increases in the school health insurance pool’s spending and premiums.

VEHI officials said the pool covers roughly 33,000 active school employees and dependents and a small retiree population, and warned that a concentrated set of high‑cost patients and growing use of high‑priced specialty medications are pushing costs upward. “Vermonters are spending up almost 20% of their income on health care, compared with the national average up just under 8%,” VEHI presenter Bobby Jo Salz said during the presentation.

Why it matters: VEHI insures most public school employees in Vermont and its premium increases feed into school budgeting and bargaining cycles that affect local property taxes and district finances. Lawmakers pressed VEHI on what the pool can do within the limits of statewide bargaining and state regulation to reduce cost pressure.

Most important facts

- VEHI’s FY26 rates rose just under 12%; FY27 rates were approved with an average increase of about 7.3% after accounting for recent policy changes and timing of actuarial filings. VEHI…