New regulator sees rough time for Vt. health care system

VERMONT — The newly appointed leader of the Green Mountain Care Board, the the state's health care regulator, is keenly aware of the challenges she faces in keeping health care affordable and accessible to Vermonters.

The pressure high health insurances costs are placing on Vermont families and small businesses is the most urgent challenge facing the state's health care system, Emily Brown told the Independent.

"The cost of Vermont's commercial health insurance is some of the highest in the country, and this is a direct result of our high health care costs," she said. "The burden of these costs has also led our one domestic health insurer, Blue Cross Blue Shield of Vermont (BCBSVT), to historically low reserves, endangering their ability to pay providers and provide health care access to the most vulnerable Vermonters."

In late June, the Green Mountain Care Board (GMCB), the government body that oversees the state's health care system, appointed Brown as its new executive director effective Aug. 18.

Brown's appointment comes at a time when Vermont's health care system is in crisis. Health care costs in Vermont have skyrocketed in recent years. The rising costs of pharmaceuticals and treatments, combined with the demographic challenge posed by Vermont's aging population, have strained the state's predominantly rural hospital system.

Additionally, sweeping cuts to Medicaid and other health care programs signed into law by President Trump on July 4 will endanger health care access for millions across the country and further stress Vermont's health care system.

The Addison Independent recently spoke to Brown to gather her perspectives on the health care crisis currently facing Vermont.

Brown is an attorney with years of experience in health policy and regulation on both a state and federal level. She most recently served as Vermont's Deputy Commissioner of Insurance at the Department of Financial Regulation (DFR).

At the DFR, that many of her initiatives were focused on compliance, that is, holding insurance companies accountable and ensuring they are operating within state laws while properly delivering benefits to policyholders.

"Access to health insurance can increase access to health care and is at the forefront of much of the work the Insurance Division tackles. Whether it is adding important benefits such as hearing aids or ensuring access to contraceptive care, I hope to continue to work with internal and external parties to figure out how we can deliver that care at an affordable price," Brown said.

The uncertain fate of BCBSVT has been at the forefront of health care deliberations in Vermont for months. Blue Cross insures around 230,000 Vermonters, or one-third of the state's population. However, a multi-year surge in insurance claims has threatened the insurer's ability to fund claims and even remain solvent.

BCBSVT has seen double-digit rate increases over the past three years as the company attempts to shore up urgently needed funds to pay out claims, and in turn help fund Vermont's hospitals. BCSBVT pays out an average of $35 million a week in insurance claims. At the end of 2024, BCSBVT had $58 million in the bank and had a record annual deficit of $62.1 million.

Federal funding has allowed the state to make health insurance more accessible for Vermonters despite recent rate hikes; providing eligible individuals and families with financial assistance in paying for health insurance. Vermont Health Connect is the state government's health insurance marketplace, which allows individuals to enroll in Medicaid or Qualified Health Plans, which are state-subsidized insurance plans provided by private companies like BCBSVT.

According to Brown, the GMCB regulates 70,000 Qualified Health Plans, ensuring that insurance companies are using health insurance premiums responsibly and providing the benefits they are required to.

UNDERLYING COSTS

However, Brown said, while state regulation of private health insurance is a factor in making insurance more affordable, nothing on its own can create health care affordability.

"Commercial health insurance is just a piece of the whole health care system and cannot alone address issues of affordability and access," she said.

"Without controlling the underlying costs of the health care system, you will not be able to create affordable premiums. Controlling the underlying costs means having an efficient health care system, affordable pharmaceutical products, accessible and high-quality independent practices and availability at primary care practices. Regulation is necessary given we have little competition, but it is not sufficient alone to create the system Vermonters deserve."

Brown told the Independent that the challenges facing BCBSVT have put additional pressure on Vermont's already beleaguered rural hospitals, primary care offices, mental health providers and long-term care facilities.

As reported by Vermont Public in March, GMCB data shows that five of Vermont's 14 hospitals reported multi-million-dollar losses last year, and that six had less than 100 days' cash on hand (Middlebury's Porter Hospital was not one of them). Without government subsidies or insurance revenues from Medicaid and companies like BCBSVT, some health services and hospitals could face closure.

"Many hospitals and providers rely on BCBSVT's ability to pay claims. If BCBSVT were to be unable to make those payments this could create a financial issue for our rural health care providers and the patients they serve. Rural providers rely on those payments, and many of them operate on very small margins where a few weeks or even days of missed payments could be detrimental to the stability of our rural health care providers," Brown said.

"From my experience at DFR there is not another health insurer willing to step in and enter our commercial health insurance market if BCBSVT were unable to operate in our market," she added.

CHANGES IN LAW MAY HELP

Vermont lawmakers have recently taken steps to address some of the underlying issues contributing to state's rising health care costs. On June 12 and 13 Gov. Phil Scott signed into law two bills that would control health care spending while strengthening the state's supervision of hospital practices.

Starting next year, bill H.266 limits the amount that eight University of Vermont network hospitals can charge for outpatient drugs, including those used to treat cancer and autoimmune disease.

On average, the prices of outpatient medications in Vermont are more than five times the manufacturer's average sales price — the highest markup in the nation. Beginning in January 2026, the cost of these drugs will be limited to 120% of their manufacturers' average sale price, making it easier for insurance companies like BCBSVT to pay medical claims.

"Prescription drugs are one of the primary drivers of increased health care costs in Vermont. H.266 is a step towards trying to control and create a more fair, affordable, and predictable prescription drug cost structure for patients and insurers," Brown said. "H.266 will significantly drive down premiums this year and is one of the most impactful steps ever taken to control Vermont health care costs."

Gov. Scott also signed into law S.126, which implements longer-term reforms to the state's health care system, including the introduction of reference-based pricing, which tethers what hospitals can charge to Medicaid reimbursement rates.

"Reference-based pricing aims to control costs and create a more stable and predictable cost growth in the future for insurers and patients. These cost savings can then be passed on to consumers through lower insurance premiums and out of pocket costs," Brown said. "The bill also asked the GMCB to establish global hospital budgets that, when implemented, can provide a stable and predictable revenue source for hospitals and ensure accountability for how patient dollars are being spent.

"S.126 creates a significant and clear directive on what reforms need to take place over the next several years," she added.

But recent legislation passed in Washington, D.C,. threatens to upend what progress has been made in addressing Vermont's health care crisis. President Trump's "Big Beautiful Bill" makes major cuts to federal funding for Medicaid and other health programs that benefit states.

The Congressional Budget Office estimated that the Medicaid cuts alone would lead to 12 million people nationwide losing their health insurance coverage and the loss of $200 million in funding for Vermont's health care system.

One aspect of the new federal law limits the amount state governments can tax health care providers, like hospitals, to access more federal health care and Medicaid funding. Vermont relies on this federal funding to provide benefits for Medicaid recipients and keep insurance costs down through funding Qualified Health Plans through Vermont Health Connect.

"The Trump administration's bill passed last week will have a devastating impact on our health care system and the patients who rely on it. Many of our rural health care providers already operate on razor thin margins and this bill will only inflate the financial health care crisis in Vermont," Brown said.

State officials have estimated that 45,000 people could lose their Medicaid coverage in the coming years, with the Trump administration instituting new work requirements and doubling the amount of paperwork individuals must submit to prove they are eligible for Medicaid.

"The bill creates unnecessary burdens for people who want to enroll in (Affordable Care Act) plans by cutting the open enrollment period and requiring unnecessary documentation. This in the end will prevent people from having the health insurance they need to access health care," Brown said.

Rural Vermont hospitals will ultimately pay the price, as less state and federal funding combined with fewer people on insurance will make it even more difficult to generate revenue and keep health services open.

Still, Brown is optimistic about what she can do to strengthen Vermont's health care system and told the Independent that affordable and accessible health care in Vermont is possible.

"We have strong leaders at providers and insurers who are invested in accomplishing the transformation that is necessary to bring about an affordable, accessible, and high-quality health care system in Vermont," she said.

"The state continues to invest significant resources to support and accomplish this work and I look forward to doing what I can to create meaningful and needed change to Vermont's health care system."