Vermont Takes Bold Steps to Curb Health Care Costs
BURLINGTON, Vt. – Governor Phil Scott has signed two landmark health care bills aimed at reducing costs and increasing oversight of hospital practices. The enactment of H.266 and S.126 comes at a crucial time for Vermont’s health care sector, grappling with soaring insurance premiums and financial strain.
The first bill, H.266, caps prices for outpatient prescription drugs, particularly those administered through injection or IV—often used for cancer and autoimmune treatments—at 120% of their manufacturer’s average sale price. This measure, effective January 2026, is poised to lower health care expenditures and insurance premiums significantly, marking a potential first for the nation.
Owen Foster, chair of the Green Mountain Care Board, hailed the bill as "the most consequential and immediate effort" to tackle spiraling costs. Blue Cross Blue Shield of Vermont estimates the law could reduce premium increases by up to four percentage points for some health plans.
Conversely, concerns loom over the revenue implications for hospitals. Devon Green, a lobbyist for the Vermont Association of Hospitals and Health Care Systems, warned that the cap may necessitate serious budget cuts, including staff reductions.
The second bill, S.126, aims for systemic reform by introducing a reference-based pricing system tied to Medicare rates, with an implementation deadline of 2027. This shift may save the state millions, although the details surrounding the pricing methodology remain unclear and complex.
In addition, S.126 envisions transitioning Vermont’s health care system toward a global budget payment model by 2030, promoting a fixed payment system rather than fee-for-service. Regulatory oversight will also be enhanced, allowing for better financial data collection.
Together, these initiatives represent a determined effort by lawmakers to stabilize Vermont’s health care landscape amid escalating costs and service challenges.
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