Vermont
BlueCross BlueShield of Vermont in financial crisis
BlueCross BlueShield of Vermont − the largest health insurer in Vermont with a 66% market share − is threatened with insolvency because of its declining reserves, according to a state regulator.
Kevin Gaffney, commissioner of the Vermont Department of Financial Regulation, said Friday he’s confident BCBSVT will remain solvent, which is his department’s responsibility to ensure.
“As solvency regulator, our primary role is protecting the market,” Gaffney said. “We have to have a place for people to purchase insurance or we haven’t done a good job of protecting Vermont residents.”
Gaffney said Vermont’s largest health insurer is at a critical juncture.
“BlueCross BlueShield of Vermont is a big tanker,” he said. “We have to start to turn it. We can do that and there are steps to do it.”
While Vermont has not had a major insurance company fail, according to Gaffney, he said the example of Florida offers a cautionary tale where losses from natural disasters have caused insolvencies in property insurance companies and have triggered other insurance companies to exit the market.
“We have sufficient rigor in our solvency process to avoid these things,” Gaffney said. “DFR is taking those actions in a timely and I think in an appropriate manner.”
Gaffney is requiring BCBSVT to file a plan with DFR by early September, showing how they’re going to “bolster their reserves and improve their solvency.” The key element of that plan, articulated in a “solvency letter” Gaffney sent to Owen Foster, chair of the Green Mountain Care Board, on July 12, is an additional 4% increase by BCBSVT in contributions to its reserve fund.
The Green Mountain Care Board is an independent oversight board created by the Vermont Legislature to regulate major areas of the health care system in the state, including health insurance premiums. The Care Board would have to approve the increased contributions to BCBSVT’s reserve fund.
‘A Fragile Financial Situation’
Don George, president and chief executive officer of BCBSVT, sent an open letter via email on Monday, July 22, titled, “A Fragile Financial Situation.” In the letter, George said the insurer is in the “unprecedented position” of being forced to file an amended request to the Green Mountain Care Board for an additional 4% increase to contributions to its reserve fund, which comes from premiums paid by policy holders. The reserve fund is used to cover unexpected levels of claims, which the insurer has experienced in the past few months.
“Since May, health care claims have increased dramatically, and our member reserve levels have declined precipitously,” George said. “This is in addition to underwriting losses in five of the last six years, leaving us without the means to weather this downturn with existing member reserves. The cumulative impact of underfunded premiums − despite our consistent advocacy for rates that fully fund the cost of our members’ health care − has created this fragile financial situation.”
Sara Teachout, director of government and media relations for BCBSVT, explained that underwriting losses occur when the company is unable to cover the total amount of member claims plus administrative costs. She said administrative costs for BCBSVT are “quite low,” when compared to its peers nationally, but the insurer is still making administrative cuts by not advertising and by restricting new hiring.
“The only year we did not have a loss was 2020, the year of COVID, when people were not going to the hospital,” Teachout said.
BlueCross BlueShield VT asks for an additional $20 million for its reserve fund
The original request for contributions to the reserve fund, filed in May, asked for a 3% increase, which equates to $15 million. The amended request for a 7% increase equates to $35 million, or more than double the original request, according to Teachout.
“Blue Cross VT has advocated for adequate funding of member reserves consistently over time, while our requests were cut year over year,” George said in an email to the Burlington Free Press. “Now with member reserves dangerously depleted, we are forced to increase the rates substantially to cover the deficit.”
Owen Foster, chair of the Care Board, declined to comment for this story because the hearings for BCBSVT’s rate filings are ongoing.
Making sure BlueCross BlueShield VT remains solvent
Gaffney said the reserve fund is “critical” to maintaining BCBSVT’s solvency. He said the health of the reserve fund can be expressed as a percentage − called a risk-based capital ratio range − reached through complex calculations that reflect BCBSVT’s investment risk, but basically the percentage equates to an amount of money that accounts for “volatility.”
“The (DFR) did an order back in 2019 for Blue Cross Blue Shield of Vermont to maintain a risk-based capital ratio range between 590% and 745%,” Gaffney said. “If you can stay in that range you can withstand volatility and not be at risk (of insolvency).”
At the end of 2023, BCBSVT’s risk-based capital ratio range was 337%, far below the required range. Gaffney said in six of the last 10 years, the insurer’s contribution to its reserve “was a negative because of other adjustments to rate filings.” Rates are regulated by the Green Mountain Care Board.
“It is as dire as it sounds,” Gaffney said.
Reserve fund continues to drop this year
BCBSVT’s reserve fund balance has declined by $47 million over the past two years, not including this year’s results, according to Gaffney. The insurer had about $88 million in reserves at the end of 2023, and that number has continued to decline through 2024. Teachout was unable to provide the current balance of the reserve fund.
“We do know the 2023 number was only adequate to cover just under two months of our members’ claims, which is extremely low,” Teachout said. “We should roughly double where we are. Our balance should have been close to $180 million at the end of 2023.”
‘We have to have a place for people to purchase insurance’
The overall context for the discussion of BCBSVT’s solvency is a crisis of health care affordability for Vermonters, both in terms of hospital costs and premiums. Gaffney said he’s not unsympathetic to the affordability issue, but that he has a larger responsibility as commissioner of DFR, and BCBSVT’s solvency regulator.
Gaffney said he also understands that “often it’s felt that these increases are to just bolster profits for insurance companies.”
“That’s not the case now,” he said. “It’s going to take some time to get back into the range of 590% to 745%.”
Vermonters’ declining health is a big, and expensive, problem
George points to the declining health of Vermonters as a key factor in BCBSVT’s financial crisis, in addition to rising hospital costs. He said health care organizations nationwide are experiencing “extraordinary cost pressures,” as a result of “massive increases in the need for medical and pharmaceutical care.”
“As many of you may have experienced in your own lives, we are faced with these same pressures here in Vermont,” George said. “Furthermore, our data shows the continuing impact of the pandemic and an alarming decline in the overall health status for many of our members. These issues are colliding with a decade of state policy decisions to cut deeply into health insurer reserves and premiums in the name of affordability, creating the urgent situation that we are faced with today.”
Not only are there more claims, but there are bigger claims from more acute medical conditions, Gaffney said.
“The takeaway is the price of insurance is a reflection of costs, not a choice the company makes,” he said. “The company runs on narrow margins.”
Contact Dan D’Ambrosio at 660-1841 or ddambrosio@freepressmedia.com. Follow him on Twitter @DanDambrosioVT.
Two empty seats
The leaders of both the Vermont House and Senate will not be running for reelection. So who will fill their shoes?
Senate Majority Leader Kesha Ram Hinsdale, D-Chittenden Southeast, said she’s running for Senate president pro tempore.
Ram Hinsdale has served in the legislature for 14 years and is the first woman of color to serve in the Senate.
“I have seen so many types of leadership, so many tools in the toolbox that you can use to move people in the same direction,” she said.
While spending more than a decade in the Legislature, Ram Hinsdale said she’s lived through many crises and charted the state’s path through them. She was a lawmaker during the Great Recession, the Covid-19 pandemic and two years of record breaking floods.
With multiple long-serving legislators retiring this year, Ram Hinsdale said she thinks she will bring needed institutional knowledge and experience, along with a willingness to rally new people.
Along with Ram Hinsdale, lawmakers have eyed Sen. Andrew Perchlik, D/P-Washington, who currently chairs the Senate Appropriations Committee, as a future pro tem.
Perchlik said Friday that he’s considering running for the position, though he didn’t want to definitively say until after the primary election in August.
“I’ve been approached by many senators asking me to do it,” Perchlik said. And he said he thinks it makes sense, given his past leadership roles as the whip for the majority party in the Senate and his former role as chair of the Senate Transportation Committee.
Perchlik has chaired the appropriations committee for the last two years, receiving bills from every committee and managing the state’s funds. That role has allowed him to work with lawmakers across the chamber and different parts of the executive branch, he said.
“You get a really broad picture of the entire government,” Perchlik said.
Just a day after House Speaker Jill Krowinski, D-Burlington, surprisingly announced that she won’t seek reelection, a handful of likely Democrats to succeed her said they were mum on their plans to run for speaker.
House Majority Leader Rep. Lori Houghton, D-Essex Junction, said it’s too soon to say if she will run, though she didn’t rule out the possibility.
“She just announced yesterday,” Houghton said, adding that she’s trying to focus on finishing out the session.
Rep. Emilie Kornheiser, D-Brattleboro, who chairs the House Ways and Means Committee, similarly said she’s considering running, but right now she’s focused on finishing legislative work, too.
Rep. Charlie Kimbell, D-Woodstock, said, “I haven’t made up my mind about it.” Kimbell previously ran for speaker in 2020 before dropping out of the race to endorse Krowinski. He also ran for lieutenant governor in 2022 before losing in the primary.
Rep. Laura Sibilia, I-Dover, who challenged Krowinski for speaker at the beginning of 2025, said, “I have not ruled it out.”
In the know
At the eleventh hour, lawmakers let the law enforcement masking bill supported by immigrant rights activists, S.208, die.
“I’m very disappointed with what has happened to S.208,” said Sen. Nader Hashim, D-Windham, the bill’s lead sponsor, on the Senate floor Friday.
The decision comes after a committee of lawmakers from the House and Senate agreed on a version of the bill that would have largely banned all law enforcement operating in the state — including federal agents — from wearing masks or failing to visibly identify themselves.
Committee members decided to make that provision of the bill go into effect March 15, 2027, rather than upon passage, reasoning it would give the state time to see how similar laws in other states play out in the courts.
The bill the committee approved would have given the Vermont attorney general’s office the responsibility to enforce it, bringing a civil lawsuit if officers violated the law.
Upon passage, the bill also would have required a Vermont law enforcement board to create a statewide policy on masking and identification for local and state police.
All members of the conference committee signed on to support the newest version of the bill except the committee’s lone Republican appointee, Sen. Chris Mattos, R-Chittenden North. During a committee meeting Thursday, Mattos said he was unsure he could support the bill because the committee hadn’t heard from the attorney general’s office about whether it was on board to enforce the policy.
After the conference committee approved the bill, it sat on the House’s calendar Friday but was not taken up on the House floor.
For the bill to pass before adjournment, lawmakers would have needed three-quarters of the House to suspend legislative rules, which would allow lawmakers to speed up the legislative process. That would have required Republican support.
Lawmakers on the Senate floor decided to adjourn around 5:50 p.m., giving up on the idea of receiving the bill from the House.
“It was barely a year ago that I watched Mohsen Mahdawi be taken by masked men in unmarked vehicles,” said Sen. Becca White, D-Windsor, expressing her frustration that the bill didn’t pass.
— Charlotte Oliver
Lawmakers on the House floor Friday made a failed attempt to override the governor’s veto of a bill, H.727, that would have set strict guardrails for any future huge data centers in Vermont.
The bill contained provisions that would prevent any large data centers in Vermont from increasing electricity costs for average ratepayers. The bill also contained provisions that would restrict how data centers discharge chemicals and use water to stay cool in an attempt to limit environmental impacts.
Gov. Phil Scott vetoed the bill Thursday. In his letter to lawmakers, Scott said he believes Vermont’s existing regulations would prevent harmful impacts from data centers.
Lawmakers voted 83-52 in favor of overriding the veto, but they needed 90 votes to do so.
— Charlotte Oliver
On the move
Vermont’s House and Senate budget writers reached a deal Thursday night on a state spending package for the upcoming fiscal year, which starts in July.
Agreement on the budget bill, H.951, came with likely just a day left in this year’s legislative session. Overall, the joint House and Senate conference committee’s version of the budget totals $9.38 billion, close to the amount of spending Gov. Phil Scott proposed at the start of the session in January.
The bill was expected to get a final sign-off on the House floor Friday after weeks of both public and closed-door negotiations. The conference committee signed off on the bill around 11 p.m. Thursday.
Among the last pieces of the nearly 150-page legislation to get resolved in the committee was a controversial plan to take money out of a state-run college scholarship fund to help pay for a long-stalled athletic complex at the University of Vermont instead. The fund, called the Higher Education Endowment Trust Fund, saw a historic infusion of cash last year from Vermont’s tax on the estates of high-wealth individuals.
Read the full story here.
— Shaun Robinson
Say cheese
“A crime has been committed, and we do need justice by the end of the day.”
Rep. Conor Casey, D-Montpelier, told his colleagues on the floor Friday morning that he was set on getting to the bottom of a putrid predicament that has been vexing him and other members of the House Corrections and Institutions Committee for weeks.
As he told it: Casey walked into the committee room a couple of months ago to “a rancid smell.” After weeks of searching high and low, he realized that the desks making up the committee’s table had small drawers underneath that he had never noticed before. He opened his drawer, only to find “a moldy, disgusting, offensive glob of cheese,” with a note that read, “say cheese.”
Casey is well known around the Statehouse for pulling pranks on his colleagues, so the cheese may have been an effort to get back at him before he steps down from the House. He then pulled open the drawer of his seat-neighbor, Barre Town Republican Rep. Gina Galfetti, to find yet another glob of cheese.
“It was a bipartisan cheesing, Madam Speaker,” he exclaimed Friday.
If the person who lodged the offending dairy did not come forward by the end of the day, Casey said, he would subject his colleagues to a full recitation of James Joyce’s mammoth novel, “Ulysses,” on the floor. Coming from the man who recited part of a play he wrote during a floor session last year, that seemed far from an empty threat.
As of this newsletter’s deadline, at least, the mystery remained unsolved.
“The craven still hides in the shadows,” Casey wrote in a text. “But rest assured they will be brought to justice. The session may end, but my lust for vengeance will endure…”
— Shaun Robinson
Nearly 1,000 Vermont students will bring live jazz to downtown Burlington this June as part of the 2026 Discover Jazz Festival, with dozens of school ensembles scheduled to perform free concerts on Church Street.
According to a community announcement, 44 ensembles from 36 schools, representing 993 students from across Vermont, will take part in the festival’s 43rd year.
The student concerts are organized by The Flynn, which produces the Burlington Discover Jazz Festival and oversees its education and community programs. All student performances are free and open to the public.
Student performances highlight statewide participation
Participating schools span Vermont, including Chittenden, Franklin and Grand Isle counties, central Vermont, Addison County, Lamoille Valley, the Northeast Kingdom and southern Vermont, along with visiting ensembles from New York, according to the announcement.
Chittenden County schools listed include Burlington High School, Champlain Valley Union High School, Charlotte Central School, Colchester High School and Middle School, Edmunds Elementary and Middle schools, Essex High School and Middle School, South Burlington High School, Winooski Middle High School and Vermont Commons School, among others.
The student performances will take place during the Burlington Discover Jazz Festival, which runs June 3–7 and features free outdoor concerts alongside ticketed performances by internationally recognized artists curated by MacArthur fellow Jason Moran.
Featured collaboration includes Vermont Youth Orchestra musicians
A featured performance during the festival, “My Heart Sings: Jason Moran Plays Duke Ellington”, will include musicians from the Vermont Youth Orchestra Association jazz ensemble, according to the announcement.
The concert will also feature guest vocalist Rachel Ambaye, a South Burlington native studying with Moran at Berklee College of Music. Ambaye will join the student ensemble for a collaboration tied to one of the festival’s signature performances.
Flynn Executive Director Jay Wahl said in the announcement that bringing student musicians into the center of the festival highlights jazz as a living tradition shared across generations.
This story was created by Dave DeMille, ddemille@gannett.com, with the assistance of Artificial Intelligence (AI). Journalists were involved in every step of the information gathering, review, editing and publishing process. Learn more at cm.usatoday.com/ethical-conduct.
MONTPELIER, Vt. (WCAX) – Republican Gov. Phil Scott filed Thursday to seek a sixth term in office while the heads of both legislative chambers announced they will not run for reelection.
Thursday marked the deadline for candidates to get on the ballot for the August primary elections. For months, it has been unclear if Scott would run again.
“I don’t want to see anything move backwards; we need to keep pushing ahead,” Scott said.
Scott filed the necessary 500 signatures on Thursday. If he serves a sixth term, he would be the longest-serving consecutive governor in state history.
“It’s not easy work, it weighs on you, but at the end of the day, I feel the responsibility to stick this out,” Scott said.
The governor has won by larger margins each cycle. Potential Democratic challengers have waited to see whether Scott might step aside, providing a chance not to run against a popular incumbent.
Those who political observers speculated might be interested in the governor’s race included Democratic Attorney General Charity Clark and Treasurer Mike Pieciak. Both instead decided to seek reelection.
Pieciak told reporters he has experienced several personal tragedies this year and wants to continue with his office’s work. “It’s really been a year of reflection, and I think I’m excited about continuing this job that I enjoy,” Pieciak said.
Scott will face an opponent in November. Democrats Aly Richards and Amanda Janoo will face off in the August primary.
Three other Democrats, Molly Gray, Ryan McLaren, and Esther Charlestin, will face off for the Democratic nomination for lieutenant governor and the chance to challenge incumbent Republican John Rodgers in November.
House Speaker Jill Krowinski received a standing ovation from House lawmakers as she announced she will not seek reelection, joining Senate President Phil Baruth.
“The next group of leaders will do a great job continuing on with this work. I wouldn’t be leaving if I didn’t think that we had the right people in places to do this work,” Krowinski said.
That means there will be fresh leadership in the House and Senate next legislative session.
And there is competition in the race for Congress. Republicans Gerald Malloy and Mark Coester will face off in the GOP primary to determine who will face Congresswoman Becca Balint in November.
“To deliver results for Vermont. They are tired of the constant complaining and angry rhetoric,” Malloy said.
There are at least three dozen state House and Senate races that will see fresh faces as another large contingent of lawmakers steps back.
Copyright 2026 WCAX. All rights reserved.
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