Vermont
Financial struggles have pushed Vermont’s largest health insurer to the brink – VTDigger
Over the past several months, Vermont lawmakers and state officials have been preoccupied with the fate of the state’s largest health insurance company.
Blue Cross Blue Shield of Vermont, the Vermont-based member of the nationwide health insurance organization, is also the only health insurance company based in Vermont. The nonprofit covers roughly a third of the state’s population across all its plans.
Now, with its reserves drained by a multi-year surge in insurance claims, the nonprofit is facing a financial crisis with little recent precedent. As Blue Cross Blue Shield prepares to ask state regulators to increase premiums in 2026, the financial health of the company has alarmed policymakers and prompted a scramble to shore up the company.
“If Blue Cross cannot pay the claims, the system fails,” Owen Foster, the chair of the Green Mountain Care Board, a key health care regulator, told lawmakers last month.
Federally qualified health centers, independent clinics, mental health agencies, possibly even hospitals — “if they don’t get paid, they close their doors,” Foster said.
The financial headwinds facing Blue Cross Blue Shield are familiar to many in Vermont’s health system. In the wake of the Covid-19 pandemic, hospitals and other providers have seen a surge of patients, many presenting with more complex conditions. What’s more, the price of care — particularly drugs, and more particularly specialty drugs, like popular weight-loss medications known as GLP-1s — has increased precipitously in the past few years.
That’s led to unexpected increases in health care expenditures across the state. In both 2023 and 2024, for example, the University of Vermont Medical Center exceeded its budgets by tens of millions of dollars — overages that, hospital administrators said, were caused by a massive surge in patients needing more care.
That surge has, in turn, drained Blue Cross Blue Shield’s cash reserves. From 2021 through the end of 2024, Blue Cross Blue Shield has lost nearly $152 million, according to data the insurer presented to legislators earlier this month. Last year alone, Blue Cross lost $62.1 million.
In 2019, the insurer had $133.5 million in the bank. At the end of 2024, Blue Cross Blue Shield had just $58 million — and pays out an average of $35 million a week in claims.
Last year, credit rating agency A.M. Best downgraded Blue Cross Blue Shield’s rating twice, bringing its score from B++ to C++. That’s moved the insurer’s rating from “good” to “marginal” in a matter of less than six months.
“I’ve lived and worked in Vermont for 45 years,” Don George, the CEO of Blue Cross Blue Shield, told lawmakers in the Senate Committee on Health and Welfare last month. “And I’ve just never seen anything remotely close to what we’re going through now.”
‘We’re fortunate’
A significant chunk of those losses have come from Blue Cross Blue Shield’s Medicare Advantage plans, Vermont Blue Advantage. From 2019 through 2023, Blue Cross Blue Shield lost $43.4 million on those plans, according to financial records. Roughly 35,000 Vermonters are on Blue Cross Blue Shield Medicare Advantage plans, Sara Teachout, a spokesperson for the insurer, said.
Some of those early losses were startup costs ahead of the plans’ rollout in 2021, Teachout said. Once they hit the market, the plans continued to lose money — $11.5 million in 2022 and $22.5 million in 2023 — along with the rest of the insurer’s portfolio, records show.
Those deficits are due to the same factors affecting the rest of Blue Cross Blue Shield’s generally, Teachout said: a rise in residents needing care and increasing costs for that care.
Those losses “are proportionate to the losses in our other lines of businesses that are due to the cost surge,” she said.
To shield itself from those losses, Blue Cross Blue Shield of Vermont has almost entirely unloaded its Medicare Advantage business onto Blue Cross Blue Shield of Michigan, an affiliate nonprofit insurer. It’s also taken out a $30 million loan from Blue Cross Blue Shield of Michigan.
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Blue Cross Blue Shield of Vermont headquarters in Berlin. VTDigger file photo
Because of its shaky financial footing, Blue Cross Blue Shield of Vermont is paying 8% interest on that Michigan loan. George, the CEO, said in an interview that the insurer was lucky to have even gotten a loan in the first place.
“The reality is, we would likely — under those circumstances and that risk — not be able to find anyone that would loan Blue Cross Blue Shield of Vermont (money),” he said. “So we’re fortunate to have Michigan, and that’s how we come up with that interest rate.”
To shore up its finances, the insurer has also held off hiring roughly for 30 positions and has embarked on a “comprehensive capital recovery plan” with the Department of Financial Regulation, according to George.
‘The number one cost driver’
As part of an annual regulatory process, Blue Cross Blue Shield is preparing to request increases to its insurance premiums later this month — increases that are expected to be large. Last year, the insurer raised premiums for individual and small group plans on the state’s health insurance marketplace by roughly 20%.
For 2026, “Given the pace of medical and pharmacy costs and the utilization that we saw right through to the end of 2024, I would expect increases not unlike what we’ve recently seen in the past,” Ruth Greene, the insurer’s chief financial officer, said in March.
Those increases impact not only individual Vermonters’ insurance costs — already some of the highest in the nation — but also their taxes. Most municipalities buy small group insurance plans on the state health insurance market, according to Ted Brady, the executive director of the Vermont League of Cities and Towns.
Prior to last year’s premium increases, roughly 80% of municipal employees were insured with Blue Cross Blue Shield, Brady said, although he now expects that many municipalities have switched to MVP, the other insurer that sells on the marketplace.
“Health insurance is the number one cost driver for municipalities right now,” he said.
School and state employees are also insured on Blue Cross plans, but are on a different type of plan known as self-funded plans. Although those organizations have also seen significant premium increases as health care costs rise, members contribute proportionally less to Blue Cross’ reserves — meaning they are more insulated from the insurer’s financial struggles, administrators at those organizations say.
Still, increasing insurance premiums are “a tremendous economic strain on every part of Vermont,” Vermont’s Chief Health Care Advocate Mike Fisher told lawmakers last month.
‘Acute and immediate threat’
Meanwhile, policymakers and legislators are taking steps on their own. In March, the Green Mountain Care Board, a key health care regulator, announced a deal with the University of Vermont Health Network that will deliver $12 million in hospital funds to Blue Cross Blue Shield of Vermont.
Lawmakers are also hashing out the details of a bill that would allow for emergency action to help health insurers in financial crisis. That bill, H. 482, would allow the Green Mountain Care Board to reduce the reimbursement rates paid to a Vermont hospital if the insurer in question faces “an acute and immediate threat to its solvency.”
Such a rate reduction would only be allowed if the hospital is part of a financially stable network, according to the bill language.
The proposed legislation passed out of the House in March. A key legislative committee, the Senate Health and Welfare Committee, is scheduled to vote on advancing it Friday.
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Sen. Ginny Lyons, D-Chittenden Southeast, presides as chair of the Senate Health and Welfare Committee at the Statehouse in Montpelier on Wednesday, April 16, 2025. Photo by Glenn Russell/VTDigger
Meanwhile, in the other chamber, the House’s health committee is looking to address the problem of rising costs closer to their source — at hospitals and other providers.
A sprawling bill, S.126, would implement a new payment model known as reference-based pricing, in which hospital charges are pegged to Medicare reimbursement rates, to go into effect no later than 2027. The bill would also direct the Agency of Human Services to work with providers to reduce health care spending by 5% “for hospital fiscal year 2026,” which begins October 1.
That bill passed the Senate in March, and lawmakers in the House Health Care Committee are working on amendments this week.
“There’s a lot of work that has to be done,” Sen. Ginny Lyons, D-Chittenden Southeast, the chair of the Senate Committee on Health and Welfare, said of her committee’s legislation last month. “We can’t let Blue Cross and Blue Shield go under.”
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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