Governor Scott Vetoes Bill to Cut Insurance Premiums in Vermont

Governor Phil Scott has vetoed S.190, a legislative attempt to cut insurance premiums for public school workers and individuals using Vermont's Affordable Care Act marketplace. This bill proposed the adoption of reference-based pricing to reduce costs in these sectors.

In his veto announcement, Governor Scott outlined plans to leverage executive actions for advancing components of an alternative insurance reform initiative from his administration. He stressed the need for equitable insurance market reforms that benefit all stakeholders.

"Vermont's affordability challenge cannot be resolved by selectively providing savings to certain payers while excluding others," stated Governor Scott. "Achieving lasting affordability requires comprehensive structural changes that expand options and broadly distribute savings."

Rep. Alyssa Black, who sponsored the bill, expressed her disappointment with the veto. She highlighted the collaborative effort behind the proposal, involving continuous work with the Governor's team and healthcare experts.

Understanding Reference-Based Pricing

The bill focused on reference-based pricing, a strategy that anchors insurer payments to hospitals using an external standard, often a percentage of Medicare rates. Vermont planned to implement this strategy by 2025, pending the Green Mountain Care Board's regulatory compliance process. S.190 aimed to fast-track this for public school staff and marketplace policyholders by empowering the board with directed authority.

Kaj Samsom of the Vermont Department of Financial Regulation expressed concerns about focusing financial impacts on a narrow group, potentially leading to uneven regulatory compliance outcomes. Despite the veto, the healthcare regulatory board still influences hospital budgets but lacks the specific directive approach proposed by S.190.

The administration plans to revisit reforms in a different proposal, H.585, which addressed varied premiums based on age and allowed small businesses to form insurance purchasing groups. Though previously supported, H.585 did not pass into law. Chief Healthcare Advocate Mike Fisher emphasized the ongoing importance of reference-based pricing in tackling the high costs of hospital services and insurance premiums.