![\"A](\"https:\/\/vtdigger.org\/wp-content\/uploads\/2025\/07\/e-board-1-20250731-1200x798.jpg\")
Gov. Phil Scott listens to an economic briefing at the Statehouse in Montpelier in July 2025. File photo by Glenn Russell\/VTDigger<\/p>\nGov. Phil Scott listens to an economic briefing at the Statehouse in Montpelier in July 2025. File photo by Glenn Russell\/VTDigger<\/p>\n
Gov. Phil Scott has vetoed S.190<\/a>, a healthcare bill designed to fast-track premium savings for two groups of insurance customers: public school employees and people buying plans on Vermont\u2019s Affordable Care Act marketplace.\u00a0<\/p>\n The bill was one of the few healthcare reform initiatives the Legislature passed this session.\u00a0\u00a0<\/p>\n It would have sped up the state\u2019s ability to begin using a cost-saving tool called reference-based pricing, but only for those two groups of insurance buyers.\u00a0<\/p>\n In a Tuesday letter explaining his decision,<\/a> Scott said he intends to use executive action to instead push forward parts of an insurance reform bill his administration put forward this session.<\/p>\n Scott cited fairness throughout the insurance marketplace as the primary reason for his veto.\u00a0<\/p>\n \u201cVermont will not solve its affordability crisis by directing savings to some payers while excluding others,\u201d he wrote in his Tuesday letter. \u201cLasting progress will require structural reforms that expand affordability, increase choices, and ensure savings are shared broadly across the system.\u201d\u00a0<\/p>\n Rep. Alyssa Black, D-Essex Town, who chairs the House\u2019s healthcare committee and championed S.190, was incensed that the governor vetoed a bill she said his administration had been integral to creating, alongside her and other healthcare policy experts.\u00a0<\/p>\n \u201cIt\u2019s almost like he\u2019s taking revenge. It felt vengeful,\u201d she said. \u201cHow he vetoes something that was the one final step in everything that we have done collaboratively for two years, I cannot wrap my head around it.\u201d<\/p>\n Reference-based pricing ties insurers\u2019 payments to hospitals to an external benchmark \u2014 usually a percentage of the rates that Medicare pays hospitals. In 2025, lawmakers set Vermont on a path<\/a> to implement reference-based pricing for all of the state\u2019s hospitals. However, that change requires the Green Mountain Care Board, the state\u2019s main healthcare regulator, to go through a rulemaking process, which would not be finalized by the start of the coming hospital fiscal year in October, delaying the pricing reform implementation.<\/p>\n Lawmakers aimed to expedite that with S.190. The bill proposed giving the care board the ability to direct hospitals to implement reference-based pricing for two health insurance groups: public school employees and people who buy coverage on Vermont\u2019s Affordable Care Act marketplace.\u00a0<\/p>\n Yet Scott wrote that targeting those specific insurance markets chafes against the Green Mountain Care Board\u2019s statutorily defined mission<\/a> to share cost savings equally among insurers and the insured.<\/p>\n Kaj Samsom, the commissioner of the Vermont Department of Financial Regulation, which regulates insurers and closely followed the bill, emphasized the point.<\/p>\n \u201cTo take such a significant hospital revenue reduction and focus it just on a minority of Vermonters was problematic,\u201d he told VTDigger in May, before the bill was passed.\u00a0<\/p>\n The care board still has the regulatory power to trim hospital budgets this summer \u2014\u00a0it just won\u2019t have the ability to direct those savings at specific insurance buyers, as S.190 proposed.<\/p>\n \u201cThis care board has shown no hesitancy to find savings,\u201d Samsom said in May. \u201cI guarantee you that with or without reference-based pricing, the care board is going to drive down hospital revenue and insurance like they always do, in the existing framework.\u201d<\/p>\n Scott echoed Samsom\u2019s rationale in his letter, writing that the care board has called for $40 million in hospital revenue reduction this fiscal year \u2014\u00a0following last year\u2019s nearly $100 million in total revenue reductions<\/a>, which, in turn, led to smaller commercial insurance rate increases.\u00a0\u00a0<\/p>\n \u201cI urge the GMCB to follow-through with that policy and generate the same level of savings it otherwise would have achieved while ensuring those savings benefit all payers,\u201d read Scott\u2019s letter.<\/p>\n But Black said Scott\u2019s plan wouldn\u2019t generate meaningful savings for insurance customers.<\/p>\n \u201cWe ran those numbers, and there would be no discernible effect on premiums. None,\u201d she said of the further hospital revenue cuts. Spread evenly across premiums, those savings would be marginal, she said.\u00a0<\/p>\n Black said lawmakers chose to target teacher insurance because those costs are borne by property tax payers. And with the loss this year of some federal healthcare insurance subsidies<\/a>, people who buy Affordable Care Act marketplace plans have also faced increased costs worth targeting, she said.\u00a0<\/p>\n