Lawmakers Hear Competing Views on H.585 as Witnesses Urge Broad Cost Controls, Not Narrow Fixes

A legislative committee heard nearly two hours of testimony on H.585, a bill that would change how association health plans, site-neutral reimbursements and other insurer rules apply in Vermont.

Christine Oliver, a broker with a national firm who oversees Vermont benefits work, told the committee that Vermont's market sits between three funding models—fully insured exchange plans, self-funded plans and level-funded hybrids—and recommended broad-based cost controls rather than measures that would apply only to the exchange. "When you look at... Act 55, the specialty drug bill, the beauty of that is it really was applied across the board," Oliver said, urging lawmakers not to limit savings to "25% of the market." She warned that association plans have pulled some risk out of the exchange in past iterations and that any change requires careful analysis of where healthy lives would move.

Emily Brown, executive director of the Green Mountain Care Board, echoed the concern that loosening association plan rules could cause adverse selection in Vermont's small-group market. The board supports cost-control measures to keep premiums affordable but cautioned that Vermont is a small state and losing scale could raise instability: "The greater the pool, the more stable it is," Brown said, noting small-group enrollment moved from roughly 33,000 in 2014 to 32,000 now and that the board is wary of one-off statutory carve-outs for a single service line.

Legislators and witnesses also discussed reference-based pricing'—setting reimbursements as a percentage of Medicare or a similar benchmark'and expanding the Act 55 approach that targeted specialty drugs. Proponents said targeting labs and imaging next could push down the underlying costs that drive premiums; critics cautioned about potential unintended consequences for hospitals and for the fully insured market if only a portion of the system changes.

Jen Carvey, legislative counsel, outlined the bill's structure: governance and executive compensation provisions for nonprofit hospital service corporations; a study and framework for potential association-plan expansion (with key statutory changes slated to take effect in 2028, contingent on federal law); site-neutral reimbursement for certain outpatient services with an October 2026 rollout; and plan-design flexibilities for qualified health plans. Carvey flagged that some sections require further financial analysis and that effective dates vary by provision.

What happens next: Committee members asked DFR and the Green Mountain Care Board for market impact analyses on any expansion of association plans and on site-neutral reimbursement language. Several senators said they would prefer phased approaches or pilot programs while the state continues broader work on hospital transformation and provider rate-setting.