Vermont Governor Scott Vetoes Healthcare Reform Bill, Citing Need for Broader Reforms

Vermont Governor Phil Scott has vetoed S.190, a healthcare bill that would have accelerated premium savings for public school employees and individuals purchasing insurance on Vermont's Affordable Care Act marketplace. The measure was among the few healthcare reform initiatives passed by the Vermont Legislature during the session. Scott announced his decision in a Tuesday letter, stating he would instead pursue executive action to advance components of an alternative insurance reform proposal from his administration.

The vetoed bill would have expedited Vermont's implementation of reference-based pricing—a cost-control mechanism that ties hospital payments to external benchmarks, typically a percentage of Medicare rates—for the two targeted insurance groups. Lawmakers designed the measure to accelerate the timeline for implementing the pricing reform, which was set to begin statewide in 2025 but faced delays pending regulatory approval from the Green Mountain Care Board. However, Scott objected to the narrowly targeted approach, arguing it violated principles of equitable cost-sharing. "Vermont will not solve its affordability crisis by directing savings to some payers while excluding others," Scott wrote. "Lasting progress will require structural reforms that expand affordability, increase choices, and ensure savings are shared broadly across the system."

Scott emphasized that the Green Mountain Care Board—Vermont's primary healthcare regulator—has demonstrated capability to generate substantial savings within existing frameworks. He noted the board had called for $40 million in hospital revenue reductions in the current fiscal year, following nearly $100 million in reductions the prior year. Kaj Samsom, Vermont's insurance commissioner, supported this position, contending that targeting revenue reductions to only a minority of Vermonters through the bill's approach was problematic.

Representative Alyssa Black, D-Essex Town and chair of the House healthcare committee, strongly opposed the veto. Black had championed S.190 and stated that Scott's administration had been integral to its development alongside healthcare policy experts over two years of collaborative work. She expressed frustration at the governor's decision, saying the bill represented the culmination of sustained legislative-executive partnership. "It's almost like he's taking revenge. It felt vengeful," Black said. "How 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."

Reference-based pricing remains a central component of Vermont's healthcare strategy, with lawmakers having set the state on a path toward universal implementation across all hospitals in 2025. The Green Mountain Care Board must complete a rulemaking process to finalize the change, which would not be finalized before the hospital fiscal year begins in October—the delay that S.190 sought to address for the two targeted insurance groups.