Vermont’s annual sign-up window for Affordable Care Act plans doesn’t open until November 1, but sticker shock is already setting in.
Premium rates under what is known as Obamacare are projected to double on average next year, barring heroic methods to revive the expiring federal subsidies that have helped millions of Americans afford plans in recent years. Many in Vermont could confront even bigger jumps in their monthly payments, with price tags for some family plans now far exceeding a typical mortgage payment.
Democrats in Congress say these exorbitant costs are why the federal government must remain shut down until a deal is reached on health care. But Republicans say they aren’t willing to negotiate while the shutdown persists. Weeks into the stalemate, neither side seems willing to budge.
More uninsured patients means more unpaid medical bills, a dangerous prospect for Vermont’s rural hospitals.
The loss of the subsidies would have ripple effects across Vermont. Up to 5,000 people could drop coverage entirely, according to some estimates. That would put them at financial risk if they experience an accident or an illness and could further strain the state’s ailing health care system.
People who ditch insurance tend to be younger and healthier, since they have less motivation to stay insured. Insurance pools that shrink cost more for those who remain. That, in turn, could price out more people until only the sickest are left, giving insurers little reason to stay in the market. It’s a phenomenon referred to as the insurance “death spiral,” and one that experts worry could play out in markets across the country.
More uninsured patients also means more unpaid medical bills, a dangerous prospect for Vermont’s rural hospitals.
The subsidy-related price hikes come as Vermont insurers are scaling back coverage in an attempt to rein in costs. That means many consumers will enter the new year finding themselves paying much more for less coverage.
A few issues are key to understanding the particularly tumultuous coming year for Vermont’s health care system.
No More Subsidies
Wait, how much?
Expect many Vermonters to say that when they see the price of their annual health insurance premiums next year as a result of the expiring federal subsidies now at the heart of the federal shutdown.
Enacted during the pandemic, the subsidies have helped low- and middle-income families better afford coverage under Obamacare, driving enrollments to record levels nationally. But Congress is at a stalemate over whether to renew them. Without a deal soon, the average consumer will pay 114 percent more in out-of-pocket costs next year, according to the nonpartisan health policy group KFF.
Vermont has the highest premium rates in the country, even though about 90 percent of the 30,000 people enrolled in the individual marketplace receive assistance. That means if the subsidies end as planned, Vermont’s health care system will be hard hit.
On a typical plan, a single person earning about $33,000 will have a new $200 payment each month instead of having their premium covered in full.
Subsidies will shrink for people with higher incomes, too, and those earning more than 400 percent of the federal poverty line will lose assistance altogether. A family of four earning $130,000 could see their annual premium climb from $9,000 to $32,000, depending on the plan.
Mike Fisher, Vermont’s chief health care advocate, said he fears many people will do nothing and get automatically reenrolled in their current plan — only to realize that they are locked into something they can no longer afford. He urged consumers to shop around, noting that Blue Cross Blue Shield of Vermont plans can often be significantly more expensive than MVP’s.
While many assume Obamacare is only for people who aren’t offered health insurance at work, it also helps people who are offered plans that are too expensive for them. People can qualify for federal subsidies as long as they can show that their job-based plan fails to meet affordability standards as determined by a percentage of their income. Many are enrolled in Vermont’s insurance marketplace because their employers don’t kick in enough.
Those employer plans might seem more palatable next year when compared to the unsubsidized ones offered on the marketplace, said Tom Bazzano, a health care broker who works with Vermont businesses.
And if a wave of people leave the marketplace for plans offered through work, that’s going to “rock employer budgets,” Bazzano said. “There are a lot of employers out there not paying enough attention to that.”
Among those weighing their options are Jennifer and Tim Heidbrink, both 40, who live in Bellows Falls with their two children. Although the Heidbrinks work full time, only Tim’s job offers insurance, and the cheapest option — a $1,700-a-month, high-deductible plan — does not meet affordability standards.
Instead, subsidies have allowed the family to purchase a Blue Cross plan for about $1,100 a month. Next year, it’ll cost nearly $3,800 a month.
Tim’s employer-offered plan seems almost cheap by comparison. And yet, Jennifer said, they’re not sure they can afford even that.
Who, she asked, has an extra $600 a month “just floating around in their budget?”
Tipping the Scales
Families may wind up paying more for less coverage. Case in point: The class of weight-loss drugs known as GLP-1, which have been heralded as a major breakthrough in the treatment of obesity.
Their exploding popularity has come at a big cost for Vermont insurance companies and major employers, who say demand for the drugs has contributed to the state’s health care affordability problem.
Administered via injections, drugs such as Ozempic, Wegovy and Zepbound have been credited with helping scores of people shed pounds by curbing food cravings and slowing digestion. The medications are now being studied for other potential health benefits that could further increase their use.
But neither Blue Cross nor MVP will cover GLP-1s for obesity in Vermont next year. Ditto the plans offered to public school employees. And at the University of Vermont Medical Center, employees will need to complete three months of “lifestyle modifications” before they can get a new prescription covered next year. (Existing prescriptions will still be covered.)
The loss of coverage at Blue Cross alone will affect an estimated 3,400 Vermonters.
Tom Weigel, vice president and chief medical officer at Blue Cross Blue Shield of Vermont, said the drugs are overpriced, costing more than $1,000 per month — far more than what people pay in other countries. And patients often stop taking the drugs within the first few months, he said, before they can really be effective.
“The rough math on that is half the money we spend on the GLP-1s is not going to anyone’s benefit,” he said. “That’s millions and millions of dollars.”
Big employers are making a similar calculus as they decide whether to continue covering the drugs for their workers. The economic argument in favor is that they can help people avoid more costly health problems down the road. But those benefits might not be evident until workers are retired — a tough sell to executives grappling with high costs right now, said Bazzano, the broker.
“Employers have a hard time seeing the return on investment,” he said.
Some employers will likely cover the drugs anyway, viewing that as a retention tool, similar to the way some justify covering fertility treatments, Bazzano said. Blue Cross confirmed that a few major employers in Vermont will pay extra to cover the drugs, though it declined to say which ones.
People who do lose coverage have the option of purchasing some of the drugs directly from the manufacturers. Novo Nordisk, for example, has started selling Ozempic and Wegovy at Costco for $500 a month. That’s about half of what insurance companies pay but still more than many can afford on their own.
Medicare Disadvantage
Many seniors in Vermont, meantime, are wrestling with change. That’s because two major insurers will no longer offer Medicare Advantage.
The private insurance program provides people 65 and older one-stop shopping for health insurance needs. It exploded in popularity thanks to snazzy marketing campaigns featuring the endorsements of trusted, famous Americans, such as retired football quarterback Joe Namath. More than half of all U.S. Medicare beneficiaries are now covered by the plans.
But the great Medicare Advantage boom appears to be slowing down in much of the country, and in Vermont, a measurable contraction is under way.
UnitedHealthcare and Blue Cross separately announced this fall that they will no longer offer Advantage plans next year, citing rising costs and diminishing returns. The decision leaves most of Vermont with no access to the insurance program. Last year, MVP and Wellcare fled the market, and the final remaining Medicare Advantage plan, offered by Humana, only covers people in the southern part of the state.
“They pulled the rug out from under us,” said 80-year-old Bob Reid of Hinesburg, who received a letter from Blue Cross earlier this month notifying him of the change.
Some 35,000 seniors need to find new health insurance for next year. But a statewide program that helps people navigate Medicare has had so many requests for one-on-one appointments this fall that it stopped accepting new referrals only a few days after the annual Medicare open enrollment period began on October 15.
“We’ve hit our capacity, which is totally insane,” said Samuel Carleton, who oversees the State Health Insurance Program. “We’ve never ever had this much demand.”
People who lost coverage in Vermont can opt back in to traditional Medicare. They will be allowed to enroll in a supplemental insurance plan, known as Medigap, without consideration of their preexisting conditions as long as they sign up within 63 days after their coverage ends. That gives most people until early March to make a decision, though experts encourage choosing a new plan before then to avoid coverage lapses.
The loss of Medicare Advantage plans may ultimately be a good thing for Vermont, Carleton said. While the plans offer simplicity and low monthly payments, they have been criticized for providing limited in-network coverage and exposing people to surprise costs when emergencies arise. They also require prior authorization, or preapproval, for many procedures.
A federal report in 2022 found that 13 percent of services denied by Advantage plans would have been covered under traditional Medicare.
Still, surveys have found that Advantage customers are generally as happy with their coverage as traditional Medicare recipients are with theirs. Meanwhile, those who recently lost Advantage coverage in Vermont may struggle to find an affordable replacement.
Jonathan Kohn, 71, is running into that problem. Notified by UnitedHealthcare that he will soon lose access to his $680-a-year Medicare Advantage plan, Kohn has determined that he would need to pay about $5,000 a year to duplicate his existing coverage.
The Burlington resident works a retail job and can’t afford to pay that much. Cheaper plans tend to limit what they cover, leaving him exposed to high risk. One plan, for instance, would cost about $140 a month but doesn’t cover emergency room visits — a nonstarter for Kohn, an avid cyclist.
He plans to eventually meet with a Medicare adviser to talk through his options. He’s at a loss, he said, over what to do.
“I feel really behind the eight ball here,” Kohn said.
The original print version of this article was headlined “Prognosis: Fiscal Pain | Many Vermonters are facing sharply higher health care plan costs, fewer options and less coverage”
This article appears in Oct 29 – Nov 4 2025.
Got something to say?
Send a letter to the editor and we'll publish your feedback in print!