is 开云体育鈥檚 listener-powered journalism podcast. Every episode begins with a question submitted by our audience. Today, a question from Rosie Krueger, of Montpelier:
鈥淲hy does the cost of health insurance keep going up much faster than inflation year after year? Where is all that money going?鈥�
The good news: There鈥檚 a pretty straightforward answer to Rosie鈥檚 question. The bad news: It鈥檚 hard to know what to do about it.
Note: Our show is made for the ear. We highly recommend listening to the audio. We鈥檝e also provided a transcript. Transcripts are generated using a combination of robots and human transcribers, and they may contain errors.
Loading...
鈥業t just doesn鈥檛 make sense鈥�
Josh Crane: From 开云体育 and the NPR Network, this is Brave Little State. I鈥檓 Josh Crane.
Rosie Krueger: Yeah, so I'm Rosie Krueger. We're here in my home in Montpelier, Vermont.
Josh Crane: Rosie Krueger believes in the power of good governance. She got a taste as a legislative assistant in the U.S. House of Representatives more than a decade ago. And now, she works for the state of Vermont. But the reason I鈥檓 talking to her is because of her experience on the Montpelier City Council between 2017 and 2019.
Rosie Krueger: You know, a big part of that role is figuring out the budget and that you're going to present to taxpayers.
Josh Crane: Setting budgets, especially municipal budgets, is the type of cocktail party fodder to use if you want to be left alone. But bear with me because, for Rosie, good budgeting means good governance. Except during her time on the City Council, she encountered a fundamental, frustrating problem.
And it planted a seed of curiosity.
Rosie Krueger: It just doesn't make sense.
Josh Crane: Rosie remembers going into the budgeting process dreaming about all the ways she and other council members could make their community stronger, like funding badly needed road repairs. And Rosie hoped to keep this spending within the rate of inflation, to avoid majorly raising taxes.
To her, it just seemed practical. Sensible. And she learned, in practice, it was also entirely unrealistic. That鈥檚 because there was one big part of the budget that was increasing by about double the rate of inflation at the time 鈥� and even worse, local officials like Rosie had no control over it. I鈥檓 talking about the cost of health insurance for city employees.
Rosie Krueger: As a policy maker, you know, there's all these great things that you want to do, but you have to start the conversation every year with, 鈥淲hat are we going to cut in order to just make up for this health insurance cost?鈥�
Josh Crane: As the years have gone by, and Rosie鈥檚 moved on to other things, this health insurance dilemma has only gotten worse.
Vermont health insurance was already among the most expensive in the country back in 2019, the year Rosie left the City Council. The average premium 鈥� that is, the price for plans on the Vermont marketplace 鈥� that year, it was .
This year, in 2025, it鈥檚 more than 140% higher than the national average. And for individuals who get their insurance through their employers, not the marketplace, it鈥檚 not good news either: .
Rosie鈥檚 been paying close attention to all of this. And what used to be frustration has morphed into something closer to bewilderment. Because, on the surface, it doesn鈥檛 seem like costs should be so high here.
Vermont regularly checks in near the very top of 鈥�. And, theoretically, healthier populations should be cheaper to care for. And, yes, Vermont does have a pretty old population鈥�
Rosie Krueger: But if you look at a state like Maine, they're older than Vermont, and they're not seeing the same spike. Like they're seeing the sort of the normal spike. And so if it was just an older population thing, like, that doesn't really explain it.
Josh Crane: It鈥檚 true: The average premium for plans on Maine鈥檚 marketplace hovers right around the national average. And in New Hampshire, premiums are below the national average 鈥� and they鈥檝e actually gotten cheaper since 2019.
Rosie鈥檚 like, please, just make it make sense. So she asked:
Rosie Krueger: Why are health insurance premiums increasing so much faster than inflation, and where is all that money going?
Josh Crane: When we put Rosie鈥檚 question in a public voting round to decide the focus for this episode, it won in a landslide. Health insurance costs are top of mind for a lot of people right now. I do have some good news. There鈥檚 a pretty straightforward answer to Rosie鈥檚 question. The question that鈥檚 harder to answer is what do you do about it.
Josh Crane: But first, we do have to pay the bills here at Brave Little State and 开云体育 鈥� those health insurance premiums are not gonna pay for themselves 鈥� so, we鈥檒l be right back after these messages.
_
High volume, high levels of care, high prices
Josh Crane: The health care system is complicated 鈥� mind-numbingly complicated. But in Vermont, I鈥檓 going to focus on three main characters in this health care drama:
First, the University of Vermont Medical Center, based in Burlington. There are lots of different places all over the state where Vermonters can go get health care, but UVM Medical Center is the biggest by a lot. than the second-biggest hospital here, in Rutland, based on annual budgets.
Next up, Blue Cross Blue Shield of Vermont. There are other health insurance companies with customers here, but Blue Cross Vermont is the huge one. A whopping , as opposed to Medicare or Medicaid, are covered by Blue Cross Blue Shield. That includes us here at 开云体育, by the way.
That brings us to our third and final main character: The Green Mountain Care Board. They鈥檙e an independent regulatory group that was established in 2011. And they regulate both health insurance companies and hospitals. Their mission is to keep the , while maintaining the overall health of, you know, the health care system.
So, those are the players on center stage: one big hospital, one big insurance company and one regulatory board. And then there鈥檚 the rest of us, sitting in the proverbial audience. We鈥檙e the patients, the people who seek health care and then try to figure out how the heck to pay for it.
: Welcome to the House Appropriations Committee. It is Thursday, Feb. 20, 2025. And we're delighted this afternoon to have the Green Mountain Care Board with us.
Josh Crane: Just the other week in the Vermont Statehouse, the Green Mountain Care Board went in front of state lawmakers. Rosie Krueger, our question-asker 鈥� she actually tipped me off on this. She was like, 鈥淵ou鈥檝e GOT to listen to this.鈥� And she was right. The meeting was essentially an interview with the chair of the Green Mountain Care Board, a guy named Owen Foster.
Owen Foster: I'm a lawyer by trade. My job right before this prosecuted health care fraud.
Josh Crane: Owen was also one of the 鈥� the maker of addictive painkiller OxyContin 鈥� which led to an $8 billion settlement. He grew up in Middlebury and was appointed to the Care Board by Gov. Phil Scott in 2022.
Owen and the rest of the Care Board were meeting with lawmakers on this day in February to go over the regulators鈥� annual budget. But for most of the time, elected officials just peppered them with questions. Because, it turns out, they were wondering the same thing we are: Why are health insurance prices so high?
Owen Foster: Yeah, that鈥檚 easy. It's pharmaceutical prices, it's hospital prices and it's increased utilization. I mean, we know what's driving it.
Josh Crane: He was like, it鈥檚 simple: Health insurance prices are so high because the thing our health insurance is paying for 鈥� the actual health care 鈥� has gotten really expensive. And, we as a state are using more of that really expensive thing.
Examining high prices
Josh Crane: Nationally, hospital prices .
But there鈥檚 also evidence that hospital prices in Vermont are especially high. That鈥檚 thanks to a nonprofit called RAND Corporation. They found that if you have commercial insurance and get an outpatient procedure, treatment or test done in Vermont, it鈥檒l run you about 11% more than the national median.
But prices vary pretty wildly across our region too. Dartmouth-Hitchcock Medical Center in New Hampshire is the other major hospital serving this region, and their prices for the same types of services are slightly below that national benchmark. Meanwhile, they鈥檙e almost 40% higher at the UVM Medical Center.
Those numbers, by the way, are based on prices from 2020 through 2022. In the three years since, prices at UVM have only gotten higher and higher.
The UVM Medical Center explains this discrepancy, at least in part, by pointing to the services they offer that generally lose money, like dialysis and primary care.
Stephen Leffler: Dartmouth doesn't do dialysis. Dartmouth does less primary care than us, and less of a couple other services.
Josh Crane: Dr. Stephen Leffler is the president of the UVM Medical Center. So, basically, he鈥檚 saying higher prices help UVM balance out those losses 鈥� higher prices for things like outpatient services, which includes care delivered by emergency departments. And emergency departments play an outsized role in Vermont鈥檚 health care landscape.
Vermont鈥檚 emergency department bottleneck
Stephen Leffler: When I came back to Vermont in 1993 as a brand new young emergency medicine doctor, our ED at the time saw about 32,000 patients a year.
Josh Crane: Steve practiced emergency medicine at UVM for more than three decades. And during that time, they built a new facility with more capacity.
Stephen Leffler: And we built that one to see about 40,000 patients. We're still in that one. And we're going to see 70,000 patients in our ED this year through the same sized space.
Josh Crane: 70,000 patients in a space built for 40,000 is nightmare fuel for people like me who get anxious in crowded emergency rooms. And this isn鈥檛 new: In 2022, nearly 75% of all patients at the UVM Medical Center were seen in the emergency department. It鈥檚 part of a larger trend. Doctors all over the state have been .
Dozens of residential nursing homes have closed around the state in recent years. There also aren鈥檛 enough primary care providers. Owen Foster, Chair of the Green Mountain Care Board, told me that he couldn鈥檛 even find a primary care provider for himself for many years, even after he was appointed to one of the most prominent health care positions in the state.
More from Brave Little State: 鈥淭he long wait for primary care in Vermont鈥�
Julie Wasserman: I mean we鈥檙e in a crisis. We have community-based services crumbling.
Josh Crane: Julie Wasserman is an independent health care consultant who spoke to 开云体育 earlier this year.
Julie Wasserman: Whether it's primary care, mental health, home health, you name it, we have underfunded them for so many years that people are showing up in the ER when, if they had gone to a community-based service, the ER visit could be avoided.
Josh Crane: A hospital's emergency department specializes in immediate and urgent care. But because of a lack of other options, they鈥檙e being asked to fill the void of ongoing care more and more. So, fewer options means more people getting , and staying there longer, whether they need that higher level of care or not. And care provided by emergency departments, and hospitals in general, is just way more expensive.
More advanced, more expensive medicine
Stephen Leffler: We're going to take care of you if you sprain your ankle or if you need heart surgery or highly advanced cancer care.
Josh Crane: Steve Leffler again, president of the UVM Medical Center. He says one of the reasons his hospital鈥檚 prices are so high is because they provide the highest level of specialized care in the state, from heart surgeries to advanced cancer care. And they also fill the role of a community hospital, treating ankle sprains and delivering babies.
This is convenient in some ways. But going to a hospital for a minor ankle sprain is sort of like going to NASA for a weather report. It鈥檚 not that that weather report doesn鈥檛 matter, it鈥檚 just that NASA might be a little鈥� over the top.
And Steve says hospitals like the UVM Medical Center are getting more advanced all the time. That more advanced care is also more expensive which fits what Blue Cross Blue Shield of Vermont has been noticing in their patients鈥� claims. It鈥檚 not that there are so many more people seeking care overall. It鈥檚 that when they are, they鈥檙e doing so in high-priced settings, and also receiving more services, like labs, testing and imaging.
Circumstances beyond the practice of medicine are also impacting the UVM Medical Center鈥檚 bottom line 鈥� like Vermont鈥檚 housing crisis. Over the past few years, on top of increasing salaries, they鈥檝e also been
All of this adds up. , an increase of $1.6 billion.
But increased spending isn鈥檛 the only explanation for high hospital prices.
There鈥檚 a different explanation I heard over the course of my reporting.
Alex Garlick: UVM Medical Center has monopoly power in this part of the state to set prices.
Josh Crane: We鈥檒l be right back.
鈥楳onopoly power鈥�
Alex Garlick: When you only have one major provider serving most of the state, they get to charge the prices they want to charge.
Josh Crane: This is Alex Garlick. He鈥檚 an Assistant Professor of Political Science at the University of Vermont and the author of a forthcoming book about health care lobbying.
Alex Garlick: While the Care Board is looking at this as hard as they can, and the insurance companies are trying to limit premiums, ultimately, the price of the services are what matters, and UVM can, UVM Medical Center charges the prices that the market will bear, which are relatively high.
Josh Crane: . In basic terms, fewer hospitals competing with one another means they have more control of the 鈥渟upply鈥� for health care services. And since there will always be demand for health care services, this gives hospitals leverage.
The UVM Health Network, which includes the UVM Medical Center, says it was formed to preserve access to care, and that the alternative would not be more competition, but less access to care overall.
According to Alex Garlick, though, if you鈥檙e wondering why Vermont health care prices are so high, even compared to our neighbors in New England鈥arket power is a factor.
Alex Garlick: And if you look at some of our other peer states in the region, like New Hampshire or like Massachusetts, they have competition from their health care providers. There's no such competition in Vermont, and so there's very few, there's very few limits being placed on prices going up from the market to slow it down.
Josh Crane: Few limits, but not no limits. That鈥檚 where the Green Mountain Care Board comes in.
Alex Garlick: The recent showdown between the Green Mountain Care Board and the UVM Medical Center is the most important thing to point at.
: New this morning the Green Mountain Care Board has reached a conclusion in their budget review for fiscal year 2025, and Vermont hospitals are taking budget cuts.
Josh Crane: Last fall, the Green Mountain Care Board . They approved a budget for UVM Medical Center that was bigger than last year, but smaller than the medical center had proposed. And they also did something unprecedented in the board鈥檚 history 鈥� require UVM to reduce commercial prices by 1%.
The Care Board said they found the UVM Medical Center鈥檚 budget proposal to include 鈥渉igher than necessary commercial prices,鈥� and instead urged them to address inefficiencies in their spending. It was the first time since the Board was created in 2011 that they ordered a hospital to reduce commercial prices.
The UVM Health Network released a statement saying they disagreed 鈥渧igorously鈥� with the Care Board鈥檚 decision, and it wasn鈥檛 long before they announced some news of their own:
: Citing recent budget orders from the Green Mountain Care Board, the UVM Health Network announces cuts to a range of patient services.
Josh Crane: Cuts to the number of patients admitted to the UVM Medical Center and to an inpatient psych unit in central Vermont, and consolidation for primary care and rehab clinics in that area as well. The announcement also mentioned cuts to administrative services, and that the health network would stop running kidney dialysis clinics around the state.
CEO of the UVM Health Network, Dr. Sunny Eappen, described these as cuts they were being 鈥渇orced to make.鈥�
Protesters: Stop the cuts! Stop the cuts!
Josh Crane: But the announcement sparked outrage among patients, lawmakers and even staff across the UVM Health Network. One of the main concerns was the impact on some of the state鈥檚 residents.
: Protesters (chanting): What do we want? No cuts! When do we want it? Now!
Anchor: Providers at Vermont鈥檚 largest hospital taking to the streets over proposed cuts to patient services.
: Nurses and staff at UVM medical center held a march and rally today in protest of program cuts announced by the UVM Health Network.
Protesters: Hey hey, ho ho, reverse the cuts they鈥檝e got to go. Hey hey, ho ho, reverse the cuts they鈥檝e got to go. Hey hey, ho ho鈥�
Josh Crane: UVM Health Network ultimately decided to keep operating the dialysis centers, though they went forward with the rest of the cuts.
Now, the UVM Health Network brought in close to $3 billion last year, netting about $86 million after expenses. It was a rare financial positive in a state where most hospitals are operating at a loss. This is one of the reasons the cuts struck such a nerve.
I asked UVM Medical Center President Steve Leffler about this.
Josh Crane: What would it take for the UVM Medical Center and the health network more broadly to get to a place where you can lower commercial prices to more affordable levels without cutting patient services? What would need to happen?
Stephen Leffler: So, we work on that every day. We're working on it now. We keep cutting administrative expenses down as much as we possibly can. There is a limit to how much administrative expense you can cut. There's only a little bit you can do around those edges.
Josh Crane: The UVM Health Network reports they鈥檝e reduced administrative costs by about $40 million over two years. But they say cuts to patient services are still needed sometimes, regardless.
Stephen Leffler: In a very rural state, where oftentimes the volume of service is lower than what would be optimal to break even, we have to have some give and take.
Josh Crane: I ask Steve where that $86 million earned from operations last year goes.
Stephen Leffler: It's very, very important in any kind of business鈥攁nd healthcare is both, the important thing is we take care of people, but it is a business in some ways鈥攊s we have to have money left at the end of the year to reinvest in the people that work here, in the tools and equipment we use to take care of you, to upgrade and keep it new and current, and to keep our facilities new and modern.
Josh Crane: Facilities, equipment and people. Reinvesting in people included . UVM said its decision to give those bonuses was based on national benchmarks.
Cost surge
So, what does this all mean for the third character in Vermont鈥檚 health care drama, the big insurance company, Blue Cross Blue Shield of Vermont?
told me that the company鈥檚 premiums, already some of the highest in the country, just haven鈥檛 been enough for the company to cover the cost of care.
Don George: We have had this unprecedented and unrelenting three-year cost surge that has further reduced Blue Cross Blue Shield reserves to what I would acknowledge is a dangerously low level.
Josh Crane: Blue Cross Blue Shield of Vermont paid out about a third more in claims in 2023 than they did in 2022. And they reported paying out more in claims last October than any other single month in the company鈥檚 history.
The Vermont Department of Financial Regulation last year, about Blue Cross鈥� ability to remain solvent.
Owen Foster told 开云体育 earlier this year that those concerns, together with Blue Cross鈥� , were key reasons the Care Board approved another huge round of premium increases in 2025.
Owen Foster: People can't pay it. And yet, if you don't, Blue Cross faces very serious insolvency, very serious. And if they go bankrupt, that is Armageddon.
鈥楴o sugarcoating it鈥�
Josh Crane: So. We are spending all this money on health insurance. Is it at least buying us better quality care? That is something Rep. Woodman Page from Orleans County was also wondering during a recent hearing with the Green Mountain Care Board.
Rep. Woodman Page: Is our health care getting any better?
Owen Foster: Again, these are very nuanced questions. I'll, I'm answering kind of high level, so this is not a complete answer. But no. No. It's not.
Josh Crane: How to improve the quality of Vermont health care 鈥� and what that word, quality, even means 鈥� that鈥檚 a topic for a different story. But in this reporting about 鈥渁ffordability鈥� it became clear that quality care and affordable care often have something in common: local. Here鈥檚 what Owen Foster recently told lawmakers:
Owen Foster: So, local emergency care, urgent care, we need primary care in every community, mental health and long-term care. We're also aging, so we have the memory care that we need. We need to prioritize the care that we have.
Josh Crane: Hospitals are incredible resources 鈥� and they do serve local communities. But hospitals are also the most expensive places to get health care 鈥� and that also often extends to local clinics and health care centers that are part of larger hospital networks. In Vermont, we need options at different price points.
Those options are increasingly going away. In a bit of brutal irony, one of the big reasons this is happening is because those independent, community health centers . And yet without access to those care centers, there are few ways to get insurance prices under control.
Owen Foster: What can you control? We can't control pharmaceutical prices today. You're not gonna control what they take, right? People are gonna take them. So forget that. That's just gonna be what it is. Then second, you have hospital utilization. What are you gonna do? You can't go to the hospital? You can't, you can't do this? You, you can't really control when people need to go to the doctor. Third, acuity. You can't really make people get healthier, tell hospitals don't bill for the level of acuity. Fourth, you have hospital price. That's the one you can control. Right? And that鈥檚 not all of the problem here but that is a problem in this state. Our hospital prices are too high.
Josh Crane: But regulating hospital prices is not a big enough lever to fix our system 鈥� a system where our major insurance company is at risk of bankruptcy, where , and where the state鈥檚 primary health network has recently cut services.
Owen Foster: Right now, my view is you're in a state, we are in a state, where we need to identify what's really at risk and then make priorities as to what we need to maintain and ensure we have. You're going to be losing services. There's no sugarcoating it.
Rosie Krueger: As a Vermonter, I see things happening like our homelessness crisis, and I really want to do something about it.
Josh Crane: Question-asker Rosie Krueger again.
Rosie Krueger: Montpelier, you know, has a really high unhoused population. I think city government would like to do more about it, but they're looking at having to cut staff and cut services just to deal with the health insurance premiums for the city, and same thing with the school district.
Josh Crane: Town Meeting Day is around the corner, and this year, like last year, there will be a lot of focus on property tax increases. And, once again, skyrocketing health insurance costs for teachers and other public employees play a big role.
Rosie Krueger: I don't know that everybody realizes that when we're having a conversation about how much property taxes are going up because of school budgets, what a huge portion of it is just the fact that health insurance is going up so much so the same amount of employees cost you way more every single year.
Loading...
_
Credits
Thanks to Rosie Krueger for the great and timely question.
This episode was reported by Josh Crane, with additional reporting from Lexi Krupp. Editing and additional production from Sabine Poux and Burgess Brown. Our intern is Catherine Morrissey. Digital support from Zoe McDonald. Angela Evancie is our Executive Producer. Theme music by Ty Gibbons; other music by Blue Dot Sessions and Universal Production Music.
Special thanks to Laura Nakasaka, Michelle Goodell, Phil Galewitz, Kiana Moore, Annie Mackin, Kristen LaJeunesse and Sara Teachout.
As always, our journalism is better when you鈥檙e a part of it:
- Sign up for the BLS newsletter
- Say hi on and @bravestatevt
- Drop us an email: [email protected]
- to support people-powered journalism
- Tell your friends about the show!
Brave Little State is a production of 开云体育 and a proud member of the NPR Network.
