Vermont Concludes $100 Million Healthcare Payment Experiment
Montpelier, Saturday, 14 March 2026.
After investing nearly $100 million, Vermont has ended its eight-year healthcare payment experiment. Policymakers are now analyzing the results to guide future US medical cost reforms.
The Rise and Fall of the All-Payer Model
Following the conclusion of 2025, Vermont’s eight-year “all-payer” health care experiment officially sunset [1]. Initiated in 2018 through an agreement with the federal government, the model was designed to pivot the state’s medical billing away from traditional fee-for-service structures, instead incentivizing preventive care [1]. Over its lifespan, nearly $100 million was invested into the initiative, which was heavily anchored by OneCare Vermont, an accountable care organization (ACO) originally formed as a for-profit entity in 2013 by the University of Vermont Medical Center and Dartmouth Hitchcock Medical Center [1]. The program’s policy roots trace back to the early 2010s when former Governor Peter Shumlin made an unsuccessful bid to establish universal health care in the state [1]. Today, OneCare Vermont is operating in a significantly reduced capacity, undergoing a staged wind-down through the end of 2026 as it finalizes layoffs and data offloading [1][alert! ‘The wind-down is currently ongoing and subject to administrative timelines’].
Navigating a Statewide Affordability Crisis
The sunsetting of the all-payer model coincides with a severe healthcare affordability crisis in Vermont. According to a March 8, 2026 report by Vermont Healthcare 911 (VHC911)—co-chaired by former Governor James Douglas—Vermont held the nation’s most expensive health insurance premiums in 2025, costing 2.5 times the national average [2]. The financial burden is staggering for residents, who currently spend 19.6% of their personal income on health care [2]. Institutional providers are equally strained; in 2025, the state’s Federally Qualified Health Centers reported a combined deficit of $8.5 million, and in 2023, the UVM Medical Center lost $116 million treating Medicare patients [2]. This environment has forced aggressive regulatory action. During the week of December 22, 2025, the Green Mountain Care Board (GMCB) requested that Vermont hospitals cut their private insurer charges by 1% [3]. Additionally, Act 68 currently mandates a 2.5% reduction in hospital spending for fiscal year 2026 [2][alert! ‘Final compliance data for FY2026 is not yet available’].
Legislative Pivots and Future Policies
As the state processes the shortcomings of the all-payer model, lawmakers are attempting to salvage its more promising components through new legislation. A current proposal, S.197, seeks to reimagine primary care compensation by paying providers a fixed monthly sum [1]. This mirrors OneCare’s Comprehensive Payment Reform (CPR) program, which OneCare CEO Tom Borys praised during a January 2026 Senate Health and Welfare Committee hearing for benefiting independent practices, though he cautioned about the significant administrative effort required for implementation [1]. Democratic Senator Ginny Lyons of Chittenden Southeast has championed the fixed-payment model as “the next step for health care reform” [1]. Meanwhile, other partisan approaches have stalled; in 2025, Republican Governor Phil Scott’s administration introduced H.585, aiming to open association health plans and allow age-based premium adjustments, but the proposals were ultimately killed or relegated to a study [4].