For the third year in a row, health care premiums for schools in Vermont are set to rise by double digits.
The Vermont Education Health Initiative — which manages health care plans for about 34,000 school employees and their dependents — announced proposed premium hikes this week that will average 11.9% next year. The rates won’t technically be finalized until January by the Vermont Department of Financial Regulation, but VEHI announces them months in advance so that schools can plan accordingly.
Rising hospital budgets and prescription drug costs are the main reasons behind the premium increases, as they have been for years.
“It’s kind of always the same message, as far as these are the cost drivers,” said Bobby-Jo Salls, a trust administrator for VEHI. “I think it’s just to the extent that we’re seeing it — it’s just unbelievable.”
The skyrocketing cost of health care was one key reason behind last year’s brutal school budget cycle, when nearly a third of all budgets failed on Town Meeting Day. Education officials are bracing for another tough budget year, and were generally predicting that premiums for school employees would roughly mirror the spikes seen in the larger commercial market.
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Local school officials frequently point to health care as a prime example of runaway costs outside of their control. A statewide contract has governed how schools and their employees split the cost of health insurance since 2021, and in the latest round of negotiations, unions and school boards agreed to extend the current contract through 2027.
The new rates will cost approximately $40 million more than this year’s plans, according to Salls, although part of that will be borne by employees, who typically pay 20% of the premium.
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