The federal “Inflation Reduction Act” should reduce health care costs for many Vermonters

Vermont Business Magazine Governor Phil Scott today announced that the federal Inflation Reduction Act will help mitigate rising health care costs for many Vermonters, especially those on Medicare and who purchase health plans on the Vermont Health Insurance Marketplace. The bill is expected to be signed into federal law by the president this week.

“The pandemic and inflation have stressed the health care system and increased the cost of care,” said Governor Scott. “While this federal legislation will help us combat these rising costs, my administration is also committed to working with the Legislature and health care providers to stabilize the system, make cost increases affordable and sustainable, and reduce percent of Vermonters’ income spent on health care so they can get ahead.”

The law also includes key initiatives to control rising prescription drug costs, which will limit out-of-pocket costs for Vermonters.

Starting in 2025Vermonters who are on Medicare – including most Vermont seniors over the age of 65 – will pay no more than $2,000 per year for prescription drugs. Starting in 2023they will pay no more than $35 a month for insulin, a drug used to treat diabetes.

In addition, Vermont residents who are covered by Medicare or Medicaid can receive all recommended adult vaccines for free beginning of next year.

“This federal legislation will help seniors afford the prescriptions vital to their health and well-being and will increase subsidies for Vermonters of all ages who purchase insurance plans through the Vermont Health Insurance Marketplace.” This should offset most of the recently announced premium increases, which will help stabilize our health care system,” Governor Scott added.

Young adults are traditionally the most likely to be uninsured, often due to their risk tolerance and insurance costs. The Vermont Household Health Insurance Survey estimates that the number of uninsured Vermonters ages 25-34 decreased by 10% from fall 2018 to fall 2021, due in part to additional federal dollars that lower the cost of insurance for Vermont residents. The law extends those federal dollars to help eligible Vermonters pay health insurance premiums through 2025.

The subsidies currently help about 23,550 Vermonters who buy insurance through Vermont’s health insurance marketplace, Vermont Health Connect. According to a September 2021 report from the Center for Consumer Information and Insurance Oversight, Vermonters saved nearly three times the national average through premium assistance. Vermonters who signed up in the first year the subsidies were available saw their premiums drop by $186 per month, or 62%.

“We can be proud that Vermont has among the highest levels of insured people in the nation,” said Jenny Samuelson, secretary of the Vermont Agency for Human Services. “It is vital that Vermonters maintain their health coverage as we work to stabilize our health care system, a top priority as we emerge from the pandemic.”

“In partnership with other states, Vermont called on Congress to extend the subsidies beyond their current scheduled expiration at the end of this year to help Vermonters continue to afford health insurance,” said Andrea De La Brewer, commissioner of the Department of Vermont Health Access. “Affordable health care premiums are a cornerstone of health care access.”

These grants have already contributed more than $30 million to lower health insurance premiums for Vermonters across a wide range of income levels. For example, an individual earning $25,000 may have the entire premium subsidized. Families with higher incomes can get 80% off their plan.


The Inflation Reduction Act (HR 5376), passed by Congress and expected to be signed by President Biden this week, includes a series of measures aimed at reducing cost pressures on Americans, including through prescription drug reform, health care subsidies, tax credits and credits for energy costs, and more. Click here to see more details at

08/15/2022 Montpelier, Vt. – Governor

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