Imagine a state where the population is aging faster than almost anywhere else in the U.S., yet essential care facilities are vanishing right before our eyes. That's the stark reality in Vermont, where millions in government funds have been poured into keeping nursing homes from collapsing. But here's where it gets controversial: Are these bailouts a lifeline for vulnerable seniors, or just a band-aid on a deeper wound? Stick around, because this story dives into the heart of elder care in the Green Mountain State, revealing twists that might just surprise you.
Vermont boasts the second-oldest population in the nation, according to a factsheet from Health Vermont. With more retirees calling it home, the demand for quality long-term care is sky-high. Unfortunately, the state's nursing home capacity has been shrinking alarmingly—nearly 900 beds have disappeared over the past two decades. This decline threatens to leave many elderly residents without the intensive support they need, from round-the-clock medical attention to assistance with daily living tasks.
To stave off disaster, Vermont has dipped into state and federal Medicaid funds, doling out about $38 million over the last five years for what officials call 'extraordinary financial relief.' This program, which hadn't drawn much public spotlight until now, helps struggling facilities stay open. Records from VTDigger show that lawmakers are now scrutinizing it closely, demanding detailed reports and payment histories from state officials.
From the perspective of Vermont's health leaders, these nursing homes are indispensable pillars of the eldercare system. Without this financial boost, they argue, even more beds would have vanished, exacerbating the crisis. But here's the part most people miss: While bailouts provide quick fixes, efforts to tackle root causes—like the heavy dependence on temporary staff—have been significantly underfunded. It's like treating symptoms without curing the illness.
Take staffing, for instance. Roughly half of the requests for extra funds since 2020 cite soaring costs tied to hiring help, especially through contracts. In nursing homes, labor expenses—covering both full-time employees and contractors—account for about 50% of the budget, per state data. Vermont leans on traveling nurses more than any other state, as evidenced by federal stats from the Centers for Medicare and Medicaid Services. This reliance can drive up costs, as contract workers often command higher wages to fill in the gaps.
Helen Labun, executive director of the Vermont Health Care Association, acknowledges that while extraordinary financial relief isn't a long-term solution, it was necessary. 'We needed something,' she explains, emphasizing that it's designed as a rare measure, not a regular crutch. 'We don’t want EFR to be a standard option,' she adds.
Dive deeper, and you'll find this program has roots stretching back over 20 years, but it only became a recurring savior during the COVID-19 pandemic. It navigates a maze of departments under Vermont's Agency of Human Services. The Department of Vermont Health Access handles reviews, setting Medicaid rates for nursing homes, while funds flow from the Department of Disabilities, Aging, and Independent Living (DAIL), as noted by Commissioner Jill Bowen.
Qualifying facilities offer the highest level of care, catering to individuals whose needs exceed those met by assisted living or smaller residential homes. Crucially, they must accept Medicaid patients to be eligible. As of July, Vermont has 33 such nursing homes with around 2,847 beds—a drop from previous years. Bowen expresses concern about this trend amid the state's aging demographics, though she notes some might opt for home-based care instead.
Angela Smith-Dieng from DAIL's Adult Services Division stresses that preserving options for the elderly is paramount, making extraordinary financial relief a key tool against closures. One key driver of funding requests is 'rebasing,' a process that adjusts Medicaid rates based on past cost data. For beginners, think of it like recalibrating a scale: Recent rebases in 2023 and 2025 used older data that didn't account for pandemic-induced spikes in expenses. The latest adjustment in July, drawing from 2023 data, might reduce future needs for bailouts, Bowen hopes. And this is the part most people miss: Changes to how facilities are compensated based on occupancy have eased penalties for low occupancy rates, helping them stay afloat.
In urgent cases, the state has even fronted money or provided more than requested to prevent payroll shortfalls. But typically, they approve less than asked, and every advance is eventually repaid. As part of the review, officials like Jaime Mooney from the rate-setting division pore over finances and compliance. They check for issues like unpaid bills or low cash reserves, and consult on care quality—though denials for that reason are rare. Funds come with strings: No using them for fines or excessive executive pay. Recipients must also submit ongoing financial updates.
Labun points out that owners must show they've exhausted other resources, preventing big chains from diverting funds elsewhere and then seeking state help. Pre-pandemic, facilities often had reserves, but COVID drained those, prompting EFR's adaptation as an emergency response.
Once a tool for isolated cash crunches, extraordinary financial relief now combats ongoing pressures, especially from staffing costs. Contract workers, who can cost twice as much as permanent ones, fuel this strain. While Vermont's use of such staff has dipped slightly, per CMS data, it's still far above the national norm. Labun calls Vermont an 'outlier state' in this regard.
Nationally, temporary staffing surged during COVID but has since normalized—except in Vermont, where it's entrenched. The Long Term Care Community Coalition's analysis of Medicaid data reveals Vermont's contract staff rate hit 31% in early 2024, versus a national average of 8%. Richard Mollot, the coalition's executive director, links this to high turnover from poor conditions like safety risks or inadequate pay.
Staffing dominates expenses, and contracts often lock facilities into higher pay rates, leaving little for permanent hires, explains Kaili Kuiper from Vermont Legal Aid. This creates a vicious loop: Budgets bleed on temps, hindering investments in stable teams. And this is where it gets controversial—does this cycle compromise care? Kuiper notes issues like delayed responses and hygiene problems in understaffed homes, as detailed in a recent VTDigger piece on troubled facilities.
Demographic shifts amplify the problem, Labun says, with an aging population straining the workforce. In response, the legislature has invested in solutions, allocating $500,000 this fiscal year to recruit and retain licensed nursing assistants. Senator Richard Westman, a Republican from Lamoille and hospital board member, sees this as targeting origins of financial woes. Plans also include tapping federal funds from the Civil Monetary Penalty Reinvestment Program, delayed by past administrations.
Yet, these investments pale compared to bailout sums. Westman argues it's pragmatic, given fragility—about two-thirds of homes sought relief in recent years. 'Without that help, they probably would have gone out of business,' he says. Echoing others, he urges better staffing strategies and higher reimbursements to wean facilities off emergency funds.
Kuiper views temporary staff as a stopgap, preferable to shortages, but dreams of phasing them out for permanent roles. As an advocate, she pushes for systemic change to make stability the norm.
Former VTDigger reporter Peter D’Auria contributed to this reporting.
So, is pouring money into bailouts the right move for Vermont's elder care, or does it mask failures in workforce planning and funding? And this is the part most people miss: Could prioritizing sustainable staffing reforms actually improve care quality and save taxpayer dollars in the long run? What do you think—should states like Vermont keep propping up nursing homes this way, or pivot to bolder upstream fixes? Share your views in the comments; let's spark a conversation on balancing compassion with practicality!
