Vermont’s aging population has forced the state to grapple with a dwindling network of long‑term‑care facilities. Over the last two decades, the number of nursing‑home beds in the state dropped by roughly 900, leaving 33 facilities with about 2,847 beds as of July 2025. To keep these remaining homes afloat, the state tapped Medicaid dollars for what officials call “extraordinary financial relief” (EFR), a program that has poured about $38 million into the sector since 2020.
State health officials argue the bailouts are essential. “We don’t want EFR to be a standard option,” said Helen Labun, executive director of the Vermont Health Care Association. “It really is meant to be an extraordinary measure.” The Department of Disabilities, Aging and Independent Living (DAIL) oversees the program, reviewing each facility’s request and ensuring the funds are used only for operating costs—not for penalties or excessive owner‑administrator fees.
One of the primary drivers of the financial strain is staffing. Contract and traveling‑nurse employees make up about 31 % of payroll in Vermont’s nursing homes, according to a 2024 analysis by the Long‑Term Care Community Coalition. That figure far exceeds the national average of 8 % and reflects the state’s reliance on higher‑cost temporary staff to fill gaps left by permanent‑staff turnover.
Legislators are skeptical that EFR can continue indefinitely. “One could argue that without that help, many facilities would have gone out of business,” said Senator Richard Westman, R‑Lamoille, a member of the Senate Appropriations Committee. While the emergency aid has staved off closures, Westman and other lawmakers are pushing for upstream solutions, such as higher Medicaid reimbursement rates and investments in the nursing workforce.
In the 2025 fiscal year, Vermont allocated $500,000 toward recruiting and retaining licensed nursing assistants—a modest investment compared with the multi‑million‑dollar bailouts. State officials hope the increased funding and a recent rebasing of Medicaid rates—using 2023 cost data rather than the older 2020 figures—will reduce future reliance on EFR. However, as long as contract‑staff costs remain high, the financial gap is likely to persist.
The program’s oversight mechanisms require facilities to demonstrate a lack of alternative funding sources before receiving aid, and the Department of Disabilities, Aging and Independent Living reports that it has recouped every advance made to nursing homes. Nonetheless, critics warn that the continued use of extraordinary relief masks deeper systemic issues, such as inadequate staffing models and outdated reimbursement structures, that threaten the long‑term viability of Vermont’s elder‑care system.