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A look at Vermont’s single-payer system

By admin | September 16, 2014

BY NATHAN SOLHEIM

September 15, 2014

It’s true the Patient Protection and Affordable Care Act expanded health care choices and extended coverage to people across the United States. The mandate, the subsidies, the federal and state exchanges and various other aspects ofthe law have opened up a number of pathways to health care.

But PPACA didn’t go far enough for people in Vermont. The Green Mountain State in 2011 decided to initiate the construction of a single-payer system. In a single-payer system, the government pays all health care costs on behalf of its citizens and private insurance companies go the way of the dodo. A number of countries, including Canada, have single-payer systems, and proponents say that single-payer provides better results than the U.S. system — a patchwork of big government programs, private insurance and community-based systems. (Thanks to PPACA, you have to throw accountable care organizations into the American mix, too.)

But observers across the country are eyeing Vermont’s effort to see how it works out. Vermont’s system was profiled in a recent USA Today article that noted the state’s implementation of a single-payer system could spread to nationwide much the way single-payer grew in Canada, where it began in one of the prairie provinces and engulfed the rest of the Great White North.

“We could be the Saskatchewan of America,” Bram Kleppner, a Vermont business executive, told USA Today in its Aug. 7 story. Kleppner’s organization, Vermont Businesses for Social Responsibility, has actively advocated for the single-payer system for some time.

Vermont initially adopted the move to single-payer in 2011 after Gov. Peter Shumlin made it a centerpiece of his campaign for the state’s highest office. Since then, state administrators have been working to implement the universal system. To come into compliance with Obamacare, though, the state had to build a state exchange — Vermont Health Connect — with two carriers: Blue Cross Blue Shield of Vermont and MVP Health Care.

The single-payer system, scheduled to launch in 2017 under the name Green Mountain Care, aims to improve Vermont residents’ health and contain costs, and make health insurance available to everyone. According to the Green Mountain Care website, the state is evaluating three payment models:

There still will be very limited choice under Vermont’s single-payer system. People on Medicare and Medicaid will be able to remain with those federal programs. Veterans of the military and active-duty soldiers also will be able to continue using the Veterans Administration and military health care options.

Some other plans also would continue, including health care plans serving employees and retirees of out-of-state companies, tourists and other visitors. Plus, there are major businesses in the state that could continue to self-insure if they’re exempted from the new taxes that almost certainly will be enacted to finance the state-run system.

A major point of debate is whether single-payer would actually lower costs. It’s been estimated Vermont will have to raise tax revenues by around $1.6 billion to pay for the system. However, several studies have looked into the question, and a study from the University of Massachusetts Medical School showed Vermont would save about $281 million by implementing single-payer over a three-year period from 2017–19.

Vermont’s single-payer plan hasn’t been without opposition.

While polls show a majority of residents favor the system, there’s a coordinated effort to oppose it. One of the most vocal of these groups is Vermonters for Health Care Freedom, an organization of individuals and businesses who, according to the group’s website, “are deeply concerned about health care reforms being implemented by the Shumlin Administration. The Vermont Legislature has enacted legislation that eliminates Vermont’s free-market system and replaces it with a government-monopoly single-payer system that nearly all Vermont residents will be required to join. This so called ‘Green Mountain Care’ will be funded by new payroll tax and/or additional income taxes or other newly created taxes. In plain English: it will result in the largest tax increase in Vermont history.”

But Shumlin remains convinced the systemic changes and financial shifts that will be Green Mountain Care will benefit all Vermonters.

In a speech to Vermont Businesses for Social Responsibility in May, he said, “When we all pay based on our ability to pay; I guarantee you, that combined with an affordable, quality system that delivers better outcomes for less money, then we all win.”

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