Shumlin’s commitment to single payer health care questioned

When Gov. Peter Shumlin signed Act 48 into law in 2011, he set Vermont on a path toward a single payer health care system.

Peter Shumlin signed the historic health care reform act on the Statehouse steps on Thursday. VTD/Taylor Dobbs.

Peter Shumlin signed the historic health care reform act on the Statehouse steps on May 26, 2011. Photo by Taylor Dobbs/VTDigger.

Two years later, lawmakers on both sides of the political aisle are questioning his sincerity. And a strategy to draw up a financing plan for a single payer system is nowhere in sight.

Act 48 required Shumlin’s Secretary of Administration Jeb Spaulding to submit a recommendation for the “amounts and necessary mechanisms to finance Green Mountain Care,” the publicly funded plan, by Jan. 15, 2013.

On Jan. 24, the so-called financing plan arrived on legislators’ desks. While it provided an amount to be raised of roughly $1.6 billion, the document did not include the “necessary mechanisms” to raise those dollars.

Republicans criticized the administration, arguing that it failed to comply with state statute. The administration argued that Congress would not allow for a waiver to deviate from the Affordable Care Act until 2017. Only then could the state implement a single payer system, and officials said they didn’t want to make hasty decisions. With the extra time cushion, the administration urged lawmakers to focus on implementing Vermont Health Connect, which will become the sole health insurance marketplace for an estimated 118,000 Vermonters in 2014.

In February, the administration called on lawmakers to create a nine-member committee to decide how taxpayers should finance a single payer system.

The General Assembly did not heed the call.

“The committee language didn’t make it into a bill in the end game,” said Robin Lunge, Shumlin’s director of Health Care Reform. “That means we actually haven’t made a plan for how we’ll proceed.”

While there was strong support for Shumlin’s proposal in the House, it never gained traction in the Senate. As negotiations between the two bodies accelerated into the final hours of the session last Tuesday, House Speaker Shap Smith said that there were other matters that took precedent.

“I hope that it doesn’t end up being a mistake,” Smith said.

Sen. Claire Ayer, D-Addison, chairs the Senate Health and Welfare Committee. She said she was the only member of her committee who was in favor of the proposal.

“When it was pitched to the leadership of the Senate, the response was muted at best,” she added.

Sen. Jane Kitchel. VTD/Josh Larkin

Sen. Jane Kitchel. Photo by Josh Larkin/VTDigger

Sen. Jane Kitchel, D-Caledonia, said her Senate Appropriations Committee was cool to the idea because Shumlin wanted $50,000 for more analysis, and the state had already paid out $300,000 to the University of Massachusetts for the first “plan,” which also included analysis for the insurance exchange.

Sen. Anthony Pollina, P-Washington, is a strong supporter of single payer, but he was not keen on Shumlin’s proposal.

“I thought it was a strategic move on his part to shift the responsibility onto legislators when it is in fact the administration’s responsibility to come up with a financing plan,” Pollina said. “It would have given the administration the ability to reject the plan and blame it on legislators for not coming up with a good financing plan.”

The committee would have been comprised of two members from each legislative body as well as two officials from the administration, and the governor and legislative leadership would have chosen the remaining three members.

Questioning the governor’s motives

Shumlin rejects all notions that he is anything less than sincere when it comes to implementing the nation’s first single payer system.

“I am the governor who is committed to passing the first sensible single payer system in America, where health care is a right and not a privilege,” he said in an interview on Tuesday. “We’re going to get it done, and the best financing plan will be one where you pay based on your ability to pay.

“We’re going to be working together with the Legislature — with Democrats, Republicans, independents and Progressives — to develop that financing plan to be ready to be passed at the beginning of the next biennium,” Shumlin added.

But not all lawmakers are on the same page as Shumlin.

Sen. Joe Benning, R-Caledonia, is the Senate minority leader. He equates this undertaking to that of mustering troops and raising capital for the Civil War in 1861. But with Vermont’s aging population, he expects Vermonters to pay much more than $1.6 billion to finance a single payer system.

“I’m beginning to question whether this is something that can actually be accomplished,” he said. “That’s why we have not seen any kind of financing plan out there and probably won’t until they either make a formal decision it’s not going to happen or they’re satisfied they’ve played out the politics of it long enough. … I’m very frustrated we have not gotten answers to the most basic of questions.”

Many of those in favor of a single payer system are frustrated, too. Progressive Party leaders and lawmakers — who take the stance that Vermonters would pay less in taxes than they do in premiums — voiced concern this week that the Shumlin administration is showing signs that it won’t follow through.

This past legislative session, the governor held his line hard on “no new broad-based taxes,” and he brushed aside the Legislature’s recommended reforms to the state’s income tax code — changes that were aimed at raising taxes on the wealthiest Vermonters and lowering taxes on an estimated 200,000 middle class taxpayers.

Sen. Anthony Pollina. VTD/Josh Larkin

Sen. Anthony Pollina. Photo by Josh Larkin/VTDigger

“The question is: Are we putting off raising revenue to wait for health care reform or is the administration unwilling to raise revenue for any purpose whatsoever?” Pollina asked.

Right now, he said, it appears the latter policy is prevailing.

“This past session, the clearest example would be the unwillingness to raise the relatively small amount of revenue that would have been necessary to hold harmless those people moving from Catamount to the exchange,” Pollina said.

The Shumlin administration set aside $4.5 million in fiscal year 2014 for health insurance subsidies to aid lower income working Vermonters, many of whom are currently enrolled on the state-subsidized Catamount and VHAP programs. The aim was to cushion the blow of rising health care costs associated with the state’s new health insurance marketplace and the Affordable Care Act, or Obamacare.

When the feds refused to match part of the proposed subsidies, the administration held the state allocation at $4.5 million and decided not to make up the difference from its first proposal. The Legislature then followed suit.

“The governor showed that it wasn’t a priority because he was not willing to allocate the money even if it could be raised in a way that was revenue neutral,” Pollina said.

Rep. Chris Pearson, P-Burlington, sits on the House Health Care Committee. He shares Pollina’s concerns about low-income subsidies.

“For many people, this is phase one of the reform efforts,” he said of the exchange. “I worry that we’re not doing enough to give them confidence in the work we’re doing. The most basic way people are going to interact with our health care system is by going to the hospital and paying the bill, and we made it harder (for some people) to pay the bill.”

Pearson did acknowledge that this legislative session, from a health care standpoint, was more focused on policymaking for the health care exchange than it was preparing for a single payer system in 2017.

“This is not to say, ‘Let’s trust these guys. They’re doing great work,’” he said. “It is to say, ‘We should be worried, but they are doing a heck of a lot around health care, and we need to push them to make sure they take it all the way.’”

Middlebury College professor Ellen Oxfeld was a founding member of Vermont’s Progressive Party and is a leading advocate of a single payer system. She was a strong supporter of Shumlin’s initial bid for governor, advocating in 2010 that he could deliver universal health care.

She said the administration must now focus on creating a financing plan.

“Even though I don’t agree with their approach to taxes this session, I can’t say whether it has anything to do with single payer because the singlepayer tax is replacing a premium with a tax,” Oxfeld said. “Is the Shumlin administration’s approach to taxation this session indicative of its resolve to follow through on single payer? I hope not.”

Updated at 8:37 a.m. on May 21, 2013 with a quote from Ellen Oxfeld clarifying her stance.

Andrew Stein

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50 Comments on "Shumlin’s commitment to single payer health care questioned"

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sandra bettis
3 years 2 months ago

single payer?? partnering with bcbs is not single payer! forcing people to buy ins from an ins co is not single payer! does mr shumlin know what single payer is???

Lee Stirling
3 years 2 months ago

No, it isn’t single payer…it’s call the the health information exchange, where people can buy insurance beginning in October 2013. Single Payer supposedly is slated to be in-effect in 2017.

Ellen Oxfeld
3 years 2 months ago
I would like to add something to the quote which is attributed to me in the article above. It does not clearly represent what I was trying to convey at all. The point I was trying to get across is that the issue of taxation this session (whether one agreed or disagreed with the Shumlin administration) is a different issue than taxation for single payer. The reason is that taxation for single payer will be in lieu of premiums and is therefore not adding additional costs for Vermonters. In fact, all the studies show that we will have to raise… Read more »
3 years 2 months ago
On April 11, 2013, I wrote a vtdigger opinion piece on the Governor’s health care initiative that stated: “The governor must come forward with a comprehensive and straightforward report to the people of Vermont on the status of his health care initiative. Emphasis should be on the real prospects of achieving a single payer system, how low-income Vermonters will be served and how medical services are going to be affected as a result of health care expenditure cutting.” It appears that others are now asking the similar questions, so it’s appropriate to ask the Governor again to come forward and… Read more »
sandra bettis
3 years 2 months ago

thank you – you explained the funding perfectly. the other part is that you cannot have for profit (and that includes bcbs) ins cos involved. mr shumlin seems quite attached to them for some reason….

Walter Carpenter
3 years 2 months ago

“single payer?? partnering with bcbs is not single payer! forcing people to buy ins from an ins co is not single payer! does mr shumlin know what single payer is???”

Are you referring to the ACA? That definitely is not single-payer.

3 years 2 months ago

If Shumlin can’t convince Progressives he’s committed to single payer, they may run someone for governor in 2014. That was part of the deal they made with him to not run a gubernatorial candidate in ’10 and ’12.

3 years 2 months ago
Kudoes to Andrew Stein for a very well done report on this troubling issue. Leaving aside my own bias, I simply can’t imagine how single payer can be made to work in a little state like Vermont, with the talent and revenue base available to us, especially when ObamaCare will likely be disintegrating nationally. Two years ago EAI put out an updated one-pager titled Ten Hard Questions About Single Payer Health Care. Shumlin & Co. still haven’t produced believable answers to nine of them. This February Shumlin wangled an astonishing $45 million Federal grant to figure out how to do… Read more »
Wendy Wilton
3 years 2 months ago
Andrew, your articles on health care have been well-written. Kudos to the legislature for recognizing that the financing plan is a responsibility of the administration as required in Act 48. Unfortunately, they also failed to press Shumlin on this and demand the plan as prescribed by the law they passed (and he signed into law). Having said that, you don’t need to be Einstein to figure out that a likely financing plan for single payer would be a doubling of the income tax revenue and the creation of a payroll tax at a level of 15% of gross payroll, in… Read more »
Ann Meade
3 years 2 months ago

Wendy, you clearly still do not understand the job of the Treasurer. Quit being a poor loser.

Karl Riemer
3 years 2 months ago

No, no, no! A poor loser is much the best we can hope for. Imagine this whirlwind of hyperventilation, invention and emotion in a winner.

Wendy Wilton
3 years 2 months ago
Ann, I absolutely understand the job of treasurer. It’s the job I do every day for the City of Rutland for the last 6 years. As an elected official the Treasurer should be looking out for the state’s financial well-being because you owe that to the voters. This is very different from a financial manager who is hired to keep the books without any fiduciary duty to the electorate. The City of Rutland experienced a $5 million deficit in 2006 because no one was minding the finances as a treasurer should. That deficit occurred very quickly–in a matter of 3… Read more »
Peter Liston
3 years 2 months ago

Sour grapes much?

Wendy Wilton
3 years 2 months ago

No sour grapes here–but it sure sounds like those of you who don’t agree with my financial assessment sure are w(h)ining!
I just wish all of our elected officials, including the Treasurer, would reflect on this fiscal issue and do the job they were elected to do. It is the future of the state that is at stake.

Phyllis North
3 years 2 months ago

As someone who knows very little about health care finance, I must admit I am nervous about where this Vermont plan is going. Why do we always have to be first? What if things go wrong? Isn’t this really something the federal government should be doing?

Chris Lewis
3 years 2 months ago

Ms. North,
There are a lot of someones who know a whole lot about health care finance and they are nervous about where this Vermont plan is heading as well.

Ellen Oxfeld
3 years 2 months ago
I would like to add that Act 48 is already law and it sets out a roadmap to a publicly funded health care system for all Vermonters as soon as allowed by federal law, which is 2017. As advocates for single payer we need to continue to point out why it will create a more efficient and cost effective health care system, and is also the only way to attain true universality. We need to remember that we already paying for all our health care in one way or another Single payer is simply a much more efficient way of… Read more »
3 years 2 months ago
Ellen: When I hear someone say “taxes for single payer will replace premiums,” I have to ask: “What premiums are you talking about?” Self-funded insurers like IBM have already been written out of the equation, along with veterans and those on government sponsored programs. Just how many of our citizens paying premiums are left to fund this conservatively-estimated 1.6 billion dollar projected cost? When I hear someone say “look at other countries with publicly funded systems” I shake my head in wonder. Vermont is not a country; it is a state with a limited population. That population is aging, meaning… Read more »
Ellen Oxfeld
3 years 2 months ago
I think there is some confusion about ERISA here: In fact, there is no legal barrier to participation of all Vermont employers in a single payer plan. The top ERISA experts in the country have long pointed out that ERISA law does not prevent a state from levying a payroll tax to help finance a state’s health care infrastructure and services. As such a tax would cover health care, it is likely that many employers would choose to forego premiums, although that choice is entirely up to them. Large employers are likely to do better paying a payroll tax than… Read more »
Jim Christiansen
3 years 2 months ago

A payroll tax is not a fair and equitable measure of ones ability to pay. Fair and equitable demands that funding for single payer must be based on total accumulated wealth.

Jim Christiansen
3 years 2 months ago

Alas, Vermont is not a country, but a very small state with an airport and boarders open to 300+ million US citizens.

There is no realistic method to restrict single payer coverage to just citizens of Vermont. No plan has been put forward to prevent future migration of the sick to Vermont for free care. Any proposal to restrict health benefits will be deemed an abuse of human rights, as both the Governor and the Legislature campaigned championed single payer as a human right.

Bonnie MacBrien
3 years 2 months ago
Ms. Wilton – You state ” The state labor force lost 2,000 jobs in one year, which is why our unemployment numbers are low.”. I am definitely not Einstein, so you’ll have to explain to me how losing 2000 jobs in one year makes unemployment low. I would think it adds to unemployment. I’m also not sure where you get your math to make the claim “likely financing plan for single payer would be a doubling of the income tax revenue and the creation of a payroll tax at a level of 15% of gross payroll.” That statement sounds like… Read more »
Karl Riemer
3 years 2 months ago

Now, be fair. We all have jobs to do. Wendy Wilton is doing hers. You’ve accurately characterized it: spit out reams of blithering nonsense lathered with indignation and a dash of spite, leavened with an occasional self-congratulatory huzzah! It’s a difficult, thankless task but she sticks with it through thick and thin.

Jim Christiansen
3 years 2 months ago

Personal attacks are hateful and intended solely to defeat civil discussion of this, or any other topic.

I wish VT Digger would remove the personal attacks, lest this site turn into the GMD blog.

3 years 2 months ago

Hi Jim,
Wendy is a public figure and subject to criticism.
Anne

Jim Christiansen
3 years 2 months ago

Criticism of ideas, yes, I agree. Personal attacks that do nothing to further the discussion, no, we should expect better of VT Digger.

Wendy Wilton
3 years 2 months ago

Bonnie, Here’s the essential article in VT Business Magazine about the drop in jobs and the unemployed at the same time:
http://vermontbiz.com/news/may/vermont-unemployment-rate-drops-40-percent-april
My math on what the taxes to fund single payer can be found in the UMass report presented to the legislature. Not hard to figure out.
I stand behind my comments about Ms. Pearce. She got elected, now it’s time for her to show she’s looking out for us as an elected Treasurer should do.

Fred Woogmaster
3 years 2 months ago

Mr. Herrick: As a non-member of the “two party” system, I like third parties of many persuasions. Given the tenor of this legislative session and of the Governor’s elitist positions, if the Progressives do NOT challenge him they may lose whatever credibility they have left.
I have been impressed with the way Progressives have conducted themselves in the Legislature, Senator Pollina especially. At this point, I am not inclined to vote for Governor Shumlin again.

Fred Woogmaster
3 years 2 months ago
Senator Sanders held a town meeting at Montpelier High School on Sunday as he had done in Burlington and Brattleboro the day before. The Ambassador from Denmark, who has spent many years in the U.S, was his guest and speaker. If American arrogance prevents us from learning from their health care system (and others like it)- what a shame. The information the Ambassador provided, not just in health care, was extremely impressive. They have a system that intertwines capitalistic and socialistic principles for the “community good”. The greed associated with unbridled capitalism in our country is stifled systemically in Denmark;… Read more »
Peter Everett
3 years 2 months ago
Denmark population: 5.57 million USA population: 330+ million. More than double Denmark’s population are Illegal (undocumented if you’re one of the beautiful PC type) 360 companies in Denmark went bankrupt last year. There is poverty in Denmark. Unemployment is less in Denmark, right now. We cannot compare the two countries, one is small, one very large. One does NOT have the diversity that the other has. Not everything is as it seems. Yes, Denmark is, supposedly, the “Happiest” country. Maybe, our “happiest”, are also the one’s who live off the productive in our society. Think this could be the case.… Read more »
3 years 2 months ago
“Self-funded insurers like IBM have already been written out of the equation.” (Sen. Joe Benning) Self- insured companies like IBM represent hidden premiums that it’s employees pay in the form of lower salaries, less paid vacation days etc, not to mentioned being handcuffed to the employer for fear of losing health benefits. A universal health care plan such as single payer will liberate those employees from the stress of job lock and allow them to move on to more a satisfying job or become self employed if they so wish. P.S. The exchanges that we have to put up with… Read more »
Lance Hagen
3 years 2 months ago
Jerry, what the heck are you talking about? A person that works for a self-insured company is not required to use that company’s health insurance plan. Many people I know, that work for such companies, use the health insurance programs of their spouses. Or they can even go to the open market and buy health insurance, if they see fit. So, single payer will NOT liberate those employees from the stress of job lock and allow them to move on to more a satisfying job or become self employed if they so wish. If the single payer plan is better… Read more »
Walter Carpenter
3 years 2 months ago

“Many people I know, that work for such companies, use the health insurance programs of their spouses. ”

And the premiums of their spouses inevitably go up because of it. But you have pointed out yet another huge flaw in our non-system. Yet, with single-payer, both partners will be under the same insurance, the same coverage, rates, etc. so there is no need for the one spouse or the other to depend on the spouse’s insurance. And with single-payer, there should be no need for companies to self-insure.

Lance Hagen
3 years 2 months ago

And if a person is not satisfied with the insurance plan provided by the state under single-payer, what options do they have ……… none. There is one plan and we are all mandated to take it. Talk about being enslaved by an insurance plan!

sandra bettis
3 years 2 months ago

there would be no premiums, no copays and no deductibles and everyone would be covered – no more worries – what’s not to like??

Lance Hagen
3 years 2 months ago

It going to cost $1.6 to $1.9 billion/year for all that ‘free’ stuff (no premiums, no copays and no deductibles) at service provider rates only 5% above Medicare rates.

So if such a plan is so likeable, it should be easy to define a funding mechanism to cover the cost of $1.6 to $1.9 billion/year

sandra bettis
3 years 2 months ago

lance – yes, it is easy – income taxes – equitable for all and much cheaper than the premiums we are paying to for profit ins cos! ins cos that, i might add, are deciding our fates based on their bottom line.

Lance Hagen
3 years 2 months ago
Sandra, maybe you should study the numbers in the report from UMass (tables 7 and 8). If you evenly distribute the $1.6B to $1.9B over the number of people covered under GMC single-payer plan, for a family of 4, this amounts to a tax of $13,600 to $18,800 per year. Now, since ~30% of the Vermont population was previously uninsured or on Medicaid and is unlikely they can afford such a high tax. So assuming that these people will cover 10% of the yearly cost and the remaining 90% of cost is covered by the 70% of the remaining population,… Read more »
Sen. Joe Benning
3 years 2 months ago
Jerry, I agree with your observation regarding health care being disconnected from employment. It is a laudable goal. But I submit you missed my point. The issue is how to pay for a new system conservatively estimated to cost at least 1.6 billion dollars. If IBM-type insured employees, veterans and government-supported insured are not contributing to the pool of taxes/premiums necessary to fund that system, those of us who remain must obviously pick up the slack with higher premiums and/or taxes. Since neither you nor I know what the funding plan is, we’re both in the dark about a new… Read more »
Dave Bellini
3 years 2 months ago
It’s the same old problems: No details, incomplete analysis and reality deferment. Apparently ignorance really is bliss. There isn’t going to be true single payer as self-insured plans and some government plans won’t be included. All the state is really doing (or rather not) is setting up a self-insured plan for a large group of people. It’s not rocket science and it doesn’t have to take years to decide on plan design, cost it out and set the premiums. But then everyone would know exactly what they were getting and how much it would cost them. The players don’t want… Read more »
Walter Carpenter
3 years 2 months ago
“The issue is how to pay for a new system conservatively estimated to cost at least 1.6 billion dollars.” Sen. Benning, I believe that the money is already there. All we have to do is re-channel it. Vermont spends about 5 billion annually now (probably more) on health care and we still cannot insure all of our citizens and thousands more are so inadequately covered that they cannot use the insurance anyway without a financial calamity on par or worse than their medical calamity. Even with the erissa stuff and the fed programs, the money is there. You and I… Read more »
Peter Everett
3 years 2 months ago
I do not know the truth to this, but, here goes anyway. I have heard that for a Single Payer program to work the STATE must receive a waiver from the FEDS that allows all Medicare, Medicaid premiums to go DIRECTLY to the STATE. Without this waiver, Single Payer will not be feasible. Can anyone confirm or deny this as a fact? Like I said, I don’t know the truth, so don’t hold me on this. I, do, have to say, I don’t believe much that Gov’t says anymore. Lying seems to start at the top and works its way… Read more »
Dave Stevens
3 years 2 months ago

Hello Peter, I have heard that remark as well. But like you, I have no idea if there is a shred truth to that. I’m also sad to hear of your distrust concerning government. Trust your state government. Also, I have 20+ acres in east Montpelier for under 40K if your interested? Regards.

3 years 2 months ago
Lance, First of all, if a person who works for a self-insured employer, that person will be paying for it in form of lower salary, vacation days etc. whether or not they use it. You don’t get more money if you decline it. In other words you would be paying twice for health care coverage if you got a private policy.How many can afford that? It makes no sense. Secondly, the private individual plan will have a much larger premium and much larger out of pocket expense which is why self insured companies offer health care as an incentive in… Read more »
Fred Woogmaster
3 years 2 months ago
Mr. Everett: re: Denmark – Although your words and numbers may be correct, it seems to be universally accepted that the Danish people are quite happy, there is little violence, and the pillars of liberty, justice and equality are strong. The wealthy are not as wealthy as wealthy Americans, the poor are not nearly as poor as the poorest Americans, and justice is not determined by wealth – and lawyers do not receive exorbitant fees. The Danish health care system and the quality of medical care I believe to be excellent. I have never been there but I have never… Read more »
martha ramsey
3 years 2 months ago

i am so looking forward to my brand new lo-cost “bronze plan” through my Obamacare-mandated state health exchange, Vermont Health Connect. i see on their website that for only $346/mo., i get so much–a deductible of only $3500, and after that i only have to pay $35 to see my doctor and only $240/mo. for my nongeneric prescription. oh and–only $100 to see a specialist or alternative practitioner. wow! the federally funded “navigators” have really helped me appreciate how lucky i am to be able to “shop” on the exchange and “choose” the plan i “prefer.” thanks barack!

http://healthconnect.vermont.gov/sites/hcexchange/files/Standard%20Plan%20Designs%20and%20Rates.pdf

sandra bettis
3 years 2 months ago

joe, in single payer, we’d all be in the same pool. there would be no separate pool for vets etc – intergration – a wonderful thing!

Sen. Joe Benning
3 years 2 months ago

Sandra, I’d agree with you if that was actually the plan. But that’s not my understanding of the plan.

sandra bettis
3 years 2 months ago

that’s because the ‘plan’ is not single payer. too bad – for all of us.

Brady Hoffman
3 years 1 month ago
A true single payer system would imply the involvement of the federal government in a thus far what has been outlined as a state run program. In essence, Vermont is attempting to implement a modified single-payer within a multi-payer system. While multiple countries have implemented similar reforms,understanding the need for universal access to health services, successfully. Vermont in practice, is attempting to implement universal access within a multi-payer nationally operating health system. Development of such a complex system will take time, money, and a considerable amount of bipartisan effort to create a equitable program. Much of the conversation surrounding the… Read more »
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