State’s share of universal health care? $2 billion, give or take

From left Steve Klein, Michael Costa and Jeb Spaulding. Photo by Morgan True/VTDigger

From left Steve Klein, Michael Costa and Jeb Spaulding. Photo by Morgan True/VTDigger

The move to a publicly financed universal health care system could cost the state from $1.76 billion to $2.17 billion, state officials said Thursday.

Lawmakers received a revised estimate of the cost of Green Mountain Care from a combined team representing the Legislature’s Joint Fiscal Office and the Shumlin administration.The group cautioned that the range could vary “dramatically” based on unresolved policy questions.

“A range is hard to legislate around, and you guys are going to eventually need hard numbers,” Steve Klein, chief financial analyst with the Joint Fiscal Office told lawmakers. “We view this as a step in that process.”

The new range is based on a state-commissioned study of the program’s cost by the University of Massachusetts and the actuarial firm Wakely Consulting Group.

It lands between the hard number given in that study and a higher estimate from the consulting firm Avalere in a study commissioned by providers and business groups.

The new estimate did not revise the UMass study’s total cost of $5.9 billion. Instead, it drilled down into the study’s estimated $1.6 billion in state costs, adjusting it to reflect higher expected implementation costs, lower federal matching and other anticipated revenue changes and costs not included in that study.

Also not part of the estimate is an $89 million shortfall in the state’s Medicaid fund spread out over the next three years, which Klein said the state will need to address regardless of the transition to Green Mountain Care.

“Probably the area where we have the most uncertainty is the implementation startup and transition,” Klein said.

The estimate offers a range of $50 million to $150 million for implementation and transition costs that were not in the UMass study.

Federal medical assistance has dropped since that study as well, adding between $21 million and $36 million, and ongoing technology, consulting and staffing needs could add from $33 million to $45 million, according to the revised estimate.

“There are some ways in which we fund the state Medicaid program that may not make sense in the future,” said Michael Costa, deputy director of health care reform.

It’s not clear how a provider tax would work in a universal publicly financed health care system, he said.

Costa said it’s possible the feds would agree to replace that money, but it’s also possible lawmakers could eliminate the tax, leading them to build a range of zero to $157 million — what that tax generates in a year — into their estimate.

The claims assessment and employer assessment, which currently fill the state’s health care fund, might also be eliminated in the new system.

“If every employer is paying in, having a special employer assessment probably doesn’t make sense,” he said. “If most private insurance claims go away, there’s likely not going to be a claims assessment.”

That builds another $51 million of uncertainty into the equation.

Other sources of revenue would have to be identified in a financing plan to recoup the loss from eliminating those taxes.

There is also the question of whether there needs to be cash reserves for a transition to Green Mountain Care, how much, and where the reserves will come from.

The estimate builds in zero to $125 million, or 5 percent of the state’s overall cost, for a reserve fund.

If the state contracts with a private administrator to operate Green Mountain Care, and it’s decided the system needs reserves, those could be built into the request for bids, Klein said.

There is also the question of what happens to the reserves of insurers in the current system after the transition happens.

“Can you transfer those reserves or somehow make use of them?” Klein said, suggesting that the state could somehow appropriate the reserves of private insurers.

Private insurers couldn’t just spend those down, because their reserve levels are set by the Green Mountain Care Board.

The administration doesn’t have a position on the need for reserves, Costa said.

“In the governor’s view, the more that we can use private administrator services the better,” Administration Secretary Jeb Spaulding said. “The governor does not want to build a whole inside administrative superstructure in state government.”

If the state should need reserves, its largest private insurer Blue Cross Blue Shield of Vermont happens to have roughly $130 million in reserves, for example.

The timing for when revenue needs to be available is also a question mark for legislators.

“People are paying insurance premiums now, individuals and businesses, there’d be a transition to Green Mountain Care, and you wouldn’t want people to pay twice if you can help it,” Costa said. “It’s not yet clear how we would manage that transition,” he added.

When policymakers start to map out the transition to the new system, there may be a need for revenue to increase as the go-live date of January 2017 approaches.

The Joint Fiscal Office and the administration identified several other policy choices they were unable to account for, which will alter the range they gave.

“As you change policy levers the range will change dramatically,” Klein said.

The benefit package that lawmakers settle on, what portion of medical expenses the plans cover, reimbursement rates for providers if certain populations are exempted, and changes in subsidies could all slide the range up or down the cost spectrum.

“This range is not static, we should expect it to change and, hopefully, get narrower,” Spaulding said.

The Joint Fiscal Office and the administration will continue their collaboration to refine these numbers and update them as policy decisions are finalized.

“The more we can work together without, you know, looking like we’re one branch of government … we’d be more than happy to do that,” Spaulding said.

Mike Fisher, D-Lincoln, agreed, saying there will be a “healthy tension” between the Legislature and the administration as the numbers solidify and policy choices become new laws.

Comments

  1. Stan Hopson :

    Add 30% on top of the highest estimate and that’ll be a more accurate number. Couple this information with the new CBO numbers subtracting 2 million plus jobs from the economy and we are heading quickly toward a abyss.

    • John Greenberg :

      You are misquoting CBO’s conclusions. They estimate — based on some assumptions which may well prove questionable — that about 2.5 million workers may choose to withdraw from the workforce, but they also clearly state that there is no effect on employment demand.

      • Jim Barrett :

        How in the World would anyone rebut that over 2 million would be unemployed Sir? That is now a fact and the cost of the farce to every American is shocking…pure and simple. Put a ribbon on it or whatever, but it is going to likely bankrupt us in taxes and debt and the thirst for more taxes at all levels of government may bankrupt the entire country.

    • Richard Ratico :

      Stan,

      The reason single payer is in play is because the existing system sucks. Millions of your fellow citizens are denied health care because of it.

      Please read Paul Krugman’s piece in today’s NYTimes to understand the CBO report. It may in fact be good for the economy.

      http://www.nytimes.com/2014/02/07/opinion/krugman-health-work-lies.html?hp&rref=opinion

      • Brian Keefe :

        Krugman: “Just to be clear, the predicted long-run fall in working hours isn’t entirely a good thing. Workers who choose to spend more time with their families will gain, but they’ll also impose some burden on the rest of society, for example, by paying less in payroll and income taxes.”

        • Richard Ratico :

          Brian,

          Oops! You failed to include Mr Krugman’s entire paragraph:

          “Just to be clear, the predicted long-run fall in working hours isn’t entirely a good thing. Workers who choose to spend more time with their families will gain, but they’ll also impose some burden on the rest of society, for example, by paying less in payroll and income taxes. So there is some cost to Obamacare over and above the insurance subsidies. Any attempt to do the math, however, suggests that we’re talking about fairly minor costs, not the “devastating effects” Mr. Cantor asserted in his next post on Twitter.

        • walter carpenter :

          Workers who choose to spend more time with their families will gain, but they’ll also impose some burden on the rest of society, for example, by paying less in payroll and income taxes.”

          So, using this logic, should we make working people work 80 hours a week instead of 40?

          • Walter,

            They will need to work the extras hours to pay for:

            the new health tax, and

            the new carbon tax for the starry-eyed 90% goal, and

            the increased education tax, and

            the increased gasoline tax, and

            the increased license and registration fees.

            Did I miss anything?

      • Craig Powers :

        Ya..so if you choose to not work…and you are paying less in…someone else has to pay your share…typical Progressive thinking!

        • walter carpenter :

          “so if you choose to not work…and you are paying less in…someone else has to pay your share?

          But, I suppose, it is alright for those who are working in top positions, for example, to make others pay their share as well.

          • Craig Powers :

            Walter,

            Some are paid more based on skills, market conditions, etc. Yes, CEO pay is ridiculous. We can both agree on that. Do you think that someone washing dishes, who is a high school drop out, should be making the same (or close) to someone who went to college out of “fairness”?

    • Jim Barrett :

      Stan , you don’t understand that unemployment is good for the economy as they will spend the money and boost the everything up except for the debt which is already skyrocketing. Obama loves debt (6.6 TRILLION) which is going to climb again because the non business man in the White house couldn’t run a cool aid stand.

      • Bob Goldberg :

        Well, you comments show you clearly love cool aid.

        So I see why this would be the measuring stick of a good leader for you.

        And the deficit has gone down under Obama, not up. Not consistent with someone who “loves debt”.

        • Glenn Thompson :

          Seriously!!!!! Everyone should know the difference between a ‘deficit’ and ‘ the debt’? Jim Barrett mentioned “debt”, you mentioned “deficit”. True, the deficit has gone down under Obama, but it is still a deficit and continues to get added to the debt. Eventually bad things will happen if we don’t start dealing with the ‘debt’!

          • Bob Goldberg :

            Yes, seriously.

            Everyone know the relationship between deficit and debt.

            Someone who “loves debt” would seek to increase the deficit, not decrease it. Anyone who actually considered that for a moment would arrive at the same conclusion.

          • john lawrence :

            Giving this administration credit for reducing the deficit is misleading.This administration raised the annual deficit by 50 to 100 % for the first 4 years in office and only now is proposing to go back to Bush era deficits. Our increase in total debt skyrocketed as a result.

          • Bob Goldberg :

            John,

            Your statement is misleading. The deficits have gone down under Obama, not up.

            http://www.politifact.com/truth-o-meter/statements/2013/jul/25/barack-obama/obama-says-deficit-falling-fastest-rate-60-years/

            http://www.politifact.com/truth-o-meter/statements/2012/oct/05/mitt-romney/mitt-romney-says-barack-obama-has-doubled-deficit/

            Obama inherited a collapsing economy that was losing about 700K jobs per month. As a result, revenues decreased and mostly automatic spending on certain programs went up.

            This is the primary driver of our debt.

          • john lawrence :

            Bob,
            No one is disputing the rate of decline in the annual deficit is historic. The first “truth-o-meter ” report is correct as far as that goes. The second report claims that the doubling claims were based on a starting point of only eight months vs 12 months. If this is correct,and I can’t substantiate it on the CBO site(that might be me however) , even if you add 50% to the Romney amount
            , you are still close to doubling Bushs’ last deficit, which was obscene. Are you sure you want to stick to “automatic spending on certain programs went up ” as the cause of our huge debt?

      • Peter Everett :

        Craig:
        Those in Gov’t believe that the people who have taken the “easier” route (drop out of school, have no skills, etc) are entitled to, at least a six figure income.
        They are able to attain this standard of living by working minimum wage jobs and collecting every entitlement they can.
        Sad part is if you earn $60K you pay taxes on $60K. If you earn $30K and receive $30K in entitlements, you pay taxes on $30K. Therefore, the low end worker has more disposable income that they can spend. Ain’t America great???? What fools the hard workers are. The subsidize the Leisure Class. The US of A is in decline, the slope is getting slippery very fast. I’ll be worm food by the time it happens. Its my children and grandchildren I feel bad for. Often, what followes the collapse of one gov’t is follwed by one that is much more unfair and wicked.

  2. Randal Murray :

    I can’t even believe we are having this conversation, or even thinking of doing anything other than going back to the system that we had. We are broke, the US govt is broke, not one part of the governments involvement in healthcare has worked. Why would we peruse this? If this was the private sector this would have been on the shelf already. If we dug a hole in the ground and threw money in to it we would be helping more than the elected officials we currently have making decisions.

    • Walter Carpenter :

      “We are broke, the US govt is broke, not one part of the governments involvement in healthcare has worked.”

      Tell that to the senior citizens who depend on Medicare or the veterans. Tell that to people who have been able to afford insurance for the first time in their lives under the ACA. Tell that to the Vermont families whose kids are on Dr. Dynasaur. All these are publicly-funded systems which work quite well, much better than private insurance.

  3. Craig Powers :

    $50 million here, $150 million there, or maybe $45 million if this happens…oh no, wait…let’s study it one more time!

    Such clear estimates coming from Montpelier.
    You know what this looks like? It looks just like the current health insurance billing system!

  4. Bob Stannard :

    It must’ve taken great courage for people like Columbus to sail off into the sunset with all those left behind convinced the world was flat.

    • Jeanne Keller :

      Yes, but, it took great personal courage, but Columbus wasn’t taking the entire country of Spain with him… It’s worth being very very careful when the risk is spread this far and wide, yes?

      • Walter Carpenter :

        “Yes, but, it took great personal courage, but Columbus wasn’t taking the entire country of Spain with him… It’s worth being very very careful when the risk is spread this far and wide, yes?”

        Would the risky not be greater if we did nothing and just let the current (pre-aca) system go from $5 billion a year into $10 billion and then some, while excluding more and more Vermonters from accessing health care?

      • Kathy callaghan :

        Very good point, Jeannie!

    • Lance Hagen :

      I wonder if he had the promise of $500 million saving in the first year.

  5. Wendy Wilton :

    Over time, the state’s estimate has now met the cost number I calculated a year ago, confirmed by the Avalere report at $2 billion. Call me shocked.
    Stan Hopson you may be right. We have seen the inoperable VT Health Connect, which will form the portal for single payer, has taken extraordinary amounts of cash to create and the Governor keeps coming back to the legislature and the feds for more dough to fund it.
    Another consideration: Vermont can’t seem to grow jobs, youth are leaving, and our demographic continues to rapidly age. This is hinted to in the UMass report. These trends will increase costs of the system on fewer folks who can pay.
    How will this work?

    • And I’ve still got three years before my prediction of closer to 3 billion is realized. Are you beginning to regret our
      25 cent bet yet Wendy? Time and direction appear to be on my side!

      • Wendy wilton :

        Joe, I agree with you that by the time we get to 2017 it may be $3 billion…and as I recall I gave you back your quarter plus 25 cents!

        If it is a $3 billion gap to be filled in 2017 don’t think Peter Shumlin can’t get $1 billion from DC for a year or two to prop up this financial house of cards. I would argue that the $2 billion, which is now the current estimated amount to be raised in taxes, is a real problem for the state’s economy and the state’s coffers long term. When the federal subsidy dries up, who will foot the bill? If we simply can’t afford it what happens then?

        Green Mountain Care, like TennCare in the 1990′s, will look pretty good for about 3 years. TennCare nearly bankrupted the state of TN in that amount of time, and when TN abruptly ended the program due to lack of money it left thousands of people without health care. Maine had to curtail it’s reform, Dirigo, due to similar problems of lack of funding which resulted in access issues especially in rural areas. Same is likely for VT and the single payer concept will accentuate the cost and access issues.

      • Wendy Wilton Had done the work and figured it would cost over 2 billion. When the Governor was told this he tried to discredit her. Wendy went to Rutland VT and took there yearly Deficit and with-in 3 years had them in the black. I wonder if the Governor is man enough to apologize since Wendy was right all along.

    • Michael Smith :

      The recipe for creating jobs is easy. The State needs to:

      1) value employers – when the State and Vermonters treat business owners like greed mongers, the business owners will leave
      2) create a stable and predictable environment – stop proposing entitlement programs that will bankrupt businesses
      3) provide top notch customer service
      4) remove barriers that block job creation
      5) implement incentives for job creation rather than penalties
      6) stay competitive with other states

      We’ve seen too many statistics lately. It’s time to stop driving by looking in the rear view mirror. It’s time to look forward and recognize that modern mobility means it’s easier and easier for entrepreneurs to move their business out-of-state. I watched the brain drain in Michigan occur 20 years ago. It’s already begun in Vermont and it will not stop until Vermont and Vermonters become pro-business.

  6. sandra bettis :

    how can this be true? this should be paid for from our taxes (in lieu of premiums) and should not cost the state anything.

    • Robert Ryan :

      Well of course. However since we haven’t officially passed any laws to say that it allows all this handwaving to occur and all the chicken littles come out of the woodwork to insist the sky is falling.

  7. MJ FARMER :

    Let’s get rid of insurance totally and go back to a cash system. My grandfather was a doctor and he set fees for service – he also dedicated himself once a week to clinic where the people who could not pay could go for free. The administrative part of health care has grown too big and the billing is much too complicated. I would like to see consistency in pricing with procedures, a hip cost $30,000, a knee $40,ooo, etc. Also, with liability, a death, max $1 million, an eye, maximum $500,000, etc.

  8. Hale Irwin :

    This is all very scary. I am afraid there will be a grand exodus from Vermont by people who will not be able to afford the taxes. It is time to get real!

    • walter carpenter :

      “This is all very scary. I am afraid there will be a grand exodus from Vermont by people who will not be able to afford the taxes. ”

      Perhaps not. Perhaps Vermonters will stay because they do not have to deal with hundreds a month in premiums and thousands a year in deductibles like Vermonters not on the public plans have to do now.

      • Glenn Thompson :

        Walter, younger Vermonters will not stick around unless they have a good paying job to go to. And if my memory serves me correctly, those that do have a good paying job without employer based health insurance still are required to sign up for Vermont Health Care that requires people to pay ‘x’ of $$$/month and a high deductible? Why would they stick around if their overall expenses exceed their ability to pay for them?

        I can tell you from my own observations, a higher % of my son’s generation is heading out of Vermont compared to my generation. I can go into fine detail why that is! What happens if there are more people in lower income brackets that can not be supported by those in the working class or businesses that operate in Vermont without taxing them to death?

        Vermont is not an economic power house, and from my perspective there is no way to make a Single Payer System work here!

      • Wendy wilton :

        Only folks like Walter will make out in this scheme.

        The rest of the state, including the state employees, teachers, municipal workers, nurses and doctors, business owners and their employees, and the state itself will get hosed in the payroll tax. Retirees will get hosed by the new income tax on non-wage income.
        Check out the trial balloon in the new senate bill, s.252:
        http://www.leg.state.vt.us/docs/2014/bills/Intro/S-252.pdf

        Even if the legislature does not take up this bill it gives us all advance notice of what the Governor is likely to propose in 2015 if he’s re-elected.

  9. Dart Everett :

    AS FOR POSSIBLE FUNDING

    By Sen. Galbraith’s calculations, financing of Shumlincare will require a minimum of $1,600,000,000. To extract this sum from Vermont residents will require one of several tax proposals:

    An employer-paid 11% payroll tax on all employees, including out of state employees, plus a 2% tax paid by employees. This would include schools and municipal governments (which, of course, would get passed on to taxpayers), and ERISA businesses (self-insured companies, e.g. IBM, GE, C&S). In addition, non-wage income (interest, rent, dividends, rent and capital gains) would be taxed at 10%. Self-employed would pay 13%. The cap would be the same as it is for FICA, $113,700 (although the FICA cap increases to $117,000 for 2014). There would be no deductions for home mortgage interest, charitable deductions, etc.

    or

    a 19.5% Sales Tax (includes present 6% Sales Tax) but with no exclusion for food or clothing and expanded to include all services.

    or
    an Income Tax starting at 15.5% and rising to 24.4%.

    It’s almost as though our neighbors to the east helped write Green Mountain Care. Any of these proposed funding mechanisms will drive businesses to New Hampshire, and certainly will discourage new businesses from coming to Vermont. Businesses along the border will lose business as more people cross the border (on all four sides) to avoid a 19.4% sales tax. More wealthy seniors will relocate their legal residences to Florida or other non-income tax states. Those who think Vermont would be a better place to live with a smaller population will get their wish. However, the few left will have a bigger burden to pick up to make up for those who leave.

    Of course, #2,400,000 (another figure Galbraith cites) will require increasing the above numbers by 50%.

    And this is from Democrat Galbraith who favors universal coverage.

    See https://www.youtube.com/watch?v=ZGfzGFBaDDQ

    It’s almost as though our neighbors to the east helped write Green Mountain Care. Any of these proposed funding mechanisms will drive businesses to New Hampshire, and certainly will discourage new businesses from coming to Vermont. Businesses along the border will lose business as more people cross the border (on all four sides) to avoid a 19.4% sales tax. More wealthy seniors will relocate their legal residences to Florida or other non-income tax states. Those who think Vermont would be a better place to live with a smaller population will get their wish. However, the few left will have a bigger burden to pick up to make up for those who leave.

  10. Lance Hagen :

    Must be some ‘new math’ going on. How can the overall cost remain at $5.9 billion when they have a “higher expected implementation costs” and “costs not included in that study”. If these are ‘adds’ and not ‘adjusts’, the total cost needs to go up.

    I think the promise of ‘lower cost healthcare’ is gone by the wayside. The $500 million first year saving from the Hsiao report, went down to $35 million of saving in the UMass report (where Vermont was on the hook to cover $1.6 billion) and now with new cost additions, it looks like the $35 million is going quickly.

    And we have yet to see how they are going to convince the healthcare service providers to accept payment level of 105% of the Medicare rates, which amount to a 15 to 20% payment reduction

  11. Frank Boyd :

    If Columbus went sailing and died, he was only killing his crew. If the State of Vermont continues on this experiment, it has the very real potential to wreck financial havoc on 660K people who live in the state all because a minority believe “Health Care is a Human Right.”

    The reference to Columbus is a perfect example of the blind, we are doing this at all costs, on principal mentality.

    Shumlin has said if the numbers don’t work, this experiment won’t move forward. Here are the numbers (in a very broad range, albeit). Now the question is how does the State of Vermont make this work?

    • Eric Mills :

      If a minority believed healthcare is a human right, this legislation would never have been passed, nor would it be as popular as polls indicate it to be.

      Most people in VT seem to believe healthcare is a human right. Additionally, I would say anyone with a serious illness who has ever faced the possibility of be thrown out on the street because their insurers have found a way to weasel out of paying believes healthcare is a human right.

  12. Paul Lorenzini :
  13. To people who believe in sane government.

    After the healthcare tax is added to payrolls to finance the state’s healthcare boondoggle, comes the carbon tax to finance the state’s RE boondoggle that produces HEAVILY-SUBSIDIZED energy at 3 -4 times annual average grid prices. Imagine what it would cost without subsidies.

    There is ample evidence, the state getting into ANY activity doubles its cost:

    The state education tax added to property bills has NOT raised education OUTCOMES, has nearly doubled costs/student since inception, and serves FEWER students. Yikes.

    This is worse than a botched government defense program.

    State solution? Throw more money at it and declare it a success.

    With more such “government” Vermont’s economy will a leader going down the tubes.

  14. Ralph Colin :

    Does anybody in state government really have any firm evidence that Green Mountain Care and a single-payer system has any hope of addressing health care costs and related problems in a positive or sustainable way? Estimates after estimates are being proposed and the only consistencies in the estimates are that they are increasing day bt day. At this point would anyone be at all surprised if, within the next couple of months, we will be discussing the probability of a need to raise the projections to around $2.5B per year?

    This whole process seems to be a gamble not unlike playing a slot machine. When does it begin to get real? And when will the players ever admit that the don’t have the faintest idea of what the hell they are doing? If this is the type of government we want and the type of people we elect to
    run it, then perhaps we should all be carted off to the looney bin. It’ll take a lot more than 52 beds to accomdate 626 thousand people!

  15. At the meeting yesterday, Jeb Spaudling said: “ In the Governor’s view, the more we can use administrative services the better”.

    As the Governor further says/implies the state wouldn’t want to build a massive administrative organization of benefit heavy state employees to run health care. Quite frankly, looking back at the state’s performance with the health exchange roll out, the very idea of the state running all of health care administration has to be a terrifying thought even for the most staunch of single payer advocates.

    But, lets go back a few years and recall this Governor railing about the high and wasteful administrative costs and profit margins generated by private insurers. Costs that were driving up health care insurance premiums for consumers. He effectively said that this administrative waste has to be eliminated and his vision of health care reform would accomplish that task.

    Its my understanding that the administrative and profit components of Vermont’s health insurers was about 10% of premiums, the balance of the premium is used to pay claims.

    So if the Governor wants to use private administrative services to run the single payer system, the selected provider would likely be our own Blue Cross/Blue Shield (BC/BS) or remotely MVP. These are the same companies that the Governor railed about being inefficient and costly administrators. Of course the state could find another out of state administrator and put hundreds of BC/BS employees out of work.

    If a private administrator is chosen, what will its services and a reasonable profit margin cost the state/tax payers? How much less than the current 10% administrative cost would the new vendor charge?

    Assuming the savings are 2 to 4% of premium, then it seems to me that the state is taking on a huge and on going multi-billion dollar risk for a very small return. In investing, big risks require big returns, that doesn’t seem to be likely with single payer.

    Finally, has the Governor’s staff even given this question any consideration? If they have, what are the administrative savings to be realized?

    • John Greenberg :

      Peter,
      Taking Lance Hagen’s figure of $5.9 billion at face value as the cost of the system and your figure of 4%, then the savings would come to $240 Million, which is half of the savings figure one of the studies promised. All this, of course, allows for NO increase in total costs before the system is implemented and no OTHER savings from implementation of the new system (e.g. switching from ER care to primary care thanks to universal coverage).

      Haven’t you just made the case FOR a single-payer universal system?

      • John:

        I don’t know what the potential savings are or if they even exist. The 2 to 4% figure range was meant as a nudge to get the Shumlin administration going and identify the admin savings he promised to bring with his health care reform.

        You’ll remember all the whoop-la from the Governor about the wasteful administrative inefficiencies in the private insurance market. Well, now its time for the Gov to put his money where is mouth is and identify those inefficiencies and the savings he is going to capture.

        I would think that you would be interested in seeing what the Gov has to say on this matter as its critical to the success of his single payer system.

  16. Tony Redington :

    Cost? It is not a system that “cost” it is a system of payment…we already spend the money, it is about reducing administrative costs and getting accountability and cost control approaches in place…we are paying almost $2,billion now, that is the cost and we arechanging how we pay.

    • Lance Hagen :

      Tony,

      It is about cost! What we were sold a couple of years ago have 2 key elements

      1. Everyone in Vermont would have healthcare coverage
      2. Total healthcare cost would be lower than if we continued with the present system

      Now, with Obama-care, the first item is already be covered (if they ever get the web site to work). Everyone will be required to have health insurance.

      This leaves only the second promise of lower total healthcare cost. At the time of the big sell job, the Hsiao report had Vermont saving $500 million in the first year alone. Things looked great!

      A year later the UMass report had Vermont only saving $35 million in the first year ($ 5,916 million under ‘single payer’ versus $5,951 million without ‘single payer’). And Vermont’s price tag for this $35 million saving is $1,600 million per year in taxes.

      Now today the price tag has gone up to between $1,760 million to $2,170 million per year. The total cost also needs to increase since cost for implementation are higher than expected and they had to include cost not accounted for in the UMass study. So the $35 million in saving is evaporating quickly. Add to this the fact that government always underestimates the costs on any of their program, the actual cost most likely have even higher.

      So the question is, if everyone has insurance under Obama-care and there are no cost savings, why do it?

    • walter carpenter :

      “we are paying almost $2,billion now, that is the cost and we arechanging how we pay.”

      Very true. And, also, we would be eliminating the huge administrative waste our system has built into it.

      • Walter:

        Exactly where is the huge administrative waste that is going to be eliminated under Shumlin’s single payer plan?

        • Walter Carpenter :

          “Exactly where is the huge administrative waste that is going to be eliminated under Shumlin’s single payer plan?”

          Single-payer.

          • Walter:

            Single payer……… that’s your answer?

            Walter, you have to do better than that. You said there is huge administrative waste our system has built into it. So what is the waste you’re talking about and how can it be eliminated?

            These are pretty basic questions relating to your assertion of waste in the existing system. Now, again what is the waste you alluded to?

      • Bill Gardyne :

        My definition of administrative waste is paying $87 million for a computer system that doesn’t work…

        • walter carpenter :

          @peter:

          Yes, that is my answer. Multiple payers, for one, need more administrative personnel to deal with the multiple layers of bureaucracy of each of the multiple payers. And That is just one example.

      • Lance Hagen :

        Walter, get real!

        “And, also, we would be eliminating the huge administrative waste our system has built into it”

        The governor wants to contract out the administrative job (BCBS or MVP) to the same guys you are accusing of being wasteful.

        • Walter Carpenter :

          “The governor wants to contract out the administrative job (BCBS or MVP) to the same guys you are accusing of being wasteful.”

          I am real. This will not be the same old system as before. I am sure that BCBS or MVP, if either one or both are contracted to be the claims administrators or whatever, they will have to operate in an entirely different climate.

  17. Randy Pratt :

    Many historians believe that syphilis was taken to Europe from America by the crew of Christopher Columbus. I have no idea how that relates to healthcare reform in Vermont, but the possibilities are endless…

    Brian, Bob — miss you guys.

  18. Anthony Seidita :

    Do people who work for private industry in VT undersdtand that in 2017, Their families Health Care insurance plan will be stripped from them against their will?
    They will then pay more for healthcare insurance, receive less in services and be placed in the state run single payer system which will esentially be a version of VT medicaid. How is that a win for me and my family?
    Mess with my families health care coverage and I move out of the state. Simple as that.

    • Wendy wilton :

      Anthony, most Vermonters do not know this is coming in 2017.

      Most assume someone will stop a truly crazy idea before it happens.

      What they also don’t know (or think about) is that due a lack of political balance or leadership within the legislature there is no safety valve…and that a group of about 10 people are directing all the political policy of the state. The remaining 170 in the legislature are powerless. Including their own representative.

      • Dan Culligan :

        I’ve learned in my adult life that ‘politics’ can best be summed up as follows:

        “How much can we take from the producers without them revolting and how little can we give to the parasites without them rioting?”

  19. Carol Frenier :

    The basic premise of those who want single-payer is that the government can do a better job than the private sector. This is highly unlikely. People run both systems, and people are subject to error and misunderstanding, not to mention seduction by corruption. So the choice is only between two imperfect systems. Each does better in different realms. When it comes to health care, I would rather trust a competitive private system in which I can buy from one insurance company or another, and go to one provider or another, over a government monopoly. Competitive systems tend to be more cost efficient and creative, but the bottom line for me is that I don’t want a government monopoly controlling my health care decisions. I am all for developing a market-based system that provides subsidies for premiums for those in need, and I am willing to pay more in taxes to make that happen. What I am not willing to do is give up my right to choose because a government expert thinks he/she knows better than me what is right for me. All this talk about money makes me realize that a government system will do nothing to improve healthcare. It won’t even reduce costs. It will just take away my right to choose.

    • Bob Goldberg :

      “The basic premise of those who want single-payer is that the government can do a better job than the private sector. This is highly unlikely.”

      Given that the government has done exactly that throughout the modern world, it seems to be the most likely outcome.

      You views are clearly based upon your dislike of the government rather than the available data.

      May I assume that your dislike of the government does not apply to roads, telecommunications and the clean air and water you enjoy on a daily basis?

      • Paul Lorenzini :

        WATER costs 100$/ month in my town, I wish they would reduce the cost of that instead of raising it which they will.

        ANYTIME the government says it will reduce costs to us, take it with a full salt shaker or maybe LSD if you really want to believe it.

      • Eric Jacobs :

        Bob,

        Dislike of government or dislike of government overreaching?

        Roads are infrastructure that only government has the authority to safeguard due, in part, to private public ownership of lands through which roads travel. Unfortunately, our infrastructure is crumbling. Just ask VP Biden, he went off on the subject last week.

        A better example might be a comparison such as:
        USPS vs UPS

        • Bob Goldberg :

          “Dislike of government or dislike of government overreaching?”

          Overreach in this context is more a matter of personal opinion.

          I do not see this as overreach, as it has been proven to achieve better results in pretty much all of our peer nations.

    • walter carpenter :

      “Competitive systems tend to be more cost efficient and creative, but the bottom line for me is that I don’t want a government monopoly controlling my health care decisions. ”

      If competitive systems did better than publicly-funded systems than why haven’t they? We’ve had supposedly competitive systems for eighty or more years now and they have not controlled costs nor managed to provide universal access to health care for all Americans. In other democratic nations with single-payer, they have universal access and lower costs than we do.

    • Wendy wilton :

      Well said.

    • sandra bettis :

      carol – you would prefer a for profit ins co making your health care decisions? what do you think their motive would be? as far as privatization goes, look at our prison system – do you really think we are saving money and have better prisons now that we have privatized them?

  20. Walter Carpenter :

    They will then pay more for healthcare insurance, receive less in services and be placed in the state run single payer system which will esentially be a version of VT medicaid. ”

    And what exactly is wrong with VT medicaid? I was on vhap for some years; it was the best insurance I’ve had. And how do you know you will receive less services while paying more?

  21. Dave Bellini :

    If the new healthcare system is going to be an improvement then the Governor would be hot to tell everyone the details and prove his point. The fact that he is withholding all the important information until AFTER the election should serve as a wake up call. It’s been 4 years and still there are no answers. What’s amazing is that the “true believers” don’t want any.

    • Patricia Crocker :

      Wendy, Now you can say, “I told you so”. They should have paid you to do the study, and saved the state a lot of money. I’m sure you would have given the state a better deal.

  22. sandra bettis :

    peter, if you earn 30,000, you get 0 in entitlements, believe me.

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