Analysis: Shumlin built ‘lead airplane’ for single payer

Gov. Peter Shumlin at Wednesday's news conference. Photo by John Herrick/VTDigger

Gov. Peter Shumlin at a news conference in December. Photo by John Herrick/VTDigger

Gov. Peter Shumlin could have proposed a financing plan for single payer health care that cost $1 billion less than the one he presented to the public Dec. 17.

Instead, demoralized after a stunning near defeat in the General Election, Shumlin scrapped his long awaited, universal, publicly financed health care plan because he said it would shock Vermont’s fragile economy.

Shumlin has said abandoning the plan is the greatest disappointment of his political career. In remarks a week later, the governor said it was not a political decision.

But critics say that once Shumlin resolved to pull the plug, he cast the program in the most negative light possible because it was not politically viable in the context of his loss of popular support and against the backdrop of a lagging state economy.

Single payer, with the billions needed in revenue, may never have gotten anywhere in the Legislature. With the state facing a $100 million budget gap and anxiety about potential property tax reforms, the governor’s signature initiative faced an uphill battle in the Legislature, which this session has a larger contingent of Republicans who oppose the idea of a single payer program.

But critics say now Vermonters won’t know if single payer could have succeeded in 2015, because after Shumlin decided it wasn’t feasible, he found a way to mitigate the inevitable wave of political backlash and appease his main constituencies: liberal advocates, business leaders, providers, and teacher and state employee unions.

Shumlin had said he would present a menu of options to the Vermont Legislature in the two year run up to the announcement, but instead he presented one plan that Vermonters could not afford.

One of the alternative plans proposed by his health care reform team that was not considered in the final analysis was a much less expensive, $1.6 billion option, that would have offered a universal, publicly financed insurance plan with benefit levels on par with what is available to most Vermonters in the commercial insurance market today, according to documents provided by the Shumlin administration.

“I don’t know exactly when he made that decision, but once it was made, there is no question in my mind that Shumlin pivoted to his roots and his instincts, which are purely political,” said Hamilton Davis, a journalist and longtime observer of Vermont health reform.

“He hung everything he could on it and walked away.”

John Franco, a prominent Burlington attorney who has been involved health care reform for two decades, says that Shumlin purposely chose a plan that covered 94 percent of individuals’ health care costs. Proposing an overly expensive option, Franco says, was a political calculation.

“If you build an airplane out of lead, it’s not going to fly,” Franco said.

Shumlin has insisted it was not a political decision and that the documents he released would bear that out.

But buried on the 260th page of the appendices to his report released just before New Year’s Day, is a financing plan that might have been a reasonable starting point for going forward.

This plan would have offered insurance at a level that is equal to the average employer plan now on the market and would have cost $1 billion less than the cadillac level plan Shumlin rejected.

The ramifications of Shumlin’s decision could echo far beyond Vermont, according to a national single payer advocate and health care economist.

Gerald Friedman, a UMass-Amherst economist, says Shumlin’s decision was flawed. He, too, believes the decision was ultimately a political one.

The administration’s 2014 report includes little new information about how single payer could be financed, Friedman says, and he believes the financing plan could have been released two years ago when it was originally promised to the Legislature.

Friedman and others say the governor could have said the plan was doomed because it would have been difficult to get waivers from the federal government and Congress is now dominated by Republicans who wouldn’t look favorably on funding Vermont’s attempt at single payer.

By blaming economic factors, Friedman says the governor set the single payer movement back decades.

Federal self-insurance law is a roadblock that Sen. Tim Ashe sees as a potentially insurmountable hurdle. The Shumlin administration’s report glossed over the impact of the Employee Retirement Income Security Act on the success of single payer, Ashe says.

“For all the criticism coming from people who are mostly advocates for a very far reaching tax financing system, they’ve glossed over that variable and have never given a good explanation of how that problem was going to go away,” Ashe said. “Any number of larger employers who self insure could file one court document and grind some portion of Green Mountain Care to a halt.

Building a lead airplane

Gov's Presentation
The balance sheet for Shumlin’s single payer proposal. source: Green Mountain Care Financing Presentation Dec. 17, 2014

The plan Shumlin presented had a first year cost to Vermont of $2.6 billion. That’s $400 million more than the high end of the estimate he released jointly with the Legislature last year.

The governor proposed a plan that covered 94 percent of people’s health care costs, i.e. the plan’s actuarial value. He could have, however, pitched a plan with an actuarial value of 87 percent that would have cost $300 million less.

Act 48, Vermont’s single payer law, directed the administration to shoot for a plan that covered 87 percent of costs — a target the governor decided was too low.

The average private sector health plan covers 86 percent of health care costs.

Twenty-two percent of Vermonters have coverage at a 95 percent actuarial value and another 25 percent are between 90 percent and 95 percent, according to administration officials.

Shumlin has said it would not be fair to ask these individuals to pay more toward their health insurance.

However, most of those high-value health plans are held by teachers and state employees who have negotiated for higher benefit levels over time, and the teacher and state employee plans will likely become less generous when they are hit with a federal “cadillac” or excise tax that goes into effect in 2018.

Several other policy choices also significantly increased the year one cost of single payer, and run counter to what the governor outlined in his 2013 report.

Most significant was Shumlin’s choice to include out-of-state workers in the program, which adds more than $200 million to its cost. That’s a departure from the 2013 UMASS report on single payer.

Shumlin said excluding out-of-state workers would be too complicated for employers who would “have to pay for Green Mountain Care and a separate plan for out-of-state workers.”

The governor repeatedly blamed the numbers spit out by the economic model they were using, but deciding not to include workers that commute to Vermont is a policy choice, critics say. One that decision was made late in the game it significantly increased the program’s cost.

Including out-of-state workers could have been an option instead of a requirement of the plan. Instead, Shumlin declared that excluding out-of-state workers was a nonstarter.

Shumlin did the same with Vermont’s provider tax. Virtually every state has a provider tax on hospital revenue. States then use the revenue to draw down federal match money for their Medicaid programs.

Scrapping the provider tax eliminates $160 million in revenue.

The administration’s argument was that in a single payer system, the tax becomes “circular.”

“You’re taxing yourself,” said Michael Costa, the governor’s single payer tax expert. “There’s a policy imperative to be done with the provider tax,” he said when the governor made his announcement.

In other words, if the state of Vermont is making all the payments to hospitals, then taxing their revenue would be “circular” and a bad policy choice.

But Green Mountain Care was never a pure single payer system. It anticipated there would still be Medicare, federal employees, military, large-employer-sponsored insurance plans and payments from the private insurance of people who live outside Vermont.

Removing the provider tax was a policy decision, and other financing scenarios in the report did include a provider tax.

Finally, and less significantly, the Shumlin administration assumed there would be zero administrative savings to the program in year one.

The administration’s 2013 report suggests there would be $8 million to $20 million in savings in year one, and $39 million to $211 million by year three.

The above factors are all policy choices that have nothing to do with surprises served up by the economic model, which increased the program’s cost by more than $1 billion.

Alternate financing plan buried

Starting on page 260 of the appendices to Shumlin’s 2014 report are 15 single payer financing proposals that “more closely” match the assumptions of the 2013 report.

All were run through the economic model to vet the numbers.

None of the models were presented to lawmakers or the public — and none were highlighted in the governor’s report.

At a press briefing, the members of the governor’s health care reform team — Costa, Robin Lunge and Lawrence Miller — were available for questions, but they opted not to walk reporters through the report and point out salient details in the hundreds of pages of appendices, briefing documents with the governor and the business and consumer councils.

Among the 15 different models in the document dump is Financing Concept 12, which uses an 87 percent actuarial value and would require $1.6 billion in state revenue for the first year.

It excludes out-of-state workers and does not offer supplemental coverage to federal employees or people with employer sponsored coverage, all of which is contained in the plan Shumlin chose.

Alternative Finance Concept 12
Balance sheet for Alternate Financing Concept 12. source: complete appendices to 2014 GMC coverage and financing report.

What the public reception of such a plan might have been on Dec.17 is unknowable.

But critics like Davis and Franco argue it would have been a more reasonable starting point if Shumlin wanted to continue the fight for single payer in 2015.

Many advocates would have undoubtedly expressed disappointment with an 87 percent actuarial value. But they were already prepared to push for stronger benefits in the Legislature. Now they have nothing to fight for, and many are deeply disappointed.

Meanwhile, Shumlin is able to say to state employees and teachers unions that he would have only moved forward with the program if it preserved the richer benefits they have now.

For business leaders and health care providers, who were always leery of the program, his decision was welcome news because it provided greater economic certainty in the near future.

Though business leaders voiced support for eliminating employers’ responsibility for health insurance, they roundly applauded Shumlin’s decision as pragmatic on Dec. 17. No one in the business community suggested he should press forward.

Hospitals, which were always concerned that the government would be an unreliable financier for Vermont’s health care system, also praised Shumlin’s decision.

Correction: A sentence in an earlier version of this story was incorrect: The average private sector health plan covers 86 percent of health care costs, not public sector as originally written.

Anne Galloway

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69 Comments on "Analysis: Shumlin built ‘lead airplane’ for single payer"

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victor ialeggio
1 year 5 months ago

Thank you, Anne & Morgan. If what Mr Friedmansays is true, that Shumlin may have set back the single payer movement decades, this is a national story, not just a local one which gets overshadowed by the joint-session dog-and-pony show we have coming up on Thursday.

David Schoales
1 year 5 months ago

Ditto. This info is important. Thanks for digging it out.

1 year 5 months ago

A terrific article!
GET RID OF THIS GUY TOMORROW.

By doing so Dems can establish far into the future
the PRIMACY OF THE LEGISLATURE and their own case that their party is FAIR.

If Milne then dissapoints, you can get rid of him too! Later.

Kudos to John Franco for “Lead Airplane” !

2LT Dennis Morrisseau USArmy [armor – Vietnam era] retired. POB 177 W Pawlet, VT 05775 802 645 9727 [email protected]

Ron Pulcer
1 year 5 months ago
Dennis, Interesting points. As far as so-called Single Payer is concerned, it doesn’t matter who the Legislature votes for tomorrow. For the time being (years or decades), in Vermont, Single Payer is way, way back on back, back burner (if not totally gone). Dan Feliciano ran on a platform of “repealing” Single Payer or Act 48, for which Governor Shumlin has already done that for him! Has Feliciano sent Shumlin a “thank you” card yet? Scott Milne was somewhat of a fence-sitter (wait and see), not necessarily for, but not strongly against Single Payer, at least during the election (by… Read more »
Erwin Richter
1 year 5 months ago

Professor Friedman is a Marxist economist from UMass, who has spent his whole life in academia. I spent a semester in his class listening to him lecture on the joys of socialism and communism. Is this really the guy you want redesigning our healthcare system?

Stan Hopson
1 year 5 months ago

The governor built an airplane and flew into the side of a mountain. Luckily, Vermont’s state population wasn’t inside.

Even under the rosier finance picture detailed above, the devil would be in its execution and we all know how that slow-mo train wreck goes.

Franky Boyd
1 year 5 months ago
“A billion dollars isn’t what it used to be.” Nelson Bunker Hunt At $1.6 billion or $2.6 billion, this plan was doomed from the beginning. If $2.6B required an 11.5% payroll tax and $9% income tax, then raising $1.6B would still have required a 8% payroll tax and a 6% income tax, or something along those lines. The result? Mass job and wealth migration out of Vermont. “Lunatic Fringe – I know you’re out there.” Red Rider This entire debate was about process (who pays) not outcome (simply trying to get the last 5% of Vermonters who are uninsured to… Read more »
Wendy Wilton
1 year 5 months ago
The charts above are eerily similar to my presentation in the projections I prepared to analyze single payer. The format is nearly identical. Makes me think the governor’s team spent some time looking at my analysis. Interesting. I assumed it would be difficult to require state employees and teachers to take a cut to the benefit package and if the plan was a lower AV then the state and/or school districts would likely be forced to pick up wrap around or supplemental coverage in the plan. Shumlin knows this is a political reality and the activists do not acknowledge this.… Read more »
Chet Greenwood
1 year 5 months ago

It is very difficult for Governor Shumlin to read with his “rose colored” glasses on!

Willem Post
1 year 5 months ago
Wendy/Chet, The governor’s healthcare posse is still high on Kool-Aid, as they will now try to sneak in “All-Payer” through the back door, which would have Montpelier bureaucrats play with about $3.0 billion in 2017 of Medicare and Medicaid funds, this after having made a mess of Vermont Health Connect website. It would be presumptuous for state and Green Mountain Care, GMC, bureaucrats to claim they could produce significant savings by managing $2.75 billion of Medicare and Medicare funds more efficiently than the federal government, which has been doing it for at least 40 years!! It appears the only reason… Read more »
Jim Christiansen
1 year 5 months ago

So our Governor didn’t deliver what he promised and some advocates now claim he was acting in his political best interest.
Where is the news in that?

Kathy Callaghan
1 year 5 months ago

“The governor proposed a plan that covered 94 percent of people’s health care costs, i.e. the plan’s actuarial value. He could have, however, pitched a plan with an actuarial value of 87 percent that would have cost $300 million less.”

True, but that would still leave the plan costing $2.3 billion – which is also unaffordable and Vermonters would have to pay 7% more of their health care costs on top of the additional state tax or “public premium. That solution wouldnt’ fly either.

BTW, nice party last night, Anne!

Jim Smith
1 year 5 months ago
When it was no longer politically advantageous to continue pursuing single-payer, Shumlin pulled the plug. He’s a pragmatist who knew it would be better to take a beating now than commit political suicide after pushing forward a plan that was DOA, especially since he’s still dependent on the legislature to ratify his win in the November election. After all, Shumlin’s a politician and his first priority is always staying in office. I don’t think it was a courageous or a cowardly decision to pull the plug on single payer at this time. It was the ONLY decision he could make… Read more »
J. Scott Cameron
1 year 5 months ago
“It sounds to me like one of the reasons for pulling the plug may have been to avoid having a truly difficult discussion with these groups of people who would face paying the highest income tax (9.5%) while having the quality and coverage of their insurance plan significantly degraded as well as business owners who stood to pay both the 9.5% income and 11% payroll taxes.” You are incorrect. The”quality and coverage” under the Shumlin “single option” plan was coverage at 94% actuarial value, which is what public employees (teachers, state employees, some municipal employees) enjoy. Shumlin chose this option/model… Read more »
Kathy Callaghan
1 year 5 months ago

Mr. Greenwood, state employees do not make the kind of money that would require a 9.5% income tax, trust me. And neither do many if not most teachers. It is erroneous to equate a good health plan with high wages. In fact, state employees over the years have given up wage increases to get better benefits. There is no correlation between state employees having a good health plan and making a lot of money.

Willem Post
1 year 5 months ago

Kathy,

And private sector workers have given up raises to KEEP relatively meager benefits which usually do not include drugs, dental, and glasses and hearing aids, etc.

Most private sector health plans are well below platinum level, if they exist at all.

Josh Fitzhugh
1 year 5 months ago

Excellent, excellent article VTD and timely given tomorrow’s legislative vote.

Benj Deppman
1 year 5 months ago

Agreed.

John Freitag
1 year 5 months ago

The best thing that has happened this New Year is that Vermont Digger made it fund raising goal.
I am very appreciative of the insightful reporting, of which the story above is a prime example, and the thoughtful comments of readers. Keep up the great work.

Lauren Norford
1 year 5 months ago

I am hoping the disparity between the Cadillac plans and the plans that “most of us” have is highlighted in this debate. It is increasingly frustrating to have property and state taxes continuously go up in order to finance these plans, while the majority of us– 78% according to this article– also have $5,000 to 20,000 deductibles to contend with. This year excellent school programs are also being cut–enrichment, languages, music–while benefits remain untouched.

Willem Post
1 year 5 months ago
Lauren, Here is an example of a Cadillac plan: FAMILY INSURED BY THE CITY OF RUTLAND The family consists of 4 people, 2 adults of which one is employed by the City, 2 children of which one is in college and covered by the City, and one, 26, with separate coverage through the Affordable Care Act, ACA. – The premium cost of a high-deductible, $5,000, family plan, WITH dental and drug cost coverage, = $22,161 for 3 people in 2014. NOTE: Competitive bidding is limited, as BC/BS, and MVP are the only other insurers in the state. Vermont’s “business-friendliness” chased… Read more »
Lauren Norford
1 year 5 months ago

To me the plan you referenced is not a Cadillac plan. I believe our school district employees have a $100 dollar deductible. Most of us have a $5,000 deductible or more.

Robbie Harold
1 year 5 months ago

This is the sort of reporting that makes VTDigger such an invaluable resource for our state. Thanks for all the hard work and cogent analysis.

Lawrence Miller, Robin Lunge, Michael Costa
1 year 5 months ago
The decision to not move forward with a public financing system for health care in Vermont was an incredibly difficult one and it was not taken lightly. The charge that we essentially cooked the books for political purposes, is both absurd and insulting. There are many difficult tradeoffs in designing a new health care system that affect the lives of almost all Vermonters. It is neither fair nor borne out by serious scrutiny of our plan and the documents we released with it to say otherwise. Some say that we could keep costs down by offering a less generous plan.… Read more »
Jamie Carter
1 year 5 months ago
Could you please remind your boss that he is required under law to submit a plan for single payer to the Legislature. Just because the “numbers” don’t work in his opinion does absolve him from the law passed by the legislature and signed into law by him. Until that is done, he is by definition, a law breaker. If he wishes to pack up his toys and go home then so be it, but if he is going to stay in office he is accountable to the law and he needs to abide by it. One final point, saying this… Read more »
Robert Fuller
1 year 5 months ago

I’m no big fan of Shumlin either, but there is no way to tell what the vote would have been. Anybody who voted for Shumlin on the basis of health care would not have voted for Milne or Feliciano despite how disappointed they might have been. Would they have just sat this one out? Unlikely as they would also most likely align with Shumlin on other issues.

Joyce Wilson
1 year 5 months ago
Mr Miller, Ms Lunge & Mr Costa, It was very clear from even Dr Hsaio’s 2011 single payer report that many small businesses in Vermont would be crushed with Vermont’s single payer taxation. The taxation suggested by Dr Hsaio was not that different from your taxation. Many small business owners in Vermont that had employees making decent wages realized back in 2011 that they would not be here under Vermont’s single payer taxation. It was crystal clear to many of us in 2011. Many small business owners have many of their employees coming from large corporations (for example, GE that… Read more »
Ann Meade
1 year 5 months ago

Can you please address why you didn’t give more credence or acknowledge the great Wendy Wilton spreadsheet? Over and over I have heard she had all the answers, what did you overlook?

1 year 5 months ago
Did you say, “Obviously, we expected criticism of the decision to delay implementation of Green Mountain Care”? Delay? There is no financial scenario under which it CAN be implemented. This thing is dead as a doornail. Vermont is never going to magically increase its tax receipts to the point where this plan can be sustainable year over year. Even under an 87% AV the plan runs into the red in Year 3. The Republican majority in Washington is lined up to begin dismantling Obamacare piece by piece. Which pieces come first, who knows, but it certainly doesn’t bode well for… Read more »
Willem Post
1 year 5 months ago

This really takes the cake. Wendy made an analysis of costs that was ignored for about 2 years. A quick review of her work and a report on that would have been the right thing to do.

Oh no, let us bring in Gruber and his cohorts to legitimize our purpose and our work.

You people should have thrown in the towel much earlier, unless you were under orders no to. Instead great consternation was caused among many Vermonters who are already trying to survive the never ending mandate coming out of Montpelier

BILL SHAVER
1 year 5 months ago

the people of vermont & the rest of the country still deserve single payer no matter the cost…and attacking mr schumlin..shame on you, he tried…WHAT HAVE YOU DONE!

Sally Shaw
1 year 5 months ago

Agreed, Bill. Funny that most of the civilized world has found a way to provide health care to its citizens, but not this cowboy oligarchy we call home. Vermont will lead the way. I am sure of that. Not now, but someday. Thank you Mr. Shumlin for opening the door and trying to bring sanity to an unjust world where only the rich and well connected can feel secure that they will get decent health care if needed.

Hilton Dier
1 year 5 months ago
It is interesting, Sally, that most of Europe manages to run publicly financed single payer systems at about half the cost per person of our private system, with better outcomes. They must be magicians or something. Or maybe their politics, however flawed, aren’t as deeply corrupt as ours. The thing I notice in all the complaints about the cost of the projected system is that nobody acknowledges that we are paying premiums right now. The cost of a Bronze plan under the present system is about $350 a month for an individual. Single payer would replace that, not add to… Read more »
Hilton Dier
1 year 5 months ago

I wasn’t saying I want the bronze plan or that I want anyone else to have the bronze plan.

I was pointing out that the 87% single payer plan could be implemented for less than the cheapest present ACA plan. For a median income Vermont household the 5.3% tax adder would be $233 a month. That’s for a household, not an individual.

I’d be interested to see the total premiums we are dumping into the pockets of the insurance companies right now.

John Greenberg
1 year 5 months ago

Hilton Dier,
“That’s for a household, not an individual.” Your math above divided the $1.6 billion by 625,000, which is individuals, not households. One of your statements is wrong, isn’t it?

Lauren Norford
1 year 5 months ago

Most employees have a Bronze plan or lower and must accept it. The exceptions are teachers and VT State employees who have the Gold Plan level.

Hilton Dier
1 year 5 months ago

John Greenberg, you are right, and thank you. It is per individual, not household. Momentary brain glitch.

Still cheaper than the Bronze plan by a third.

And Lauren Norford, apparently the teachers are expecting their Gold plans to go away in a couple of years.

Jon Corrigan
1 year 5 months ago

Sorry to burst your bubble, but nobody ‘deserves’ anything. You started life with the same opportunities as everybody else; perhaps the ‘Bill of Rights’ is too complicated and we should issue kids a ‘Bill of No Rights’ as soon as they start school, so they won’t develop a ‘victim mentality’ quite so early.

Willem Post
1 year 5 months ago

Jim,

This type of dysfunction has been going on since the beginning of mankind.

America is in economic competition with other nations.

We should have social programs to minimize the number of such dysfunctional people, i.e., not giving them money so they can breed some more and do more economic damage to the rest of society, but by requiring effective birth control, BEFORE giving them any money.

Glenn Thompson
1 year 5 months ago
From the article! “Instead, demoralized after a stunning near defeat in the General Election, Shumlin scrapped his long awaited, universal, publicly financed health care plan because he said it would shock Vermont’s fragile economy.” The question becomes…when did Shumlin realize Single Payer was going to be a *shock* to Vermont’s economy? That should have been obvious before Single Payer was even passed and signed into law. I’d bet the farm that determination occurred long before now…but yet it was pushed forward for the sole purpose of gaining political points with Single Payer supporters. If announced before the elections…..Shumlin surely would… Read more »
Ron Pulcer
1 year 5 months ago

Whether “Lead Airplanes” or “Led Zepplin”, either way it is “Heavy Metal”!

1 year 5 months ago

Ha ha! Good one!

John Carroll
1 year 5 months ago

Better, I suppose, a Lead Airplane that never gets off the drawing board than the Progressives’ idea for a Spruce Goose to be built at the cost of billions — and that will most surely go down in flames, taking 436,000 insured Vermonters with it.

Four years of this Administration and Legislature and after all this we are offered nothing better than a choice between Scylla and Charybdis. Very troubling.

Willem Post
1 year 5 months ago

John,

Socialist Democrats have taken over Vermont, but it is becoming easier to put an end to it, as Milne showed.

Gary Murdock
1 year 5 months ago
Don’t blame Shumlin or his delegates, blame our truly clueless legislature for passing Act 48 in the first place. I would bet tomorrows breakfast that a committee could have come up with a reasonably close estimate of the cost of this boondoggle by polling insurers for their rates and multiply that by the population it would serve, all without wasting the millions that they did. Are they so arrogant…or ignorant…or both that they think a state bureaucracy can do it better than a Blue Cross? State bureaucratic inefficiencies alone will offset any savings incurred by removing an insurers profit from… Read more »
Willem Post
1 year 5 months ago

Gary,

Don’t blame Shumlin or his delegates, blame our truly clueless legislature for passing Act 48 in the first place.

Shumlin is the LEADER of the Democrats. The Legislature would have never passed Act 48 without Shumlin’s urging.

Dave Bellini
1 year 5 months ago
Some folks have been asking the same basic questions for 4 straight years: “How does it work for business owners that don’t provide insurance? What about ERISA plans? What about workers comp? How does a high AV plan get paid for? Why would anyone want a low AV plan? Who are the ‘losers’ ? Retirees living out of state…” The answer is: There was never going to be an answer. It has always been a house of cards. Now, some people are shocked because they looked behind the curtain. Perhaps some other countries do have a better model. But also… Read more »
Sally Shaw
1 year 5 months ago

Vermont is not a nation. But it used to be. And Single Payer will be the way to go, eventually. And it will come about through visionary state leadership. I highly doubt we will see corporate socialism replaced by citizen socialism any time soon on the national level.

Sally Shaw
1 year 5 months ago

Vermont is not a nation. But it was, once. And I predict change to our dysfunctional health care system will come about will grow through the visionary leadership of states like Vermont, not on the national level. Eg. Massachusett’s “Romney Care” leading to the ACA.

Jim Parker
1 year 5 months ago

single payer education is demonstration enough of the impact that single payer health care would have controlling costs.
1.5 billion to educate 89,000 students is approaching triple the cost of education at inception of act 60.
The NEA was front and center then as it was during the single payer health care debate.

When will we realize that the NEA is a selfish organization holding education of our children hostage to their greed. When has the NEA threatened to strike for better classroom education, only salary, benefits, tenure and job security.

Peter Galbraith
1 year 5 months ago
Last year, I introduced S. 252, a bill to finance universal health care coverage in Vermont. It raised $1.6 billion through an 11% payroll tax on employers, a 2% payroll tax on employees, eliminating the pass through of federal itemized deductions on the Vermont income tax (most states don’t allow this) and a 10% tax on non wage income that exceeds earned income. All these taxes would have the same cap as social security, about $116,000 a year. There was no mandatory premium, no income tax rate hike and my bill exempted federal employees, military and Medicare recipients from the… Read more »
Norm Etkind
1 year 5 months ago
And now we are at the crux of the issue. The taxes would be capped under Peter’s plan described above and on other proposals. It is always important to protect the wealthy. So SS is capped and health care is capped. To have a rational health care system it needs to be supported by everyone and not “capped”. Are we forgetting in this discussion that all these costs are currently being paid and the discussion is about who foots the bill? Should it be the working person or the wealthy? Health insurance may cost a person earning a million dollars… Read more »
Annette Smith
1 year 5 months ago

Peter, I wonder if you can answer a question I have and I’ve seen others post a similar question in vtdigger.org comments.

I thought that a real single payer system decouples employment from health care. I understand your proposed funding tracks the current system and therefore creates less disruption, but what you are suggesting and what Gov. Shumlin was apparently working on keep the employers as part of the system.

Can you comment on what it would take to actually decouple health care payments from employment?

Thank you.

Peter Galbraith
1 year 5 months ago
Annette, Under the current system, most working Americans get their health care from their employers. If Act 48 had been implemented, most Vermonters would have their health are from the state. Thus, the benefit is not linked to the specific plan offered by the employer. And, Vermonters who lose or change their jobs do not lose or change their healthcare, as is true today. The payroll tax is the means to pay for the government provided health care. It is like social security where the employer (and the employee) pay a payroll tax but the retirement benefit comes from the… Read more »
Willem Post
1 year 5 months ago
Peter, This is about the state government taking over a $5.5 billion chunk of Vermont’s Gross State Product of about $30 billion under the guise of Single-Payer. Socialist like to take slice after slice of the state’s economy and put it under the “care” of inefficient government. Why do you think Vermont’s government is not growing? These programs act like a wet blanket. The same happened to centralized school financing. Several billion dollars are controlled in some manner by the state. In the meantime, Legislators, with help of “advocates” have pet education programs they like to mandate to make education… Read more »
Peter Galbraith
1 year 5 months ago
Willem, In theory, a tax to finance publicly funded health care substitutes for what employers and others now pay privately. But, I agree it is hard to capture the same amount and there are inequities in any publicly financed system. (As there are in the present system). That is why I proposed last May a public option on the exchange that would be voluntary and yet encourage (but not require) everyone to go into a single plan. With significant state subsidies to make the plan affordable, this would cost just 12% of the Shumlin Plan. Look for my upcoming piece… Read more »
Kathy Callaghan
1 year 5 months ago

Peter, thanks for keeping up with this issue while you have new responsibilities – and thanks for sharing your findings with us. Yours is a voice of common sense, which has been sorely lacking in this divisive debate. Keep up the good work!

Willem Post
1 year 5 months ago
Peter, The inequity became glaringly clear when 94% actuarial value was used to estimate Single-Payer costs. Why 94%? Well, 94% is platinum level, the level state, quasi-state, such as EV, teachers, firemen, policemen, town workers, etc., have. Politically, Shumlin could not REDUCE THEIR health benefit package, which includes, dental and drugs, and pick a big fight with public unions. He came close to losing the election to an UNKNOWN. Raising EVERYONE to platinum level would bankrupt Vermont, as Wendy and others have pointed out 2 years ago, and as is now obvious to anyone without a tin ear. The Legislature… Read more »
David Dempsey
1 year 5 months ago
For now at least, single payer is not going to happen. Now it’s time for the administration and the legislature to take a hard look at the performance of VHC. Act 48 mandates that Vermonters must buy their health insurance from the exchange, supposedly to facilitate the change to single payer. Because of that mandate, Vermonters are not allowed to look for an insurance company that can handle changes of cirumstances, like a death, birth of a child or change in income without having to wait for weeks or months to get things straightened out. If an outside contractor had… Read more »
Walter Carpenter
1 year 5 months ago

“Socialist like to take slice after slice of the state’s economy and put it under the “care” of inefficient government.”

We wouldn’t have to, William, if the so-called free market was efficient in the first place and if it treated all fairly, which it does not and never has.

Willem Post
1 year 5 months ago
Walter, All people do not have equal inborn ability to learn skills to earn good money. The market is very efficient at rewarding talent and hard work. The reason for that efficiency is because it pays in terms of making marketable goods and services which leads to sales and profits. People who do not measure up are fired and replaced by people who do. There are many people who do not know how to compete, because they failed to pay diligent attention in school. These people see others succeed, and see themselves as failures, so they look for handouts, and… Read more »
ray giroux
1 year 5 months ago
What a deep dark and tangled web this is, distracting all who would cast their eyes on it. Drawing in the unaware to the clutches of big Pharm. Choices not given and the freedom to opt out denied by the very machinations that would profit from the never ending need to treat the symptoms, never looking for the cause. Be careful what you wish for. Good health is not given nor mandated by Government. It is a personal responsibility. Do you think, if you take a pill, you have been healed? Think again. We are being lead, seemingly with our… Read more »
Ellen Fiske
1 year 5 months ago

Big Pharma makes single payer financially unfeasible (drugs are so expensive it breaks the bank…and they tend to cause additional health problems, not create health)

John Franco
1 year 5 months ago
Under Alternative Financing Option #12, the Governor could have met his target rate of not more than an 8% employer payroll tax while still keeping the current 75%/25% “maintenance of effort” share of premium costs between employers and households. This would have looked very much like former Sen. Galbraith’s proposal, but with a graduated payroll tax. The employer share could be financed by a 1% payroll tax on up to the first $500 thousand of payroll. This would apply to almost 90% of all Vermont employers, avoid the sticker shock problem for them, and eliminate the need for the $1/2… Read more »
Willem Post
1 year 5 months ago

John,

Shoudda, coudda, woudda.

Get over it. Single-Payer and more ridge line wind are DEAD.

Kathy Callaghan
1 year 5 months ago

John, does your analysis include covering Medicare recipients, ERISA employers or federally covered individuals? Just curious as to where they would fall.

Falko Schilling
1 year 5 months ago
It’s no surprise that putting forward a viable plan for Green Mountain Care required many difficult policy decisions. At the end of the day, Governor Shumlin’s basic plan was the right one for Vermont. There was no way for a system to get off the ground if it gave the majority of Vermonters lower value coverage and left businesses paying into the system for employees who could not take advantage of Green Mountain Care. The fact that the finances didn’t make the plan immediately viable doesn’t mean that important progress can’t be made this year. And it doesn’t mean that… Read more »
Ellen Fiske
1 year 5 months ago

In order to make single payer healthcare financially viable, we would need to get health care out of the clutches of the high-profit, monopolizing, very expensive, pharmaceutical industry. Likewise, we would have to get campaign finance out of their clutches. Right now they are some of the biggest campaign contributors. Politicians won’t be likely to do the right things to get health care out of their clutches, until we clean up campaign finance.

Robert Bristow-Johnson
1 year 5 months ago

Why is it, that we cannot offer, with the citizens/state of Vermont as the “single payer”, a non-Cadillac plan (say the 86% actuarial value) to every citizen of the state. Everyone gets that “86%”. Then the teachers (with their unions) and city employees (with their unions) and the well-to-do privately employed (currently with plans having 96% actuarial value) get to purchase, on the private market, insurance that plugs the gap from 86% to 96%?

Why can’t we do that? Sorta like “medigap” insurance.

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