A single-payer health care system would likely save money in the first few years of implementation, but over time costs would likely outstrip revenues, according to Steve Klein, director of the Vermont Joint Fiscal Office. ADD IN: Klein prefaced his remarks by saying that costs for the existing private health care system would grow at an even faster rate.
The House Health Care Committee asked Klein to evaluate the financial implications of the Hsaio single-payer report on Thursday.
“The good news is, if we take on this whole system … in the first two years we’ll see cost savings,” Klein said.
The bad news? Klein said in countries that use single-payer systems, the long-term, economic trends show an underlying financial dynamic in which health care costs “rise faster than revenues.”
Klein also warned that building a system will entail making difficult choices regarding benefit levels and revenue sources for the system. On the federal level, he anticipates there will be fewer resources available.
“It’s not going to be a pretty picture,” Klein said.
He advised the committee to adopt legislation that would create an independent governing and oversight board, along the lines of what Hsiao and Gov. Peter Shumlin recommend. Lawmakers, in his view, should not be making decisions, for example, about how much providers should be paid or what the health care benefits should look like.
“The success (of the system) is going to depend on how much autonomy you give this body,” Klein said.
The three main issues the board will need to grapple with include estimating the price tag for the system, creating benefits packages and figuring out a system for payments to providers.
“Every time I take one of those issues off the table, the others move around,” Klein said. “An independent board would play with all three and develop a comprehensive plan.”
The Legislature’s role, in this scenario, would be to provide oversight and to appropriate the money for the system. Klein suggested that lawmakers set the goals, outcomes and performance measures that would enable them to hold the board accountable.
“You want to give the board autonomy, and get yourself out of the direct negotiations,” Klein said.
Last week, when Hsiao presented the final draft of his report to the Legislature, he also advised that lawmakers try to depoliticize the board as much as possible.
Klein told the committee that he has concerns about the information technology that will serve as the underpinnings of the single-payer system. He outlined the four streams of IT data — clinical records, the financial payment system, eligibility and monitoring reports — that will require integration. The timing of the creation of all four streams is crucial, he said. It’s an area, Klein said, where “we need a lot more work.”
McCormack joins with Progs on tax-the-rich plan
While most middle-class people are losing ground economically, the wealthiest Vermonters have seen their incomes grow, according to information from the Vermont Blue Ribbon Tax Structure Commission. On average, the well-heeled have seen a 7 percent average increase in personal income per year. Since 2002, people who make more than $200,000 per year have seen a 50 percent increase in their incomes, according to the report.
Rep. Chris Pearson, D-Burlington, cited statistics from the commission’s report as part of a pitch to the Legislature to consider raising taxes slightly on Vermont residents who fall in the top two tax brackets.
The top 5 percent of income earners in the state will save $190 million this year in federal income taxes as a result of the extension of the Bush tax cuts.
“Vermonters agree with the congressional delegation that the wealthy can pay more,” Pearson contended.
Pearson’s proposal is a 1.5 percent increase in the marginal rate for those in the highest tier, and a 1 percent increase for the next-to-highest tier.
Sen. Dick McCormack, D-Windsor, said asking the rich to pay more is part of the social contract. “It’s how we maintain a civil society,” McCormack said. “This is not eat the rich. You go where the money is.”
Under the proposal, the effective rate for people in the top tier would be 0.9 percent. On average Vermonters who fall in that bracket would pay about $10,000 more in taxes. The Bush tax cuts save $150,000 a year on average for the wealthy.
The bill, which will be introduced very soon, has 16 sponsors, according to Pearson. It would raise $17 million.
The governor and legislative leadership haven’t signaled support for the bill. “There is a growing realization that something has to give,” Pearson said.
Sen. Anthony Pollina, D-Washington, said the governor has been using “scare tactics” about the number of people who might move out of state if the income tax increases.
When asked if he felt like a turncoat to his party, McCormack said he supported Shumlin in the campaign, but lawmakers have an obligation to speak their own minds.
“We have three branches of government,” McCormack said. “This is not (an act of) disloyalty to the governor.”
Public Assets Institute, a nonprofit research organization in Montpelier, issued the following statement: “Vermont cannot continue to cut its way out of its budget problems. The Legislature needs to include new revenue as part of a balanced approach to balancing the budget.”
“We also hope,” the statement said, “the Legislature will follow through on the recommendations of the Blue Ribbon Tax Structure Commission. The commission proposed some sensible changes to the income tax, which should make it easier to understand. However, the rates recommended by the commission need to be adjusted to make sure the income tax, which is our fairest tax, continues to generate at least as much money as it does now.”
Mothers call for ban on toxic chemicals
A group of mothers, grandmothers and small children converged on the Cedar Creek Room in the Statehouse on Thursday to call on lawmakers to ban toxic cleaning products in schools. They cited scientific studies that show a correlation between the cleaning chemicals and a host of health problems, including asthma, cancer, developmental disorders and hormone disruption.
According to the Toxics Action Center, there are 80,000 chemicals in everyday products that have not been tested for safety to human health.
TAC was one of the six environmental and children’s groups sponsoring the press conference.
Maine and Washington have banned the sale of chemicals from common products, according to the center.
Bill H.349, recently introduced in the House, would ban the use of non eco-friendly cleaning products in schools.
