Many lawmakers and the Vermonters they represent have balked at the roughly $2 billion price tag for a universal health care system in Vermont.
Raising that amount of revenue is widely described as necessitating the largest tax increase in state history. The tradeoff would be that Vermonters would no longer pay private premiums for health insurance and access to coverage would be decoupled from employment.
However, several VTDigger readers have pointed out that the focus on the dollar amount of the tax increase is less meaningful if it’s not paired with the dollar amount Vermonters pay in premiums.
Earlier this year, the administration and the Joint Fiscal Office, which counsels the Legislature on financial matters, released a consensus estimate that Vermont would need to raise between $1.8 billion and $2.2 billion in taxes to pay for Green Mountain Care, as the program is known.
Lawmakers on both sides of the aisle have begun to show anxiety about where that money might come from.
Gov. Peter Shumlin recently backed away from a pledge to unveil a menu of tax mechanisms that could pay for Green Mountain Care, which has only served to intensify that anxiety.
In a recent analysis of health care spending, the Green Mountain Care Board determined that Vermonters spent $1.9 billion on private insurance premiums in 2012.
There is a two-year lag in collecting and analyzing health care spending data.
Michael Costa, the administration’s health care financing expert, said in an email that it’s important to note the cost of premiums is expected to rise annually.
The University of Massachusetts and Wakley Consulting Group report on financing Green Mountain Care estimates Vermonters premium costs will rise to $2.3 billion by 2017 — the earliest date when Vermont could possibly transition to a universal system.
The consensus cost estimate could change dramatically — either up or down — depending on policy choices by Legislature, Costa said, such as what will be included in the Green Mountain Care benefits package and at what rate the program will reimburse providers.
But right now trading private premiums for taxes appears as though it would be roughly even swap.
Of course it’s not that simple. The cost of premiums is not evenly distributed among the people and organizations that pay them, and the same will inevitably be true of any tax structure.
One of the major challenges, as the governor and his team has acknowledged, is divining a financing system for Green Mountain Care that is equitable.
Or as Shumlin has described it on numerous occasions, a system where people pay according to their ability and where all Vermonters have access to the coverage they need by virtue of residency.
If lawmakers want his administration’s two cents on how that can be achieved, he’s made it clear that’s a discussion that will have to wait for the next legislative session.
