Exclusive: Single payer financing likely to start with 8 percent payroll tax

Gov. Peter Shumlin intends to propose a combination of an employer payroll tax and an income-based contribution to finance single payer health care, according to sources with knowledge of the plan.

In the latest version of the proposal presented Nov. 19 to the governor and members of his Business Advisory Council on Health Care, the employer-funded payroll tax was pegged at 8 percent, according to multiple sources who asked to remain anonymous because council members had mutually agreed to keep their deliberations under wraps.

The Shumlin administration declined to comment for this report.

Gov. Peter Shumlin holds up a cell phone to emphasize the viability of the semi-conductor manufacturing business that takes place in Essex Junction. IBM announced Monday it would sell the division to California-based, Abu Dhabi-owned GlobalFoundries. Photo by Hilary Niles/VTDigger

Gov. Peter Shumlin. Photo by Hilary Niles/VTDigger

Shumlin’s 21-member business advisory council includes business leaders who own or work for large and small companies across the state. It was created in April 2013 to offer the governor guidance on health care reform.

Previous iterations of the plan presented to the council pegged the employer payroll tax at levels ranging from 6 percent to 9 percent. The income sensitive health care fee would be capped at the higher end of the income spectrum, the sources said.

The taxes would replace the current system of employer and employee paid insurance premiums.

They did not provide details of how the income sensitive fee or “public premium” would be structured.

Shumlin and other members of the administration have said the single payer proposal to be released on Dec. 29 or Dec. 30 will give lawmakers a range of options. It’s likely those options will involve a higher or lower payroll tax with a corresponding fee or premium.

It’s also likely that the fee will be reduced for people over 65 who are Medicare eligible and will only use Green Mountain Care, as the publicly funded program is known, for secondary coverage.

An 8 percent payroll tax would generate roughly $936 million, based on a calculation using a Department of Labor figure for gross payroll of $11.7 billion from calendar year 2012.

The state’s gross payroll amount only includes employers that are federally required to report their payroll, explained Sara Teachout of the Legislature’s Joint Fiscal Office.

It does not include employees of religious institutions, farms, medical residents and other categories exempted from reporting, which would increase the amount raised.

Teachout called the figure “a good starting point,” but she said the administration is likely to have adjusted it to account for groups not included in the DOL figure and to project the gross employer payroll in 2017, the earliest Vermont can implement the new program.

Estimates for the cost of single payer in its first year are at least $2 billion. If the payroll tax were to raise about half that amount, the income-based health care fee would need to generate about $1 billion as well.

The outline sketched by sources does not differ greatly from what outgoing Sen. Peter Galbraith, D-Windham, laid out last spring, in what he called the administration’s “notional financing plan.” He attributed that plan to sources within the administration.

At the time, Galbraith said Green Mountain Care would be financed through a premium graduated according to income, which would hit a ceiling of 9 percent for people with incomes of $50,000 or more.

The premium would generate about $1 billion, according a calculation by Galbraith. Combined with an 8 percent payroll tax, that would create revenue streams of close to $2 billion.

At the time, Galbraith said that in addition to a payroll tax, the administration was also considering a tax on gross receipts. Sources with knowledge of the business advisory council meeting did not mention a gross receipts tax in interviews with VTDigger.

The income sensitivity worked into the plan via the health care fee fits with Shumlin’s stated intention of equitable public financing, or people paying according to their ability.

The Benefits

The health benefit for Green Mountain Care is likely to be modeled after the gold plan offered through Vermont Health Connect, according to one of the sources.

There are three components of the benefit the administration has said it will present to the Green Mountain Care Board in the next two weeks. Those are the covered services and the level of cost-sharing — the percentage of medical costs people pay themselves.

All plans sold in the U.S. must provide 10 essential health benefits, and a waiver from the Affordable Care Act won’t exempt Vermont from that basic coverage requirement.

State law requires the Green Mountain Care Board to consider adding adult vision, dental, hearing and long-term care services and supports, but no additional federal funds would be available to cover those services.

Advocacy groups are likely to push for inclusion of those services and possibly others, such as homeopathic medicine or chiropractic care.

The state must also provide coverage that is at least as affordable as what’s offered by the ACA. The affordability of a health plan is determined by the level of cost sharing.

Green Mountain Care will include some amount of cost sharing at all levels, and that will take the form of co-pays, coinsurance or deductibles. That mix is still unknown.

People who are income eligible to pay at lower sharing levels on the Vermont Health Connect exchange will pay at no more than those levels under Green Mountain Care. The same is true for Medicaid beneficiaries who cannot pay more than they do now or receive less coverage under Green Mountain Care.

A gold plan has an actuarial value of 80 percent, meaning people with that plan pay for 20 percent of the costs associated with its covered services.

An 80 percent actuarial value is the lowest actuarial value state law permits for Green Mountain Care and it advises the board to consider an 87 percent actuarial value.

People on Medicaid will continue to pay for their coverage at a 99 percent actuarial value, meaning they are responsible for 1 percent of the cost. The income threshold for Medicaid this year under the ACA is $16,104 for an individual or $27,310 for a family of three.

Labor unions, including the Vermont State Employees Association, have said the benefit for Green Mountain Care should bring all Vermonters to their level of coverage.

The average actuarial value for state employee plans is 95 percent, according to a recent Pew study, and teachers and school staff have health plans with 94 percent actuarial value.

Those are considered high-value health plans and many will be subject to a 40 percent excise tax as part of the ACA, starting in 2018. The rest will be subject to the tax by 2023.

It’s unlikely Vermont’s ACA waiver would allow it to offer a high value health plan through Green Mountain Care without paying the tax.

That’s because one reason the tax was included in the ACA was to discourage such plans, which arguably insulate people from the cost of care and encourage overuse of health services.

The Process

The Green Mountain Care Board is responsible for approving the benefit package the administration will present them in mid-December. That’s a process that will take “months, not weeks,” board chair Al Gobeille said Thursday.

Lawmakers will weigh in on the benefit package when they are asked to make an appropriation to fund it. They could also pass laws mandating coverage of certain services or place thresholds on cost sharing.

The Legislature must also approve the financing structure for Green Mountain Care, a process that will begin when lawmakers see the governor’s proposal.

The Green Mountain Care Board is also responsible for determining whether the program will meet a set of triggers requiring that residents have coverage that pays at least 80 percent of medical costs; that the program does not have an negative aggregate impact on the economy; that its financing is sustainable; that it will reduce administrative costs; that cost-containment efforts will reduce the rate of growth in health care spending; and that health care providers are reimbursed at levels that allow the state to recruit and retain a high-quality health care workforce.

Finally, the state will need to renew its federal Medicaid waiver in 2017 to ensure that federal money can continue to be used flexibly. Vermont will also need a waiver to the ACA, which can’t be approved until 2017.

Neither Shumlin nor Democratic leaders in the Legislature have said what portion of the steps necessary to implement Green Mountain Care will be undertaken in the upcoming legislative session.

Morgan True

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  • Jennifer Simpson

    So how will this work for members of the Armed Forces who have Tricare coverage? I assume that we will not be paying for the coverage on top of what we already pay for our Tricare coverage?

    • Pete Novick

      Jennifer,

      I scrolled thru all the comments below and I don’t believe anyone answered your question regarding how Tricare would fit into this.

      It appears that Vermont plans to impose a new tax on income, up to 9%, to cover the state costs for the plan.

      • Willem Post

        Pete,

        The 8% Medical Payroll Tax will be paid by ALL households on a payroll. It COULD be 4% employee + 4% employer.

        In addition, the Medical Income Tax Surcharge will be paid by ALL households with gross incomes greater than $50,000, whether on a payroll or retired.

        Those who are retired, and over 65, will continue to pay for their Medicare + AARP. Supplementary!!!

        • Willem Post

          Pete,

          This a great plan for households with incomes of $50,000 or less, i.e., about 50% of all Vermont households.

          No only do they already get a big break on real estate (municipal and school) taxes (others have to pay more), but now also a big break on low-cost healthcare (others have to pay more).

          As no one has yet invented a free lunch, both breaks are subsidized by higher income households.

          Montpelier loves household making $50,000 or less, and is doing everything possible to bring the other households to that level; equalizing, communism, socialism.

          Did not work well in Russia, East Europe, Cuba, etc. Will not work on in Vermont either. Did people in Montpelier not study history and learned from it?

          • Harwant Sethi

            I’ll say this, as someone who doesn’t vote for one specific party or the other, and often not “Republican”, Willem, you are right on. Montpelier (especially Democrats and Progressives) are buying votes with all the handouts (the property tax breaks really get me – can’t afford your property tax – sell the place, like the rest of us will have to!).

            Also, don’t forget that if you were disciplined and responsible with your wage earnings , you also will be considered “rich” when you start drawing money from your 401ks or your IRAs (or wherever you built your retirement nest egg) and when you start collecting social security payments, you get taxed on that as well – unless in retirement, you are bringing in less than ~$50k a year.

            There is a mentality in Montpelier that is, if you have money, you are evil and you made your money off the poor, even if you broke your back working like a dog to make a decent wage. The “rich” people therefore ARE leaving Vermont and I fear it will just get worse.

  • Dan Carver

    How will this effect large self-insured and/or ERISA protected companies? Will there be law suits for this double taxation? Is there a contingency plan if we start losing our larger private employers? Or if they transfer many high paying Vermont based jobs to other states, such as Malta, NY as an example?

    In regards to state employee and teacher plans, do you really think the average tax payer is going to willingly pay higher taxes in order to cover penalties so public servants can have a better health plan than the non-government based tax payers?

    Just a couple of the many questions that will need answers before Vermont becomes Ferguson, MO.

    • Jamie Carter

      “How will this effect large self-insured and/or ERISA protected companies? Will there be law suits for this double taxation?”

      They can sue, but with the SCOTUS decision regarding the ACA it’s very very doubtful they win.

      • Jeanne Keller

        I’m not an attorney, Mr. Carter (I don’t know if you are or not), but I see no connection whatsoever between either of the two SCOTUS decisions on ACA and whether a state can impose a tax on an ERISA governed plan. That aspect of ACA was never part of either lawsuit. The suits were against the federal government and the ACA, not against a state tax like that being contemplated in Vermont. Congress determines what ERISA allows and doesn’t allow, and preempts state action that exceeds Congressionally-granted state authority over employer plans. Further, the ACA’s “waiver” provisions do not allow granting of waivers of any part of ERISA (or Medicare, or Medicaid). I believe your assertion could mislead people into thinking Vermont is already safe on the other side of the ERISA Rubicon. Please provide evidence of your blanket assertion. It will be news to me, for one.

        • Jamie Carter

          The government can enact a payroll tax on any business… they don’t even need a reason. When the mandate was named a “Tax” instead of a penalty that gave COngress free reign since they have the authority to tax anyone for pretty much any reason. Ergo, as it is a payroll tax, whether you are an ERISA company or not really is irrelevant, you are still going to get an 8% increase in your payroll tax.

          • Jeanne Keller

            You make my point, Mr. Carter. CONGRESS may have free reign, but not the State of Vermont. The lawsuit was about the federal government doing this, not about a state doing this. The latter situation invites a whole new lawsuit.

          • Jamie Carter

            Mrs. Keller how does the state’s ability to tax a person or business differ from the federal gov’t. Why is the state’s ability to impose a tax more limited?

            Thanks

          • Jeanne Keller

            Excuse me, Mr. Carter, but are you serious?
            OK. In case you are, it has to do with the US Constitution, and the federal statutes passed by Congress. I suggest you bone up on this basic stuff before making any more pronouncements about any state or federal laws.

        • Jamie Carter

          You may also be interested in this quote from Phyllis Borzi, Assistant Secretary of Labor for the Employee Benefits Security Administration

          “Clearly ERISA is not an impediment for states that choose to levy a fee or tax on all employers and to then use the funds to subsidize health care coverage expansions. In such a situation, the regulated entity is the employer, not the employer plan.”

          • Jeanne Keller

            The salient part of the quote is: “….to subsidize health care coverage expansions.”

            That is actually a different fact situation than imposing a tax to REPLACE an existing employer’s plan. Furthermore, prior SCOTUS rulings indicate there is potentially a limit to the level of taxation allowed per Ms. Borzi’s suggestion, before it “interferes with an employer welfare plan,” which is the governing language in ERISA for preemption.

            I still don’t think you’ve provide the rationale or evidence Mr. Cameron and I are asking for. (BTW, Mr. Cameron is a former Commissioner of Personnel for Vermont.)

          • Jamie Carter

            “That is actually a different fact situation than imposing a tax to REPLACE an existing employer’s plan.”

            No one is suggesting that a plan is replaced. A business is free to continue to offer their plan in addition to GMC.

            Its not included but the comment made but you may find it interesting that Mrs. Borzi’s quote was in direct reference to a single payer scheme.

            You can believe it or not, no skin off my back.

        • Jamie Carter

          “I’m not an attorney, ”

          … it would have been nice if you told me you were a lobbyist… I wouldn’t have wasted my time trying to convince you that your paid position was wrong. Lobbyist won’t / can’t admit they are wrong that’s their job… just look at Stannard, he still can’t and he’s retired.

          Anyways, good day. I’ve no use for lobbyist, doesn’t even matter what a person actually says, even when you make a point they just start arguing semantics.

          • Jeanne Keller

            I am no longer a lobbyist and haven’t been for several years. My position on this issue has been extremely consistent for dozens of years: let’s base health care reform on evidence, facts, not on hopes and dreams. And I hope you are as discerning about rejecting the lobbyists who gave you the misinformation you continue to parrot.
            So, you have a good holiday season, and get ready for the fireworks in January.

      • J. Scott Cameron

        The SCOTUS decision on the ACA has little or no bearing on the issue of taxing exempt ERISA employers for single payer. Perhaps you can explain the rationale behind your claim?

        • Jamie Carter

          When it was declared a tax that gave the government BROAD taxation powers. The legislature has the power to install a payroll tax, they don’t even have to say what it is for. They can tax you all they want… they already do.

          WHen the “penalty” was determined to be a tax that was the end of an ERISA pre-emption. The ERISA pre-emption prevents states from regulating insurance plan…NOT taxation.

          • Jeanne Keller

            Please see my replies to you at 1:38pm and 1:43pm posted above. You are just flat wrong, and it’s tiring to keep trying to correct your misinformation.

            The SCOTUS ruling on ACA applies to whether the ACA’s federal levy against employers is taxation. It had nothing to do with ruling on state taxation of employer plans. It was about the ACA, not about any state including Vermont.
            And your “interpretation” of ERISA is not what prior SCOTUS decisions on ERISA have ruled. The language in ERISA is not about preempting state “regulation” of employer welfare plans, it’s about preempting state “interference” with plans. What constitutes “interference” is what the lawsuit would ask the courts to decide. And that could regulation OR taxation.
            So, an ERISA preemption challenge to VT by a self-insured employer would be about, among other things, Vermont imposing a tax so great that it “interferes” with the employer’s ability to pay for and offer their own plan. So please would you stop posting that ERISA is not a barrier. There will be a lawsuit, It will be expensive. So add another $5 million or so to the cost of implementing a single payer for the legal defense fund….And please would you stop posting that ERISA is not a barrier.

          • Jamie Carter

            I’m sure that is what your employers are telling you to say… 8% is not a barrier, and while rulings have been less then conclusive thus far, for every time ERISA has been upheld it’s been shot down as well.

            So whether a challenge happens (I’m sure it will, someone is obviously paying you) and whether it actually succeeds is up in the air. Ergo, I’m not flat wrong, you don’t the outcome anymore then I do.

            Please however, refer me to those SCOTUS rulings on ERISA… or do you mean federal appeals courts…since they have made the majority of the decisions on the subject.

            And no I’m not going to stop posting. I’m not going to let a paid propagandist spread deceptiveness at will. And if you are already getting tired, I’d say you should find another job, perhaps in another state where you won’t be subjected to a payroll tax. Bob Stannard can argue his BS and semantics for weeks at a time without tiring of it.

  • Dave Bellini

    80% actuarial value is the lowest value allowed under the law. If the Digger “source” is correct and Shumlin wants 80% only…… That’s a “non-starter” as they say.
    I would be urging my follow union members to fight against it. I hope it’s not true.

    • Traven Leyshon

      Any attempt to impose a pathetic 80% actuarial value on Green Mountain Care should be seen for what it is – a “divide and rule” ploy to split union members with hard won health coverage (they’ve given up not only wages but also working conditions to keep their coverage) away from the rest of Vermonters who desperately need universal healthcare. Any proposal to limit GMC to an 80% actuarial value should be called out for being a cynical attempt to demoralize Vermonters who need universal healthcare.

  • Mark Moore

    Excellent report

    • Lance Hagen

      I will second that ….. excellent report, Morgan

  • Walter Carpenter

    “Is there a contingency plan if we start losing our larger private employers? ”

    What about if they come in because of GMC?

    • paul lutz

      They may come here, but they will not be working. Is that what you want Walter?

      You support for this disaster of a plan is amazing.

      What if the payroll tax was 20%, would you still support it?

      • Walter Carpenter

        “Your support for this disaster of a plan is amazing.”

        Why, thank you, Paul. Your non support of it is breathtaking:) When you say that “They may come here, but they will not be working,” do you mean the tourists who come here already? And a great many more people could come here who will be working. But the debate should be on those who are already here, working here now and who do not have, and cannot afford, health insurance here, despite the exchanges.

    • Why would a CEO (the decision maker for these sorts of things) who makes $250,000 per year in his/her household move into a state where her/his salary would be taxed $20,000 and income $22,500 (assuming the 9% cap in the article, although that would make raising 2-2.2 billion impossible) for insurance with an 80% actuarial plan likely requiring the purchase of supplemental insurance plus out of pocket expenses?

      That’s on top of paying an 8.8% income tax rate and a likely 5 figure property tax bill to live in a nice home in a nice neighborhood.

      Sorry, I don’t see a lot of intelligent, successful people signing up for this.

      • Bob Zeliff

        While it not clear what your are talking about.

        The 8% payroll tax for GMC is LESS than most employers now contribute to health insurance. Many pay much more. This would be very attractive to business.

        The 9% income tax you quote is from a Galbraith proposal months ago. He is not evan in government any more. You are confusing things again. Cherry picking to make seem bad.

        Please try to be more accurate.

        • Lance Hagen

          Bob,

          Do you have any data that supports your statement of “The 8% payroll tax for GMC is LESS than most employers now contribute to health insurance. Many pay much more.”?

        • Willem Post

          Bob,

          The 8% Medical Payroll Tax will be paid by ALL households on a payroll, INSTEAD of current premiums. The mandate COULD be 4% employee + 4% employer, which appears reasonable.

          But there is also the MEDICAL INCOME TAX, which will be paid by ALL households with gross incomes greater than $50,000, whether on a payroll or retired.

          Those who are retired, and over 65, will continue to pay for their Medicare + AARP Supplementary insurance, as well as pay the Medical Income Tax, if their gross income is over $50,000!!! This is highly unfair, because such people already have much greater medical expenses than the rest of the population.

          • Willem Post

            Bob,

            The 8% Medical Payroll Tax will be paid by ALL households on a payroll, INSTEAD of current premiums. The mandate COULD be 4% employee + 4% employer, which appears reasonable.

            But there is also the MEDICAL INCOME TAX, which will be paid by ALL households with gross incomes greater than $50,000, whether on a payroll or retired.

            Those who are retired, and over 65, will continue to pay for their Medicare + AARP Supplementary insurance, as well as pay the Medical Income Tax, if their gross income is over $50,000!!! This is highly unfair, because such people already have much greater medical expenses than the rest of the population.

        • Yes, the 9% CAP on income taxes is Galbraith’s, but the income tax is part of the plan described in the article. In fact, the tax will have to be higher than the 9% cap to cover the amount left over after the payroll tax. Are you saying there won’t be an income tax, Bob? If so, where will the state get 1.1 to 1.3 billion dollars?

          • Bob Zeliff

            Since the employers contribution seems to be defined as the 8% pay roll tax what remains is the individual premium.

            All the discussion so far is that the individual premium for GMC will be income sensitized and tailored to address Medicare recipients who already have very significant coverage which will not change. Those figures have not yet been “leaked”.

            Your allegation that it will be 9% across the board is blatantly miss leading.

      • Walter Cooper

        EXACTLY.

        We close on a house in MA in two weeks and will cease being Vermont tax residents Jan. 1.

        I increasingly think Single Payer is DOA, but not willing to gamble my family’s saving power on that.

        • Willem Post

          Walter,

          Make sure ALL the paperwork says Dec 31, otherwise they may nick you anyway.

          I know of a couple that moved to Florida and forgot their paperwork in order and got nicked.

      • Willem Post

        Robert,
        Those intelligent, successful households are not really wanted in Vermont, other than for fleecing them to pay for whatever Montpelier “initiative” comes along.

        • Willem Post

          …..And if they can’t fleece them, the Pols turn to Washington to get subsidies to make their “initiatives” happen.

          • Willem Post

            ….Except the Republicans control the US House and Senate and federal subsidies will be hard to come by, so the Montpelier POLS are back to fleecing the higher income households!!

    • Glenn Thompson

      Walter Carpenter,

      “What about if they come in because of GMC?”

      Why would they do that….if it is more expensive to do business in Vermont?

      • Walter Carpenter

        “Why would they do that….if it is more expensive to do business in Vermont?”

        Well, would it be more expensive to do business in Vermont? If you did not have to worry about health insurance, you would not have to worry about that gigantic expense.

        • Glenn Thompson

          Walter, it already is expensive to do business in Vermont! Wouldn’t this ‘tax’ add to the cost of doing business in Vermont??

          I don’t understand your reasoning in believing there will not be added expense for healthcare given the fact….the money will need to come from somewhere’s to pay for it! All the Fuzzy math in the world isn’t going to fix the fact….Vermont doesn’t have the financial nor the economic horsepower to get a Single Payer System off the ground!

          • Thomas Powell

            Glen, Please don’t encourage Walter Carpenter. He is a single payer true believer who dwells in a fact-free zone, full of socratic responses. It’s far better to just blip over his posts to someone who has an opinion (pro or con) worth reading.

          • Glenn Thompson

            Thomas,

            FYI, my discussions with Walter date back long before we both started commenting on this issue on Vtdigger. Walter is well aware…..I’m no fan of government controlled healthcare! Walter is also aware of the ‘nightmare’ I experienced when my adult son developed a rare eye disease that could only be properly treated by an out of state surgeon/physician. Walter is also aware, I had to get my state rep involved since dealing with GMC was like dealing with imbeciles. Nobody within the old GMC system knew what they were doing! Walter is also aware….I thought the Old Green Mountain Care system was the worst managed agency within state government. Walter is also aware my case went all the way up to the head honcho of the system only to be denied any benefits in helping out with the costs of the eye surgery and preventing further eye damage from the disease. Walter also knows….the $20K costs was picked up totally by my son’s parents. Walter doesn’t know….that $20k was the best investment I ever made. Not only did the out of state specialist save my son’s eyesight, the least effected eye was brought back to almost 20/20 vision! What Walter may or may not realize….without the parent’s support and the state’s refusal of coverage….my son would have become legally blind and most likely would feed off a government teat for the rest of his life! Walter may or may not know….healthcare managed by a government agency can also deny procedures due to any reason they wish! I wonder if Walter understand….if the government denies benefits…a patient has no other options to turn to! Walter probably doesn’t know…..my view of the old GMC system has changed. Compared to the $100 million dollar fiasco called Vermont Health Connect, the old GMC system wasn’t all that bad. Walter can assume, I have no faith in Single Payer getting off the ground for obvious reasons I have stated numerous time….but yet Walter and other Single Payer supporters can only focus on the Utopian belief Single Payer will lead to either cheap healthcare insurance and cheap medical care or free health insurance and free medical care. Given Vt’s economy and small population and limited financial resources and the inability of government to do anything right…..I can only conclude these people believe in wishful thinking and the tooth fairy!

          • Thomas Powell

            Glenn,
            Well played.
            Tom

    • Seth Henry

      Basic math shows that only low-wage employers would have an incentive to come here for effectively discounted health care. And even if our unproven HC system were enough to lure those types of employers we have other basic issues like lack of affordable housing and energy prices that would be a huge barrier when compared to places south of here.

      I seriously doubt you could find a real economist who could back up the assertion that this will bring jobs. I have no doubt you can find many, many economists who can tell you an 8% payroll tax could be devastating. I seriously hope our political leadership starts talking to experts and start ignoring the lobbyists who substitute hope for math. They won’t be able to un-ring this bell. It is clear from tax receipts our economy is not well. Even the suggestion that they consider something this foolhardy is irresponsible.

      • Cheryl Ganley

        Seth,
        Low wage employers seem to be the only ones that are coming here (i.e. new retail,hospitality, farm workers and home health aids) So I think your statements are spot on. As for the unaffordable housing that will go away too because their will be a glut of inventory for people who want out.

        • John Elliot

          It is already starting to happen. I read that this year Vermont was the only state in the country where real estate prices declined. I have seen more for sale signs than ever. A news reporter should investigate to see why so many Vermonters are trying to sell their homes.

          • Glenn Thompson

            John Elliot,

            My home in Essex sold in 2011. Property taxes at that time = $5000. Same property today, taxes = $5700. Any reporter should investigate the rapid rise of property taxes to get a good feel why many Vermonter’s are selling their primary residence!

  • Patrick Cashman

    “Shumlin’s stated intention of equitable public financing, or people paying according to their ability.” These are two different things.
    Equitable financing would be two different people who receive the same service or goods pay the same price. What the Governor is proposing is that those who make more (for whatever reason from idle inheritance to continuous hard work) pay more for the same service than those who make less (for whatever reason from grim circumstance to congenital work avoidance).

    • Jamie Carter

      Would you consider a 5% flat tax equitable? I would. I don’t think many agree with your assertion that equitable necessitates a whole dollar amount, a set percentage would also be considered equitable.

      • Patrick Cashman

        Jamie,
        That depends; does everyone receive exactly the same amount, type, and quality of service? Because if not then no, it is not equitable. Some are paying for the expenses of others. Now you can call that good or bad but by no stretch of the imagination is it equitable by any traditional definition. Unless of course we are leaping into a brave new world of Newspeak in which us oldspeakers unbellyfeel newspeak, and are doubleplusungood for VerSoc.

        • Jamie Carter

          Patrick… what the benefits are remains to be seen. When they are released we can have that discussion. For now, all we have is the payroll tax, which as long it applies to all businesses at the same % would be considered equitable. If there is an income tax (which there clearly will be) then as long as that is a %age it will also be equitable.

    • Kathy Callaghan

      The way to look at this is to take the entire pool of Vermonters and start subtracting.

      Medicaid recipients can’t be taxed. Medicare recipients can only be taxed a small amount since they will only get a Medicare wraparound from GMC. Taxing ERISA plans is in question. Federal employees can’t be taxed. How do you do a payroll tax on farmers?

      Once you remove those populations from the mix, the remaining Vermonters will have to come up with $1B in Year One, and more in succeeding years.

      That is a gigantic and impossible tax burden on hard working Vermonters – and arguably may be more than they would have to pay on the open market if Vermont had true insurance competition.

      In New Hampshire, their exchange had only one carrier in Year 1. But in Year 2, competition stepped in and residents can now select from a 5 carriers including Assurant, Harvard Pilgrim Health Care, Maine Community Health Options and Minuteman Health. Individuals have 40 plans to choose from, while small businesses will have 21. Premiums have come down because of competition.

      I’m not advocating for one thing or the other but I am saying that Vermonters cannot be expected to come up with an additional billion dollars in taxes every year. The Legislature should start looking at other forms of universal health care.

      • Jamie Carter

        “Medicaid recipients can’t be taxed. Medicare recipients can only be taxed a small amount since they will only get a Medicare wraparound from GMC. Taxing ERISA plans is in question. Federal employees can’t be taxed. How do you do a payroll tax on farmers?”

        I’m not sure where you are getting this information from? WHy can’t medicare recipients be taxed? WHy can’t federal employees be taxed? Why can’t companies that offer plans be hit with a payroll tax? The legislature has the power to tax the public for essentially whatever they want to… Just because you work for uncle sam doens’t mean the state of vermont can’t tax your income more…

        • Ralph Colin

          Great idea, Jamie, but let’s make it really easy.

          Let’s just turn over all our income to the governor and his buddies and let them give us a monthly allowance. Then they can take as much as they need to run the government and all its social programs and perhaps there will be enough left over so we can see an occasional movie and buy our kids an occasional ice cream cone.

          And after that, the Vermont State government can has with the Feds to ascertain how to settle with them over their claims on our income.

          Brilliant. That settles everything.

        • Ethan Rogers

          I believe she’s talking about laws regulating intergovernmental tax immunity. States may tax income paid by the federal government if the taxation does not discriminate against the employee because of the source of the pay or compensation. Basically, state employees can’t have their pay/compensation taxed at lower rates than federal employees.

        • Jeanne Keller

          Everything she said is backed up by evidence, MR. Carter. The original article states that state officials said that Medicare recipients will be taxed ONLY if they use GMC for their Medicare wrap, so the taxes collected from them will be minimal. The federal government won’t pay the payroll tax on their employees. States cannot tax the federal government. Federal employees, including military and civilian DoD employees won’t be covered by GMC (absent Congressional action to cover all federal and military employees except in Vermont – I can’t see that happening), so it would be a nasty fight to tax them the full amount when they don’t get the coverage. I’ve addressed the serious ERISA barrier to taxing self-insured employers (e.g. a multimillion dollar federal lawsuit that could take a couple years at least to resolve) in an earlier reply to you.

          • Jamie Carter

            You don’t read well…

            Where did I say there would be a payroll tax on federal employees?

            IF the state adds a 9% income tax then federal employees are going to pay that, as are medicare recipients. It will likely have an progressive tier to it, but they will pay it either way.

            I addressed your ERISA argument. You may not agree with my reasoning of that of the “experts”, but I don’t agree with you rational.

          • Glenn Thompson

            Jeanne Keller,

            “The federal government won’t pay the payroll tax on their employees. States cannot tax the federal government.”

            Makes one wonder how many ‘exemptions’ will be allowed for people and businesses, etc to opt out of the Single Payer system which was designed to include *ALL* Vermont residents?

      • Willem Post

        Kathy,

        The Gruber-Shumlin duet played a cruel Single-Payer hoax on the so-called “stupid” Vermonters.

        Gruber got fired by Shumlin after collecting a big fee.

        Will the legislature finally show some backbone and fire the Vermont ridge line destroyer?

        Any governor but Shumlin would be better for Vermonters.

  • Franky Boyd

    Great digging!

    Good thing the two big private industries in Vermont, software and captive insurance, has people that can do that work all over the world. At 8%, this will be a boon for the Cayman Islands (insurance) and easter Europe (software). I can hear the giant sucking sound of jobs flowing out of this state already.

    Good thing the Governor is “listening” to the outcome of this election. Here’s to hoping the legislature actually does instead.

    • Joyce Wilson

      Franky, Do not forget that it will not be just a 8% payroll tax as the other component is the additional income-based health care fee. Senator Galbraith estimated this at 9% when coupled with the payroll tax so perhaps in the 17% total tax range per middle and upper earner in Vermont.

      I agree with you that there will be a great sucking sound out of Vermont particularly the jobs that employ the middle and upper earners. Businesses can just go to another state.

      “If the payroll tax were to raise about half that amount, the income-based health care fee would need to generate about $1 billion as well…

      At the time, Galbraith said Green Mountain Care would be financed through a premium graduated according to income, which would hit a ceiling of 9 percent for people with incomes of $50,000 or more.”

      • Wendy Wilton

        A total tax of 17% (between payroll and income tax) is about what I predicted for most Vermonters in my financial model updated over a year ago based on the administration’s UMass report, so this trial balloon is unsurprising. It had to be this high to cover the people that don’t contribute or don’t contribute enough.

        We have to remember that that tax code generally addresses households. Most Vermonters live in a family setting, a minority are single person households. The median household income is well over $50,000 per year–more like $67,000 per year since many are two employee households. Therefore, most households will be subject to the 9% medical income tax cap.

        While federal and state income tax rates vary dramatically based on withholding status, let’s say an average VT household is paying 12% of taxable income for federal income tax and 3% for state income tax today. That’s about $10,000 per year in total income tax. With the added medical income tax that will increase to 12% each federal and state for a total of 24% of income, or $16,000 per year in income taxes. The federal tax subsidies which are currently applied to VHC premiums will go directly to the state and will not be seen by the ‘recipient’ under single payer.

        If a typical VT family will pay 24% of their earnings in income tax, 7% on FICA-Medi, 30% on housing costs, 15%for transportation (1 car loan or lease, insurance and fuel), 15% on food, and 5% on utilities, that leaves very little to pay for retirement savings, clothing, college tuition, a new car or family vacation. And if Rep. Tony Klein and VPIRG are successful in passing a carbon tax on gas and home heating fuel at the levels proposed this picture will get more dismal.

        It’s hard enough for middle-income people to get by in VT. To put greater tax pressure on working people to pay more for a benefit they generally enjoy through their employer today makes no sense. Further, to penalize a successful business owner to the point where they leave the state means there will be fewer jobs for the $67,000 household to pay the tax. How can the imposition of an additional income tax not impact the economy of the state and the ability of working Vermonters to remain?

        • Willem Post

          Vermont MEAN REAL household income was about $55000 in 2013. Just google

          • Wendy Wilton

            Willem, here’s where I got the median household income:
            http://www.vteconomy.com/PresentationArtWoolf2014.pdf
            See page 12 of the PPT…Woolf references the Vt Dept of taxes.

          • Wendy Wilton

            To be absolutely correct it’s median family income, not household, but my understanding is that it excludes single person households…so that would be the majority of Vermonters.

          • Willem Post

            Wendy,

            I googled.

            Here is the website.
            http://quickfacts.census.gov/qfd/states/50000.html

            Vermont 2009-2013, 5-yr average mean household income $54,267; US $53,046; both have not changed much these past 5 years.

            VT COL 120; US COL 100

            Taxes are NOT included in the COL index.

            VT per capita tax burden is in the top qtr of all 50 states.

            After about 20 years of a form of socialist-Democrat government, no wonder VT has begun to look so shabby, somewhat like East Germany in 1985.

            People all over Vermont just do not have the means anymore to keep things up, and there comes the straw that breaks the camels back……Single-Payer, a la Shumlin.

          • Willem Post

            Wendy,

            The NOMINAL is correct. See URL
            http://www.deptofnumbers.com/income/vermont/#family

            The above site also has REAL incomes and they reveal practically no change for 10 years.

        • Willem Post

          Wendy,
          The REAL median household income of Vermont was about $55000 in 2013.

          But the COL was 120, meaning 55000/1.2 = $ 45,830 is more realistic on a PPP basis.

          Also the COL does not include any taxes, so if a state ranks higher than the US average, as does Vermont, then that is a double whammy.

      • Willem Post

        Joyce,

        That great sucking sound will be in the more upscale areas, the ones where the households live that are paying the taxes in Vermont.

        Deficits anyone?

  • jason wells

    8 percent on top of the new pay per throw trash fees, last year’s and the upcoming prop tax increase, the upcoming bill for pre-k, and I am sure there will be a whole host of others. Realtor.com is showing some nice properties in Northern NH Thanks Shumlin for running me out of the State I love. My Family and I have worked very hard to call this State home and unfortunately we just cant continue to live this way. Looks like Shumlin is well on his way to making this State a playground for the elite. I can only imagine how things would be different if these cost increases were released BEFORE the election. Very very sad.

  • Scott Woodward

    I will be listening carefully at the end of the month to hear how the payroll tax and income based fee will affect those who are self-employed. A back of the envelope calculation suggests that about 42,000 Vermonters are self-employed (roughly 12% of the overall labor force). Implementing the quoted rates without some accommodation for the self-employed will be a huge problem. Some self-employed people could end up paying more than double than what they’re already paying under the ACA.

    • Willem Post

      scott,
      Doug Hoffer has some good number on employment in Vermont

      • Glenn Thompson

        I’m sure Doug Hoffer has some good numbers on the % of Vermonters who can only find low paying part-time jobs and also the % of Vermonters who are of Medicare age?

  • Senator Peter Galbraith

    The following is a link to my speech on the Senate floor last May describing the Governor’s financing plan and some of the issues it raises.

    http://peterwoodardgalbraith.wordpress.com/2014/05/02/remarks-to-the-vermont-senate-health-care-financing-and-the-public-option/

    As I point out in the speech, to raise $1 billion with graduated premiums based on income requires a 9% tax on incomes over $50,000 a year.

    No matter what we do, Vermont will have a multi payer system (GMC, Medicare, out-of-staters, ERISA, federal employees, Tricare, etc). I proposed legislation that would get Vermont almost as close to single payer as Act 48, but without forcing people to give up health care they like and for much less money.

    Under my amendment, every Vermonter could choose public option on the exchange. This would be a gold plan offered by a single provider and subsidized so as to cost less than a silver. Presumably almost everyone on the exchange would choose this plan.

    This public option would cost $350 million and I proposed paying for it with a 2.2% payroll tax and eliminating certain income tax deductions that primarily benefit high income Vermonters (and which most other states don’t allow). This is described in the speech for those who are interested.

    We can get to same goals of administrative savings and universal coverage without coercion and disruptive taxes contained the Governor’s proposal. It is worth considering.

    • Kathy Callaghan

      Finally some common sense. Instead of trying to force this square peg into a round hole, the Legislature should be looking at Senator Galbraith’s solution.

    • Willem Post

      Peter,

      That is what you proposed in your speech, but is not what is NOW proposed.

      It is total madness to propose $2 billion in taxes on Vermont’s economy that has a growing government sector % and a shrinking, less profitable, private sector %, and, overall, has hardly any REAL growth!!!

      Here are the REAL (inflation-adjusted) MEAN household income declines of the bottom 60% of US households:

      3rd quintile -8.4% since peak year in 2000
      4th quintile -11.1% since peak year in 2000
      5th quintile -15.9% since peak year in 1999

      Note: Taxes are excluded from the cost of living index.

      This website also shows how the top 5% of households has faired so much better than the rest.

      http://www.advisorperspectives.com/dshort/updates/Household-Income-Distribution.php

      Also see my below comment.

    • Moshe Braner

      Interesting idea, Senator Galbraith. But suppose it was implemented, then if over time more and more people dropped their current insurance arrangements and picked the “public option” on the Exchange instead, would that payroll tax rate need to be increased to cover the increasing number of such people? That may be fair though, in the sense that most of those additional people are currently provided insurance in a way that includes large contributions by their employers towards their premiums, and those will diminish as more people shift to the “public option” as individuals. So the large picture might be a gradual shift from employer-paid insurance to payroll taxes subsidizing the public option.

      But, why should non-payroll income be exempt from the taxation scheme? In principal, once the transition is complete, there should be no link between employment and health care. A payroll tax is really an income tax, since–like the current “employer-paid” premiums–it comes at the cost of wages being lower than they could have been. So why not call it what it is, an income tax, and collect it from everybody, on all income, including “capital gains”?

      • Senator Peter Galbraith

        You raise excellent points.

        My proposal builds on the existing structure of the ACA. Presumably many employers would continue to provide coverage. Over time, however, they may find it more attractive to increase wages and have employees enter the exchange where they would all presumably pick the Vermont subsidized public option. If demand exceeded available tax revenues, Vermont could either reduce the Vermont subsidy or raise taxes. but, unlike under the Shumlin plan, the state would not be automatically obliged to raise taxes in order to fund rising health care costs.

        My proposal does include an income tax component. It raises $70 million by eliminating certain deductions that mostly benefit high income tax payers and which most other states don’t allow. This introduces an element of progressivity into the plan as does the federal premium structure. Federal subsidies support the premiums of lower income purchasers of silver plans.

      • Kathy Callaghan

        Moshe, the so-called single payer plan will replace the Exchange; that’s the whole idea. The reason that the Governor and the legislature passed a little-noticed law forcing individuals and small businesses to buy insurance only through the Exchange, was to set it up for single payer.

        Vermont is the only state in the union that has eviscerated its insurance marketplace and mandated that people buy only through the Exchange. And ironically, that goes against the intent of ObamaCare, which was to offer a voluntary marketplace for insurance shopping.

        • David Dempsey

          Kathy,
          I couldn’t agree more. During the campaign for governor, the press took Scott Milne to task for not offering any ideas on the issues, such as the future of health care in Vermont. But Milne was very clear on his plan for health care for Vermonters. He said that single payer was DOA and Vermont should cut its losses on the failed health exchange and use the federal exchange. That would allow Vermonters to choose a plan from any of the numerous insurance companies available on that exchange, plans that are lower in price because of the competition. That would get rid of the ridiculous mandate in Act 48 that none of my 3 representatives admittecd they were aware of when they voted for the bill.

    • Wendy Wilton

      Senator, thank you for your work on this. Makes sense, especially within the constraints of ACA which is bound to be with us for sometime to come.

  • Scott Beaudin

    There has been much discussion about how businesses are already paying health insurance premiums at levels commensurate with the proposed payroll tax. This assumption ignores the stark reality that many small businesses have employees whose spouses work for large businesses or government which provide the insurance for their families, thus saving the small business owner that expense. I own a 6 person business and offer health insurance to all. Only myself and another employee take it. The other four have spouses that work for large employers and they get their insurance (better insurance) through that employer. This “savings” allows me to pay good wages and invest in growth. Imposition of an 8% payroll tax will increase my health insurance cost by nearly 300%. All of our employees are on profit sharing, which means we will all be getting a major pay cut due to this. My business is not unique. Many of our customers are small businesses and almost all have the same dynamic. The indiscriminant payroll tax will be a tremendous new burden for small business owners in the state. Beneficiaries of this will be the large employers who will no longer have to cover spouses, like the four who work at our firm. Policy makers need to take a very hard look at not only how much employers are paying into the insurance system now, but which employers are paying what. Small business is the economic goose of Vermont, and we would be wise not to further burden its ability to survive.

    • Walter Carpenter

      “This “savings” allows me to pay good wages and invest in growth. ”

      I know many small businesses in this same situation. The problem is that, while the small business pays nothing or next to nothing, the customers of the large business are taking the hit for the health insurance of the spouses who work in that small business. This is also the same for school districts, for example, where the taxpayer of the school district is picking up the freight of the insurance for the spouses who may work in small businesses which do not provide insurance as part of employment. This allows the insurer of the larger company to charge higher premiums to that large business, affecting the wages, etc. of that large business.

      “Policy makers need to take a very hard look at not only how much employers are paying into the insurance system now, but which employers are paying what.”

      I agree and am sure that it is being done. There are employers paying over 20% of their payroll for health insurance. And small businesses will not have to worry about providing insurance, either to get/keep good employees. As many a small business person (including me, as I used to run one years ago), has told me, this would be amazing.

  • Vermonters can’t run fast enough to get out of this state.

    • Jamie Carter

      By Darcie, hope you find comfort in some other state.

      • Dan Tuffley

        Jamie, I and many others have. Left last year, two upper middle income jobs, 3 small kids with us. People like me are smart enough to get out, leaving VT with more and more welfare bums. Eventually, even the rich people there won’t want to stay. Service jobs, welfare, and wealthy retirees are all that VT offers. Oh, and overpaid teachers for a shrinking student population. Gruber designed health care for the “stupid” voters of VT seems like irony to me.

  • James Rude

    “SINGLE PAYER FINANCING LIKELY TO START WITH 8 PERCENT PAYROLL TAX” The operative word here is “start”. Government projections of future costs to fund current benefits are notoriously inaccurate, underpriced and highly deceptive so as to mislead tax payers and gullible politicians to support false promises. Medicare is now approaching 10 times what the proponents anticipated what todays cost would be. ACA’s (Obamacare) funding was manipulated to come in below 1 trillion dollars in order to garner enough vote to insure it’s passage….less than a year later… SHAZAM, the price tag more than doubles. Medicare, also oversold with overly optimistic cost projects. Gruber was correct in his assessment of voters gullibility. Let us not make his assessment of voter intelligence come true in Vermont. In a private insurance markets, employers/individuals have the freedom to change plans if they become dissatisfied with their carrier. In a state run single payer program, individuals/employers will need to move to a new state.

    • Walter Carpenter

      “Medicare is now approaching 10 times what the proponents anticipated what todays cost would be. ”

      Well, don’t forget Medicare Plan D there, the one which prohibits Medicare from negotiating pharmaceutical prices with the pharmaceutical companies. This allows them to extort whatever they want. So, you have to add this cost into whatever the projections were in the past.

      “In a private insurance markets, employers/individuals have the freedom to change plans if they become dissatisfied with their carrier.”

      Having been through this before, I can verify that this freedom is not as total as it sounds. This so-called freedom is ruled by costs and availability. If an employer/individual cannot afford it, they are not going to get it. And what they get was often worse than what they lost. What is affordable? The useless high deductible plans. The ACA helps, but it is not much better. In a single-payer program, they would not have to worry about changing “plans.” And if they want to, for whatever reason, they can do it through the ballot box.

      • Glenn Thompson

        Walter Carpenter,

        “In a single-payer program, they would not have to worry about changing “plans.” And if they want to, for whatever reason, they can do it through the ballot box.”

        ….and there lies part of the problem! If one doesn’t like the Single Payer system, how it is managed, how much it costs…and other drawbacks of Single Payer….what other choices do people have? When I signed up for Medicare Part D when I turned 65….there were several options to choose from!

  • Bill Dunnington

    Great reporting – thank you, Digger.

    Looking forward to seeing the business case for the funding plan – how it won’t hurt the economy – its underlying assumptions – and a scorecard to track how things actually, eventually, sugar off in the Vermont economy.

  • Joyce Travers

    Comments like “according to multiple sources who asked to remain anonymous because council members had mutually agreed to keep their deliberations under wraps” do not instill public trust. If this bunch can’t even hold true to promises made to each other – what can we expect from them?

  • Mary Alice Bisbee

    As a long time supporter of single payer health care, I really disagree with this method of financing. There are far too many folks who do not fit into this payroll tax scheme of financing. A straight income based tax, based on a decoupled state income tax is the best way to go. It would take into consideration a person’s personal wealth or poverty and be much more egalitarian on a very personal level. It is high time that we decouple from the federal income tax standards and not tie health care to employment in any way.
    Having no deductibles, copays or coinsurance for those relying on GMC, totally, would also be far easier to manage; fewer administrative costs. We do not want to make the whole issue more complicated than it is already! This is the only way we can really save $$!

    • Wendy Wilton

      How else did you think VT would raise $2 million?

  • Tom Sullivan

    Pardon my ignorance folks, but if single payer is going to be ran/administered by a third party rumored to be Blue Cross Blue Shield, what exactly is going to prevent BCBS from asking for rate increases year after year? Are we to expect this 8% income tax to go up a percentage point year after year? Why don’t I like the sound of this?

    • Jamie Carter

      It’s an 8% payroll tax not an 8% income tax.

      The rate increase will be set by the GMC board as it is now…BCBS will have little to do with it.

      Further it is likely the state will set rates to some degree to control costs.

      It’s hard to say, but it’s worth hearing the plan before getting to outraged over it.

      • Willem Post

        Jamie,

        Payroll tax PLUS income tax.

        See my below comment!!!

        • Jamie Carter

          No kidding Willem… really a payroll and income tax portion.. great scot… alert the media.

          You said it was an 8% income tax, I corrected you. I am aware that there will be an additional income tax portion as well. As their should be. Currently employers pay in the neighbor hood of 1.3B towards insurance premiums and individuals pay another 1.7B in premiums + OOP expenses.

          Don’t you think their should be an income portion as well to represent those premiums that no longer will be paid?

      • It’s an 8% payroll tax AND an 9% income tax! (and something else, cuz that won’t cover it, plus 20% out of pocket, and likely the need buy a supplemental insurance policy.) Terrific!

        • Jamie Carter

          Actually Rob you don’t know what the income tax portion will be… unless your the leaker…

          You also do not know the Actuarial, 80% is the minimum possible, no one said that’s what it would be that I read.

        • Willem Post

          Robert,

          Let us call it Medical Payroll Tax (8%) PLUS Medical Income Tax (about 9%) on household incomes greater than $50,000, whether on a payroll ,or retired with Medicare+ AARP Supplementary.

      • Kathy Callaghan

        Jamie, are you perchance Peter Sterling in disguise? You don’t seem to be able to find one thing wrong with this debacle that has red flags all over it.

    • J. Scott Cameron

      Rates don’t go up because an insurance company asks for them to go up. They go up when more money is needed to pay the claims. There is no such thing as health insurance. There are only the claims and the money needed to pay the claims and the money needed to administer the payment of those claims.

      • Jamie Carter

        Actually there is also a reserve that needs to be kept which continues to go up… so most of the increases actually have a lot to do with those reserves.

      • Kathy Callaghan

        Absolutely correct.

    • Jay Prescott

      Perfect, this would result in an end to the BCBS ads on TV enticing us to join their organization that already insures the majority of the Vermont eligible’s. Why not have them donate their communications and advertising budgets now to help defray the costs of single payer implemenation?

  • Willem Post

    Franky,

    No wonder Democrats waited until after the elections to release this bombshell onto Vermont’s already-struggling households and businesses. A Republican governor would have been elected and even more Democrats would have lost seats to Republicans.

    Montpelier folks are on a socialist, single-payer, egotrip, led by the governor, to solve the “healthcare problem”, just as they came up with the state centralizing the financing of public education to solve the “education problem”.

    Solving the “healthcare problem” apparently involves imposing NEW taxes of $2 billion PER YEAR, for starters!!!

    Medical Payroll Tax to raise about $1 billion:

    This tax will be in addition to the present payroll taxes, such as the FICA taxes, etc.

    The NEW, additional tax will be 8% of Vermont’s $11.7 billion payroll to raise $936 billion per year. Vermont’s total payroll is much greater, about $18 billion, but the difference, $6.3 billion, is exempt for various, more or less nefarious, reasons. Legislators should look into the $6.3 billion exemption.

    Medical Income Tax to raise about $1 billion:

    For starters, the tax will not apply to households with annual incomes of $50,000 or less. The tax is imposed to adhere to the principle of “ability to pay”, says Shumlin.

    The tax RATE will start at some number for households with incomes greater than $50,000, and the rate will be capped at 9% for the incomes greater than $50,000. That means about 50% of all Vermont households will pay the tax. Remember, this new tax is in addition to any income taxes they already pay, PLUS in addition to the above new Medical Payroll Tax.

    Let us take a 2-person household, both retired, well over 70 years old, with a GROSS household income of $200,000, and assuming the 9% cap applies to that gross income.

    Existing annual state income taxes about $11,000
    Medicare premium $104.50 per month per person, doubled because of high income, $5,016 in 2015
    AARP supplementary insurance $100 per month per person $2,400 in 2015
    NEW Medical Income Tax 9% of $200,000 = $18,000 PER YEAR

    The outcome will be such 2-person households will escape to less-socialist, “tax-happy” states.

    • Irene Stewart

      Willem, I think you have not calculated the AARP supplemental insurance correctly. My husband and I each pay AARP/United $168.00 per month not $100.00. I certainly do not want to have anything to do with the GMC. We will continue to pay AARP, as there are no deductibles or co-pays with our plan. But I do not think we will have to worry about this, as I cannot believe that ANY legislator will want their constituents to be faced with taxes as described above in several comments. If a legislator votes for this, he will not be a legislator in two years! So many Vermonters already claim Florida as their permanent residence, living there 6 months and 1 day, to avoid all these Vermont taxes. More will flee, and those that remain will pick up the difference. Not a good omen for Vermont.

      • Willem Post

        Irene,

        Our AARP supplemental insurance premium, $194.44 for 2 people, is deducted from my checking account.

        I rounded that up to $200/month, or $2,400/yr, in my comment.

        That your number differs may be due to coverage differences.

        In my above comment, I did not mention Hartford property taxes (municipal and school) of $10,500 in 2014, due to increase at least 5% in 2015.

    • Rory Malone

      This is the math that scares me. With my property taxes rising, I cannot accept a blanket 9% tax increase on my income.

      • chuck gregory

        Springfield’s 3,000 homeowners stand to see a reduction in property taxes, according to the retired town manager, of $500 million if a single payer system goes into effect. For many of them, that would more than offset a 9% increase in their payroll tax, and definitely in their income tax.

        • Willem Post

          Chuck,
          You better ask that town manager to show his calculations!!

          • Cairn Cross

            yes Willem especially since by my math $500,000,000 divided by 3,000 homeowners equates to approximately $160,000 per household.

  • Willem Post

    Solving the “healthcare problem” apparently involves imposing NEW taxes of $2 billion PER YEAR, for starters!!!

    Medical Payroll Tax to raise about $1 billion:

    This tax will be in addition to the present payroll taxes, such as the FICA taxes, etc.

    The NEW, additional tax will be 8% of Vermont’s $11.7 billion payroll to raise $936 billion per year. Vermont’s total payroll is much greater, about $18 billion, but the difference, $6.3 billion, is exempt for various reasons. Legislators should look into the $6.3 billion exemption.

    Medical Income Tax to raise about $1 billion:

    For starters, the tax will not apply to households with annual incomes of $50,000 or less. The tax is imposed to adhere to the principle of “ability to pay”, says Shumlin.

    The tax RATE will start at some number for households with incomes greater than $50,000, and the rate will be capped at 9% for the incomes greater than $50,000. That means about 50% of all Vermont households will pay the tax. Remember, this new tax is in addition to any income taxes they already pay, PLUS in addition to the above new Medical Payroll Tax.

    Let us take a 2-person household, both retired, well over 70 years old, with a GROSS household income of $200,000, and assuming the 9% cap applies to that gross income.

    Existing annual state income taxes about $11,000
    Medicare premium $104.50 per month per person, doubled because of high income, $5,016 in 2015
    AARP supplementary insurance $100 per month per person $2,400 in 2015
    NEW Medical Income Tax 9% of $200,000 = $18,000 PER YEAR

    The outcome will be such 2-person households will escape to less-socialist, “tax-happy” states.

  • Jamie Carter

    “The NEW, additional tax will be 8% of Vermont’s $11.7 billion payroll to raise $936 billion per year. ”

    That was the example, the other 6.3B isn’t exempt, it’s just not in the DOL reports and so was not used in Diggers’ calculation.

    “Remember, this new tax is in addition to any income taxes they already pay, PLUS in addition to the above new Medical Payroll Tax.”

    It will also elimnate the $1000’s in insurance premiums for those people who work.

    “assuming the 9% cap applies to that gross income.”

    It doesn’t… the state has always used the federal AGI, meaning after any deductions and exemptions.

    “The outcome will be such 2-person households will escape to less-socialist, “tax-happy” states.”

    Sweet, if all the old people move then the states health care costs will plummet.

    • Chris Lewis

      That is what I plan to do. Vermont is already expensive, this would make it by far the most expensive state to live in.

      It is a real shame what Shumlin is doing to my home state.

      • Willem Post

        Chris,
        In addition to destroying ridge lines with his ill-fated 459 ft high wind turbines.

        Klein said he does not see another wind turbine go up in the Northeast Kingdom for at least 10 years.

    • Ralph Colin

      For those of you who have managed to slog this far through this Jamie Carter virtual monologue, I am informed that Jamie Carter is either the pseudonym of Gov. Shumlin or his alter ego.

      Nobody else would find the balls to have an answer – a right one or wrong one – to every question or claim put to him. He is undoubtedly the state’s foremost authority on just about everything.

      Go figure.

      • Jamie Carter

        Thanks Ralph. Just doing my part to put the minds of Vermonters at ease. GMC is coming…start getting used to the idea.

        • Kathy Callaghan

          There’s nothing about single payer that will put Vermonters’ minds at ease, JamieC! Quite the contrary, in fact.

        • Willem Post

          Jamie,

          Based on over 100 comments,

          Only about 20% are for,
          About 80% are against, and all riled up.

          The people have spoken.
          No single payer.
          Bureaucrats must find something else to keep busy.
          The state already has deficits for THIS fiscal year and bigger deficits predicted for next fiscal year.

          • Bob Stannard

            This echo chamber hardly constitutes an accurate poll.

          • Jamie Carter

            The last poll says a majority of Vermonters wanted single payer… It is dated at this point, but it is what it is.

    • Willem Post

      Jamie,

      “It will also elimnate the $1000’s in insurance premiums for those people who work.”

      But it will NOT eliminate the $5,016 for Medicare, $2,400 for AARP Supplementary and $18,000 of Medical Income Tax, for the household mentioned in my comment.

      What is the solution for those TAX-PAYING households? Move out of state?
      Would that not REDUCE state and local tax collections?
      Would that not cause businesses to move out of state and not come here?

      Take a 360 degree view, instead of a tunnel view.

      Vermont’s business climate is POOR.

      Vermont’s Cost of Living index is 120, US COL is 100; it does not include the effects of taxes!!!

  • Walter Carpenter

    “Remember, this new tax is in addition to any income taxes they already pay, PLUS in addition to the above new Medical Payroll Tax.”

    Perhaps, but we’re already paying more in health premiums.

    • Willem Post

      Walter,

      Should a higher income household, 2 retirees, give up Medicare and AARP Supplementary and sign up with a state program and pay $18,000 per year in ADDITIONAL income taxes, because Shumlin says the program is based on “ability to pay”?

      • Walter Carpenter

        “2 retirees, give up Medicare and AARP Supplementary and sign up with a state program and pay $18,000 per year.”

        Will, for one, will they actually pay 18k a year? Two, how much are they paying now for this “supplementary?”

        • Willem Post

          Walter,

          AARP $100 per month per person, or $2400 in 2014 for 2 people, IN ADDITION to Medicare of $104.50 per month per person, doubled to $209 per month per person per, because of high income, or $5016 for 2 persons in 2014.

          Something to look forward to when YOU retire.

    • Jon Corrigan

      Don’t include me in your ‘we’re already paying…’. You could have done what I did for over 25 years Walter, but you wouldn’t have lived in one place for more than 18 months. We all made our choices and now is not the time to change the rules for those who sacrificed for the benefit of the rest of society.

      • Walter Carpenter

        “We all made our choices and now is not the time to change the rules for those who sacrificed for the benefit of the rest of society.”

        Jon, I do not follow you here. What is it that you did? What were the choices that you made? Are you talking of the military?

  • J. Scott Cameron

    Governor Shumlin promised not to implement single payer on the backs of employers. In fact, he promised to de-couple health insurance from employment.

    Public sector employers would be glad to pay only a 9% payroll tax if they could get out of the burdens they currently face (health care costs in the range of 25% – 35% or payroll for teachers; 40% to 50% for municipal workers like police, fire and DPW). But many if not most of small employers (wake up, the Vermont economy is based on small employers) can’t even afford to offer health care at the present time, or if they do, they offer a lot smaller subsidy that 9% of payroll and they offer plans which may well be rated at less that 80%. Small businesses will be crushed by a payroll tax of the magnitude proposed. And the % proposed is probably inadequate to fund Single Payer anyway, especially if coverage is linked to the 94% or 95% rated plans currently enjoyed by teachers and state employees. And then employers will have to deal with the 40% federal penalty tax as well in 2018.

    Put the True Believers in front and full speed ahead!

    • Annette Smith

      Thank you for that comment. I was wondering if I was imagining that the plan was supposed to decouple health insurance from employment. I do not understand the desire to tie health insurance to employment.

      Based on my recent experience with the medical system and the Vermont Health Connect high-deductible insurance programs, by 2017 many Vermonters may be in the same boat I am, incurring extremely high bills (for something as simple as a fecal test that can be done by a veterinarian for less than $100 I now owe $1038) which go unpaid. Doctors and hospital are going to have to spend a lot of money on collection as unpaid bills mount.

      From now on when I go to the doctor I am going to ask what the cost is going to be — up front. Of course nobody can provide that. Which is one of the things that makes this whole system ridiculous.

    • Willem Post

      J. Scott

      “Public sector employers would be glad to pay only a 9% payroll tax if they could get out of the burdens they currently face (health care costs in the range of 25% – 35% or payroll for teachers; 40% to 50% for municipal workers like police, fire and DPW).”

      Any examples? Do you know any policemen who pay that? Any sources for your numbers?

  • Judith McLaughlin

    My heart goes out to all Vermonters.

    What happens 5 years down the road when most middle to upper income have fled….both physically and tax-wise. When small businesses have disolved because they can’t afford this. When large businesses just fail to see the economic “attraction”.

    Montpelier has never, and I mean never had the ability to project any more than 2 years out.

    Gruber was so right. The American taxpayer is stupid. All those that supported this were the ones to benefit. What they didn’t see (or couldn’t see) was the ability of those who don’t…..to leave.

    I’ll give them a projection. I will take my 6th generation, educated, middle-income Vermont family elsewhere.

    Figure that into your calculations.

  • Jim Pippen

    So I make $71,000 a year at my job, I pay roughly $2400 a year in premiums for my health insurance, my employer pays roughly an equal share, which get’s me fairly decent coverage. $2500 deductible, 100% coverage after that. Shummy wants to up my healthcare coverage cost to $6400 and do the same to my employer? NO FREAKING WAY. YOU PEOPLE ARE OUT OF YOUR MINDS IF YOU THINK WE ARE GOING TO STAND FOR THAT KIND OF WEALTH CONFISCATION!!

    • chuck gregory

      I had a very nice job that paid $41,300 yearly. The health insurance was 6%, or $2,478 annually. Had it gone up to 8%, it would have been $827 more. For $2,478 I got very nice coverage that lasted as long as I had my job. For $827 more, I would have had coverage that would have continued even after I would have been let go because I was too sick to work any longer.

      That is the bargain of the century, and one that every Vermonter deserves, when you consider that half of us make less than $42,000 a year.

      I now make $12,000 a year more than I need, and people in my position not only can afford an increase in taxes (both payroll and income, but don’t get me started on why!), but I think most of us believe in taking care of one another because it’s the right thing to do. We like to live in a state where people believe in that value.

      • Willem Post

        Chuck,

        $41,300 household income/yr is near the lower end of the scale.

        You will benefit from Single Payer, and you already pay almost no real estate (municipal and school) taxes and income taxes, because of OTHER government benefits.

        Way to go Chuck. More power to you. You have the systems licked.

    • Willem Post

      Jim
      How to to figure the $6400.

      8% payroll tax + x percent of ($71,000 -$50,000)

      I think x is not yet known.

  • Bill Gardyne

    Without a doubt, Peter Shumlin has his eye on Pat Leahy’s Senate seat that he hopes to occupy when it becomes available. With the details of GMC coming to light and MANY true believers beginng to realize what was promised won’t be coming, we can only hope this fiasco ends Shumlin’s political future.

  • Neil Gerdes

    I am in favor of something being done about medical insurance, but this is too big for a small state to handle. It’s a cluster**** waiting to happen. Don’t want.

    • chuck gregory

      Iceland and Malta are both smaller than Vermont and have universal health care coverage. Malta quite openly states, “You pay for it with your taxes, and when you need it, it’s free.” No shame there! Vermont’s per capita State Domestic Product is greater than the GDP of France, which has the best medical system in the world (in terms of both cost per person and health outcomes). Vermont can do at least as well as any of those countries and the other 160 which are poorer than Vermont.

      • chuck gregory

        correction: that should be, “the per capita GDP of France.”

        • Walter Cooper

          Vermont doesn’t have international borders with NH, MA, and NY. People and capital will flow out. They already are.

      • Jon Corrigan

        Have you ever been to Malta, Chuck? I have and it may surprise you to learn they actually protect their borders and citizenship means something. One can’t just move there and get ‘free health care’; the chances are quite small you’ll ever get citizenship in Malta.

      • Willem Post

        Chuck,

        Do you know the cost per capita to provide Malta level healthcare?

        • John Greenberg
          • Willem Post

            John,

            From the same website, the US $8,233/capita, by far the highest in the world, and not covering 10s of millions!!

            To compare the US with Malta is lunatic. Why not compare it with East Ukraine, which would be equally lunatic?

  • Keith Brunner

    Here’s the response from Vermont’s Healthcare is a Human Right campaign (below). A summary of what we’re proposing is available here: http://www.workerscenter.org/sites/default/files/hchr_finance_1pager.pdf

    “The Healthcare Is a Human Right Campaign urges the Governor to refrain from financing healthcare reform through a massive cost-shift to workers and patients. Vermont cannot afford to reduce the contributions of big businesses to our healthcare system. We remind the Governor of the legal obligation, set out in Act 48, to finance healthcare in an equitable way, based on ability to pay. It is unconscionable to make workers, low and middle income individuals, and small businesses shoulder the burden of paying for a healthcare system that is supposed to be a public good shared equitably by everyone.

    The Healthcare Is a Human Right Campaign is deeply concerned about a report in the VT Digger (“Single Payer Financing Likely to Start with 8 Percent Payroll Tax, Dec. 4, 2014), which suggests that Governor Shumlin’s financing proposals will dramatically reduce large businesses’ healthcare contributions, with a flat payroll tax of 8% raising less than half the total amount needed for the new system. Large businesses currently spend around 20% of their payroll costs on healthcare premiums, contributing around three-quarters of premiums costs of all privately insured residents. The Campaign is concerned that a flat payroll tax, combined with a proposed individual healthcare “fee,” would entail a huge cost-shift to workers and small businesses. Paying for over half of the system costs through an “income sensitive healthcare fee” on individuals, capped at the high end (as reported in the VT Digger), would benefit both large businesses and the wealthiest Vermont residents, who would pay proportionally the same as middle income earners. Unearned income, assets and other wealth would be exempt, yet the poorest residents would be subject to premium or fee payments.

    The Healthcare Is a Human Right Campaign opposes any financing plan that creates exemptions for high income earners and wealthy individuals, as this directly contradicts the principle of equity. Moreover, the Campaign objects to charging “premiums” or “fees,” which are private payments that perpetuate the current insurance system, and fail to establish a publicly financed healthcare system, paid for through equitable taxes.

    The Campaign reminds elected officials that how the healthcare system is paid for also has significant implications for whether people can get access to care. We are deeply concerned that the proposed low-value health benefits, also reported in the VT Digger, would adversely impact people’s access to care, and lead to a further cost-shift to those who can least afford it. Any healthcare system that requires individuals to pay up to 20% of healthcare costs out-of-pocket will force people to forgo needed care. Deductibles and co-pays place the burden of paying for our healthcare system on sick people, pushing patients into debt. When combined with a private fee or premium, 20% cost-sharing constitutes an unprecedented and unconscionable cost-shift to patients, workers, and all low- and middle income Vermont residents.

    The people of Vermont desperately need a universal, publicly financed healthcare system that enables everyone to get the care they need and contribute what they can. Such a system can only work if it is financed publicly and equitably, and if it provides all needed care, without cost barriers. The Healthcare Is a Human Right Campaign urges the Governor to put forward proposals that meet the human rights principles in Vermont law. We represent thousands of Vermont residents, and we are ready to fight for a plan that is universal, equitable, and works for all people.”

    • Bill Gardyne

      So there you have it…..Absolutely nobody is now thinking Peter Shumlin has the answer to Vt’s healthcare future… The right never believed him and now even the ultra-lefties are beginning to see the light..

  • Wayne Andrews

    We came into this world with nothing and your leaders are going to make sure you are going to leave it with nothing.
    Why does the name Margaret Thatcher come to my mind now?

    • chuck gregory

      Because she’s the one whole stole the milk from Britain’s babies?

  • Marxism always has and always will fail. Just wait and see the breed of monster this produces.

    • Walter Carpenter

      “Marxism always has and always will fail. Just wait and see the breed of monster this produces.”

      For what it is worth, a Marxist nation has surpassed us in economic output now and is also one of our largest creditor nations: communist China

      • Carl Werth

        “For what it is worth, a Marxist nation has surpassed us in economic output now and is also one of our largest creditor nations: communist China”

        But what if China is not Marxist?

        • Jon Corrigan

          What if China isn’t even Chinese?

        • Walter Carpenter

          “But what if China is not Marxist?”

          What if it is?

          • Carl Werth

            What if it isn’t (x infinity)?

          • Paul Lorenzini

            Chairman Mao is smiling like Barry O.

      • Glenn Thompson

        China currently has a population of 1.4+ billion people! Did you think of factoring that in when you made that statement?

    • Walter Carpenter

      ” Marxism always has and always will fail. Just wait and see the breed of monster this produces.”

      Is medicare Marxist?

      • Glenn Thompson

        “Is medicare Marxist”?

        Using a Hillary quote! “What difference does it make”?

  • Ron Avery

    Don’t worry about Shumlin breaking promises, he’ll just put on that sappy sad face and tell how it couldn’t be helped or some other stupid excuse.

    He thinks Vermonters will actually believe him, he’s probably correct, just like Gruber is just mis-understood looking out for the little guy sort of fellow.

    If he doesn’t the legislature will because we can be “first in the country” to do whatever. Not a good excuse to pass any bad bad law, but it will get done.

    And then, now we are hearing the whining about the cost of prescriptions so the circle is complete.

    • Irene Stewart

      What happens to senior citizens who continue having Medicare AND their own private secondary insurance? Will they be forced to pay the 9% tax on their retirement income? These seniors have nothing to do with GMC, and will not use one dime of the monies collected for health care claims.
      This proposal is going nowhere, as Vermonters cannot afford this, along with extremely high property taxes. The education tax is forcing many people to move out of Montpelier, and many young couples with children cannot afford to move in here, due to the property taxes. Are people going to have to choose between having healthcare coverage or having a roof over their heads? Vermont does not have the population to pay for all of
      these proposals. The Legislature needs to say No forcefully.

      • Jon Corrigan

        We need to hit this State with a few thousand lawsuits at the same time.

  • David Van Deusen

    Vermont, like much of the industrialized world, needs to treat healthcare as a basic human right. All Vermonters need to be provided healthcare. When we enact a VT based single payer system, we need to also make sure that the scope of coverage is adequate for working families. That is why this new public healthcare system should reflect the same values and scope of coverage already experienced by State employees.

    • Joyce Wilson

      David, The state employees’ and teachers’ plans will soon have a 40% Cadillac tax put on their generous plans under stipulations of Obamacare. Are you suggesting that Vermonters can afford a 40% Cadillac tax on top of the 8% payroll tax and then an additional income sensitive based premium? Taxes of over 50%? It seems very doubtful that Vermont’s single payer will have the State employees’ or the teachers’ plan.

      Morgan True mentioned this in the article…”Those are considered high-value health plans and many will be subject to a 40 percent excise tax as part of the ACA, starting in 2018. The rest will be subject to the tax by 2023.

      It’s unlikely Vermont’s ACA waiver would allow it to offer a high value health plan through Green Mountain Care without paying the tax. …”

      Thanks to the excellent reporting of Morgan True.

      • Willem Post

        Joyce,

        Starting in 2018, companies that provide health insurance that costs more than $10,200 for an individual or $27,500 for a family will have to pay a 40 percent tax.

        Do state employees and Vermont teachers have such plans? If so, it is truly remarkable. No wonder education expenses are off the charts.

        What are their co-pays?

    • Amanda Higgenbotham

      When the only people left in the state, David, are those receiving something from the system at little to no expense, how long do you believe that can last? For an example you may understand, look at the history of Detroit.

      • Walter Carpenter

        “For an example you may understand, look at the history of Detroit.”

        Are you including the disastrous mismanagement of the auto industry there, and so much of its industry which was dismantled and shipped overseas?

        • Joyce Wilson

          Walter, Amanda perhaps was referring to the unfunded health care benefits of retirees in Detroit. Look at this pie chart (#2) that was on Huffington Post. $5.7 billion to $6.4 billion for post-employment benefits ( health care costs for retired workers). Both state workers and state employees in Vermont, should ask the question if too many middle and upper earners pull out of Vermont with the single payer taxation, who will fund both their current and their long term retiree benefits?

          “…This chart from the Huffington Post tracks where Detroit’s debts came from. It shows that around half of the city’s obligations are worker-related, counting up pension-related obligations and retiree health benefits.

          Bankruptcy doesn’t save a city from basic fiscal problems, of course; it’s primarily an issue of debt. Many of the holders of that debt will end up receiving much smaller payouts than they were anticipating. And the city is hoping it can stave off those huge future bills on the retiree side by taking big steps like stopping providing health benefits to retirees.”

          http://www.vox.com/2014/9/19/6117633/detroit-bankruptcy-explained-questions

        • Amanda Higgenbotham

          No Walter, I’m talking about what 50 years of democrats and progressives did to Detroit, which was once this country’s most prosperous city.

          • Walter Carpenter

            “No Walter, I’m talking about what 50 years of democrats and progressives did to Detroit, which was once this country’s most prosperous city.”

            Amanda, and what did 50 years of democrats and progressives do to Detroit that were not done to it by the automotive industry? The democrats/progressives had to pick up the pieces when the automotive industry went overseas or wherever, leaving those who could not leave to fend for themselves.

        • John McClaughry

          It wasn’t the auto industry that destroyed Detroit. It was corrupt politicians, public employee unions, and big government. If you’re interested, see my review of Lewis Solomon’s Detroit: Three Pathways to Revitalization , including several similar works quoted therein, at http://reason.com/archives/2014/06/27/reanimating-detroit

    • Willem Post

      David,

      Vermont is presenting itself as a socialist, subsidize-everything, state that is mostly NOT a part of the modern industrialized world, at least not economically.

      Near-free medical care for low-income people already exists in the US. It is called Medicaid. Vermont should maximize its participation in the program and stop sticking its nose into the rest of it.

  • Dave Bellini

    Vermont is a state not a nation. Are there examples of states or small parts of a country with a universal care health system within a different national system?

    • David Dempsey

      Jamie,
      The article says that the 80% actuarial value is the lowest state law permits and it advises the board to consider an 87% actuarial value.

      • David Dempsey

        Sorry Dave,
        This was a reply that I wrote to a comment that Jamie Carter made earlier about actuarial values.

  • John McClaughry

    Can we all, including Morgan and his editors, make a New Years’ resolution to banish euphemisms like “income sensitive health care fee ” ? “Income tax” seems like the honest label.
    Thanks to all for signing on.

    • Joyce Wilson

      John,

      I think Morgan is correct in referring to it as “income sensitive health care fee”. If it is a “income sensitive health care fee” then the state can also charge me a personal income tax on that very same money. There is a reason that Morgan called it “income sensitive health care fee” and that reason is very depressing!

  • Willem Post

    David,

    It is OK to be idealistic, but one needs to be a realist to survive.

    All sorts of low-income households will come to Vermont to get in on the good single-payer healthcare deal, and all sorts of high-income households, especially retirees with Medicare and AARP Supplementary, that now pay a lot of taxes to Vermont, will get out of Vermont to stay financially viable.

    • Richard Ratico

      Willem,

      “….all sorts of high-income households, especially retirees with Medicare and AARP Supplementary, that now pay a lot of taxes to Vermont, will get out of Vermont to stay financially viable.

      Aren’t you one of these? Will you be leaving?

      • Willem Post

        Richard,
        It would be a big loss for Vermont, as I already pay a lot of taxes.

  • Kathy Callaghan

    “The people of Vermont desperately need a universal, publicly financed healthcare system that enables everyone to get the care they need and contribute what they can. Such a system can only work if it is financed publicly and equitably, and if it provides all needed care, without cost barriers.”

    Well, here’s the problem with that utopian dream. When everyone “contributes what they can”, the middle class always pays for those who cannot, and subsidizes those who can pay very little. The wealthy escape paying their fair share because there are limits on how much of their incomes can be taxed, and no political will to remove the caps. So the middle class makes up that difference, too.

    When you subtract all the dollars that won’t be coming into the pool, you are left with an impossible tax burden imposed on Vermont businesses and middle class taxpayers. Have you ever thought about that, or is the utopian dream just too enticing for a reality check?

    “Financed publicly and equitably, provides all needed care and without cost barriers”. I’ve already discussed “equitably”. There will be no “equitably”. “All needed care” – with the middle class or what is left of them shouldering most of the tax burden, “all needed care” may turn into waiting lines and rationing. That is what has happened in Canada and the UK. “Without cost barriers” – really? 100% paid – no cost sharing? How long would a plan like that last? History has shown that JY-type plans are the dinosaurs of the health care world.

    All of this sounds so wonderful until you apply a little reality and logic to it.

    • Nick Spencer

      Excellent post Kathy, and that’s the inconvenient truth about single payer. The subsidy model is Shumlin’s favorite tool, I would expect it to work and control health care costs about the same way that his educational funding plan has on our property taxes.

    • chuck gregory

      Well said, Kathy! Now let’s apply a little reality and logic to the tax system.

      the top earning households in Vermont in 2011– 360 households, or one-eighth of one percent of all of them– reported an average Adjusted Gross Income for Vt. tax purposes of $15,989,285. According to professor Andrew Hacker’s “Money” Who Makes How Much and Why,” households making over $1M get two-thirds of that from capital gains; for these households, that’s an average of $10.6 million. “I work for my money, I pay taxes; my money works for me, it doesn’t pay taxes.” The average household of 4 in Vermont pays a 3% tax rate on $54,000; a family getting 19,600% in income it doesn’t even work for pays a Vermont tax rate only 300% higher than the average family of four.

      And while property was originally taxed because it was (and sometimes still is) used to create wealth, the capital behind all those capital gains is not taxed. Treated as property in our courts of law, it gets a free ride, unlike your house.

      Clearly the legislature should be looking at a truly broad-based tax for universal health care.

      • chuck gregory

        edit: should read “19,600% more in income…”

      • Willem Post

        Chuck,

        A truly broad-based tax would be a sales tax.

        Everyone buys goods and services, bit upscale households buy much more, so they would pay most of the sales tax.

        Incomes vary up and down from year to year, but sales vary very little, so a sales tax would be a steady, predictable revenue producer

      • Walter Carpenter

        “Clearly the legislature should be looking at a truly broad-based tax for universal health care.”

        That’s the part which the 1%’ers so not want us to know:)

        • Willem Post

          Walter,

          The 1%-ers are the leaders in any society.

          They are the ones who head up organization, make things happen.

          Usually, they get to these levels by working harder and smarter than others.

          Make life miserable for them, they have the means to move elsewhere.

          What is left is much more easily manipulated by the likes in Montpelier.

          • Glenn Thompson

            Willem Post,

            “Make life miserable for them, they have the means to move elsewhere.”

            BINGO!!!!

  • I think this pretty much sums it up:

    “You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.”

    ― Adrian Rogers

    • Walter Carpenter

      ” You cannot legislate the poor into freedom by legislating the wealthy out of freedom.”

      Perhaps, or perhaps not, but you can certainly equalize things a bit more so that the poor are not unfree while the rich are free. In the last generation or so the rich certainly have enjoyed the most freedom…

    • Bob Orleck

      Thanks for that quote from Adrian Rogers. Here is an example of it put to action by a wise professor. Very short read and worth the time. http://todaysfreshmanna.wordpress.com/2009/07/17/you-cannot-multiply-wealth-by-dividing-it/

    • chuck gregory

      Didn’t Adrian Rogers also say, “When you have the ninety-nine percent believing that the top one percent is good, wise, just and always acts in the best interests of their lessers, then you’ve won the game” ?

      • NO, that’s most likely a quote from “chuck gregory’s” delusional world. The one where he thinks that the people what have worked their tail off to get where they’re at today should continue to float the boat for the folks sitting at home watching TV all day. Those of us that have spent 8 years in higher education, and 100’s of thousands of dollars in debt to get where we are today. If you think for a minute I’m going to subject my family to this, you any everyone else can take my family income tax revenue and un subsidize property taxes and kiss them goodbye. I can and will move my family in a heart beat. If I can’t sell my home, I’ll be sure to rent it to some low income subsidized renters to pay my property taxes while I’m living in NH without any income or sales tax.

        • Walter Carpenter

          “I’ll be sure to rent it to some low income subsidized renters to pay my property taxes while I’m living in NH without any income or sales tax.”

          But with very high property taxes and various fees like business profits taxes, and so on and on to compensate for this lack.

          • “But with very high property taxes and various fees like business profits taxes, and so on and on to compensate for this lack.”

            The property taxes aren’t much higher then here in VT now. In my case, if I moved to NH with a house valued like mine in VT my family would gain about 8-10k in disposable income. My family members property taxes in NH went DOWN last year, unlike mine that went up nearly 10%.

            Walter if the business climate is so poor in NH how do you explain the disparity of industry up and down the valley? It’s like night and day. My family member that lives in NH moved from ME, first thing he said is, “it’s amazing how NH does so much with so much less”.

  • Steve McKenzie

    With the (unofficial) release of this first piece of tangible information on the master financing plan for ‘single payer’, it appears many individuals are now able to declare the entire enterprise a success or a disaster.

    I don’t understand how either position can be defended at this point, given the long list of remaining unknowns, along with the impact of each on employer and individual behavior.

    (I do know that in times of significant organizational change such as this, clear communication of status is key to reducing conjecture, fear, anxiety, etc. I think all sides can agree the administration has failed to date in this regard, as evidenced by the range of comments and positions above.)

    While I believe I have followed this reasonably closely, a short list of important facts I still don’t know would include:
    *the actuarial value.
    *deductibles, if any, and amounts
    *scope of coverages (dental, mental health, chiropractic, etc)
    *acceptance if out of state services are required
    *will there be annual and/or lifetime maximum benefits
    *income sensitivity levels and associated adjustments
    *net income impact on individuals at varying income levels
    *the projected effect of income impact at varying levels on residents decisions to remain in or leave Vermont.
    *provider reimbursement rates.
    *the projected effect such rates will have on providers decisions to remain in or leave Vermont.
    *exactly which groups will be included or excluded
    *Who is considered a “Vermonter”
    *what are the residency requirements and pre-requisites.
    *Will Dr’s be assigned, or is selection up to each individual

    I certainly have my own opinions on this endeavor at this point, but until I have complete information, some of which is listed above, I don’t see how I could definitively declare it a success or failure at this time.

    If the facts, whenever they are finally presented, show this proposed system to be an improvement, fine, proceed.

    If they don’t (or if they are not adequately presented and supported), then it should be dropped and not reintroduced until such time as it can be objectively shown to be an improvement, not just “change”.

    • Linda Baird-White

      A Very Well Presented Analysis with important questions highly deserving of indisputable-factually proven answers.

      Any contrived answers will prove that a Pied Piper Mentality can be exposed, allow the Lawmakers to put this behind us and get on with Responsible Governance.

    • Eric Taylor

      Steve, how dare you be objective and reasonable before all the facts are in. Haven’t you been following the comments?? Vitriol is what’s needed!

    • Kathy Callaghan

      You forgot, “And if the fuzzy math is enough to convince the legislature and others, the way Gruber managed to hoodwink the CBO…” Then what?

  • Nick Spencer

    A far cry from Ethan Allan fighting for Vermont’s Independence to this. Wonder what he’d think of a Vermont government using every trick, every subsidy and every tax to force citizens onto the same rung, the bottom one, on the ladder. Vermont Motto: “Freedom and Unity”. Neither word very appropriate for this moment in the State.

    • Walter Carpenter

      “A far cry from Ethan Allan fighting for Vermont’s Independence to this.”

      He would probably be proud that the state has the political/moral courage to do what is right for its citizens, and lead the way for the rest of the nation, like it did with the slavery issue in his day.

  • Nick Spencer

    Can I reduce my income by the $13,000 I’m paying in property taxes to subsidize other Vermonters? Fuel oil subsidy? Electrical? Carbon tax? Maybe by then I would qualify for “free” health care. Shumlin promised he would not support something that would be a detriment to the Vermont economy. Is it just me or does his nose appear to be slightly longer?

    • Peter Liston

      Nick, Can you elaborate? How much exactly does the Carbon Tax cost you each year?

    • chuck gregory

      Nick, there is around $32 billion in untaxed privately held property in Vermont, which is one of the reasons you have to pay $13,000. I don’t know your situation, but 14% of my gross annual income goes to pay my property tax– and I am glad that I help pay for good schools and good town government with it.

      • Amanda Higgenbotham

        Good Citizen Chuck – thank you for your contributions. Since you’re happy with paying 14 percent, we’re going to up that to 22 percent next year. Thank you again and we’re sending you a $10.00 voucher for your next purchase of an electric vehicle.

  • Paul Lorenzini

    Accepting the progressives plastic swipes at -2.7% forces me to assume I will never be able to hire anyone, at -10.75%, vs. The corporate enterprises of dealerships, is purely unsustainable, I will fight alone. So be it.

  • Paul Lorenzini

    How much will it benefit me to lease a Prius? Realalistically? Explain, tax breakers. Please.

  • Bob Orleck

    Those of us who are upset with what we know now are in for some real stress once the other shoe is dropped. There will be more you know! The Governor may have kidded about taxing everything from bubblegum to lollipops but you know he really meant it. I understand there is a plan (not talked about much now) that will tax the property of tax exempt organizations (that do so much public good) in order to pay for this healthcare single payer.

    So you see, no matter how you cut it we will keep paying directly and indirectly. The money generated from these tax exempts will be more than lost in the value of services they will no longer be able to provide to us the citizens of Vermont. Beware Democrats and Republicans. We are all going to be hit by this and other yet unheard of plans to pay for Shumlin’s fiasco. We are all going to get hurt by what this Governor is doing.

    What can we do about this? Since no candidate got 50% of the vote in the general election the legislature must decide the winner. You can defeat this man and turn the state from this destructive course by encouraging your representatives to vote for Scott Milne in the legislature and end the reign of terror now being inflicted on us by Governor Shumlin. The vote is supposed to be a secret ballot so you Democrats can do the right thing and not worry about repercussions. You can do the right thing, we all win and you will feel good about your vote.

    Let’s make good history with this vote and save our state!

    • Amanda Higgenbotham

      If those who actually pay taxes (roughly 50 percent of the legal residents) just stopped sending money to Montpelier and forced them to spend more time and effort to compel us to pay, perhaps they’d begin to relearn some important lessons about the electorate they’re supposed to represent.

      • Leslie Matthews

        Where do you get the idea that only “50 percent of the legal residents” of Vermont pay taxes? Everyone pays sales taxes, property owners pay property taxes, and renters contribute to property taxes indirectly. I think you mean to say that 50% of residents earn too little to pay state income tax. I don’t know if that number is correct, but I do know that it is incorrect to say that only 50 percent of residents pay taxes. Everyone in the state pays taxes.

  • Patrick Cashman

    By the way, big thumbs up to the Gov for this smooth rollout of his financing plan. Almost two years late and leaked in dribs and drabs. Way to deliver Pete.

    • Mark Kevorkian

      Maybe, just maybe, this IS the rollout. I’m no conspiracy nut, however it seems a bit too convenient that this “leak” from our Gov’s advisory council (which, previously, had been buttoned up tightly) comes only a couple of days after his surprise announcement that the plan and funding for his health care scheme will be released during the last week of December. Perhaps, even with the Gruberized economic forecast, our Gov knows that his utopian scheme won’t work so he’s letting the news out slowly. (Please note that my speculation here is in no way a criticism of Morgan True’s reporting, which has consistently been outstanding).

  • Chet Greenwood

    Now if everyone who commented on this issue would contribute to VT Digger maybe their donor percentage would go to 4% and we will have something to read next month!

  • Carl Marcinkowski

    “Iceland and Malta are both smaller than Vermont and have universal health care coverage. Malta quite openly states, “You pay for it with your taxes, and when you need it, it’s free.” No shame there! Vermont’s per capita State Domestic Product is greater than the GDP of France, which has the best medical system in the world (in terms of both cost per person and health outcomes). Vermont can do at least as well as any of those countries and the other 160 which are poorer than Vermont.”

    But I’d have a difficult time making it to my appointments in those countries. What I am referring to is, are the medical and pharmacy costs equal to the costs here in Vermont? I see a ton of bloat in my wife’s and my own doctor’s/lab’s invoices. It is a documented fact that the medical costs in the US are the highest in the world. So much for comparing apples and oranges.

  • Rob Coates

    I still don’t understand how so many people wind up defending the existing system. I am all for constructive criticisms of the proposed Shumlin solution. But critics here never suggest how we should resolve the most expensive wasteful healthcare program in the first world…the USA’s.

    • Dave Bellini

      Rob you make a point but as you state: “the USA’s”
      We have a national problem that could and should be fixed at the national level. Vermont is not a country.
      GMC will do nothing to lower the price of drugs. The federal government could. Medicare works because it is nationally run. Vermont is too small to influence the price of care, which, most people forget, is the real problem. America needs more Doctors and more medical schools. Every year students are turned away from medical school. More Doctors means less cost.

      And remember folks………..all this started with the promise of $590 million dollars in “savings.”
      And remember what “savings” means …. COST INCREASES.

      • Rob Coates

        Dave,

        Yes, but many will die waiting for the national solution. Our “socialist” President has codified high drug prices into his Republican ACA plan. We will not see a remedy there in our lifetime.

        I agree we need more doctors. But that is a whole discussion on its own, centered on costs not qualified college applicants.

    • Glenn Thompson

      Rob Coates,

      “But critics here never suggest how we should resolve the most expensive wasteful healthcare program in the first world…the USA’s.”

      How would you define spending $100 million to create Vermont Health Connect in a state with a population of 625,000? The term “waste” has been redefined by incompetent politicians and government bureaucrats!

      • Rob Coates

        Glenn…

        I think you made my point.

        Are you satisfied with the current system ? Whatever happened to American exceptional ism which states we are better than everyone else ? We’re not.

      • Walter Carpenter

        “The term “waste” has been redefined by incompetent politicians and government bureaucrats!”

        But the exchanges are private insurance.

        • Willem Post

          Water,
          BC/BS is a bureaucracy.

        • Glenn Thompson

          Walter Carpenter,

          “But the exchanges are private insurance.”

          Dictated to and told how to be manage by the government!

  • Peter Everett

    Most fearful saying: “I’m from the government, here to help you”. This is going to hurt those who fund the program. Projections from government ALWAYS fall far short of their original statements.
    For once, I wish government would tell the truth in matters that cost us. Oops, I forgot, they think we’re all stupid, no need to tell the truth.

  • Come the end of the year, we’ll all see Gov. Shumlin’s long awaited thinking on the single payer system and what it might cost and who will pay.

    Before considering Gov. Shumlin’s latest thinking for a single payer system in 2015, the people and the legislature need to go back and recall his promises on health care reform made in 2010.

    When initially pushing for single payer, Shumlin promised to deliver on these fundamental goals: 1. Eliminate wasteful and inefficient insurance company administrative costs and overhead and 2. Lower consumer health care costs.

    Four years later, how has the Governor done on his health care reform promises made to the people when selling Act 48?

    Short answer, he has failed and failed miserably.

    The Shumlin administration has managed to bring the concept of wasteful and inefficient overhead spending to a new low with his blotched implementation of the health care exchange that will end up costing tax payers more than $100 million while delivering little.

    Based on what he has done with health care administrative execution so far, how in the world can the people and legislature expect his performance to be any better going forward than what he has delivered in the past? Let’s not forget that history means something when looking to the future.

    And as far as those inefficient insurance companies are concerned, at least one of them will continue to play a pivotal role in single payer as the administrator to run the program for the state. So the insurance company isn’t going away, it will just be playing a different role.

    And what will the insurance company be paid for such services? Well, we don’t know, but based on past Shumlin experience in hiring outside venders such as CGI and Optum, we know it will not be cheap. Most likely, the cost will be similar to what it is now for a BCBS or MVP to run their back rooms…..so will there be any savings at all?

    As for lowering consumer costs, the driving rational for health care reform, Shumlin has failed to deliver anything. As a matter of fact, he has lost significant ground from his initial promise of saving $500 million in year one. He has basically performed so poorly that he has abandoned talking about costs and switched the subject to “equity” in paying for health care.

    As decision time approaches, why should anything that Gov. Shumlin has to say about health care reform have any credibility at all? Oh, add the Gruber factor to the mix and things get even less credible…….if not down right coyote ugly.

    So when the legislature considers Gov. Shumlin’s single payer proposal in 2015, they should keep this in mind: “Fool me once, shame on you. Fool me twice, shame on me.”

    • Willem Post

      Peter,

      You forgot his shabby real estate dealings with mentally-challenged Mr. Dodge.

      Bob Standard saw nothing wrong.

      I understand from some house members Bob, a former house member, is NOT sorely missed.

      Shumlin belatedly, after a firestorm of criticism, gave up on his “deal” and presumably made Mr. Dodge whole.

      Shumlin reports about $1,000,000 a year in gross income. That is WAAAAAY up there.

    • Walter Carpenter

      “Short answer, he has failed and failed miserably.”

      The exchanges are not single payer.

  • Ralph Colin

    Having read through the some one hundred plus comments above, what I find really interesting is that aside from the funding aspect of providing the wherewithal for a single-payer apparatus, apparently very few of all of you seem to have little, if any, reservations about the prospect of placing complete and absolute control of your family’s health care in the hands or the dictates of the same people who have given you the gift of Vermont Health Connect, i.e. the state government.

    What the governor and many of our legislators evidently want are a panoply of rights to decide who will provide what services to which residents at what costs.
    And once they’ve got those issues resolved, individual citizens may have little or no recourse against the government with respect to the provisions of those services if there are any disputes as to who will receive the necessary care, what the quality of the care will be, , the length of time that it may be made available to any given resident and who will be the provider. In other words, will any of us be permitted by the Health Care god to have much, if any, choice
    about such matters or questions?

    Consider that while 1984 has come and gone, the predicted initiatives and implementations of Big Health Care Brother are now beginning to see the light of day. Think to yourself: is this what I bought into when I decided to live in Vermont?

    Will, in fact, we be left much choice or selections in such critical decisions of this nature? These are matters which should be as, if not even more, important than the almost singular focus which is now being placed on the costs involved.

    It may be time to wake up to the almost impossible task of putting Humpty Dumpty together in – if the governor gets his way – less than two years. He wants to see his legacy achieved before he’s chased out of office in the next election!

    Good Luck, people.

  • Kim Fried

    Don’t forget he’s not in office yet. The more the Governor opens his up mouth, or the more his administration opens up theirs, or great reporters dig and discover the facts, the less chance he has returning as our Governor in January. I’m sure our legislators, or at least many of them, are all so listening to how this administration’s proposals one after the other will be the ruin of our great state. The Governor, if he were smart would head out of country for one of his vacations to avoid further damage. Well maybe he is already sunning, fine by me.

    • Walter Carpenter

      “how this administration’s proposals one after the other will be the ruin of our great state.”

      So how are they going to ruin this state? I suppose we should just do nothing and let the ballooning health care costs bankrupt us. I guess that would be preferable.

  • Bill Olenick

    What ever became of the frugal Yankee loaded with common sense…?

    • Leslie Matthews

      Whatever became of the Unity in Freedom and Unity?

    • Carl Werth

      She moved to New Hampshire, Bill.

      • Walter Carpenter

        “She moved to New Hampshire, Bill.”

        Where she is enjoying huge property taxes and lots of other taxes disguised as fees.

        • Like what fees Walter, what huge property taxes?

          At the rate Vermont’s property taxes are increasing you can kiss that claim goodbye.

          Here are some FACTS for you Walter.

          “Vermont is ranked 3rd of the 50 states for property taxes as a percentage of median income.

          New Hampshire is ranked 2nd of the 50 states for property taxes as a percentage of median income.”

          http://www.tax-rates.org/vermont/property-tax

          VT:

          The median property tax in Vermont is $3,444.00 per year for a home worth the median value of $216,300.00. Counties in Vermont collect an average of 1.59% of a property’s assesed fair market value as property tax per year.

          Vermont has one of the highest average property tax rates in the country, with only seven states levying higher property taxes.

          Vermont’s median income is $62,088 per year, so the median yearly property tax paid by Vermont residents amounts to approximately % of their yearly income. Vermont is ranked 3rd of the 50 states for property taxes as a percentage of median income.

          The exact property tax levied depends on the county in Vermont the property is located in. Chittenden County collects the highest property tax in Vermont, levying an average of $4,096.00 (1.61% of median home value) yearly in property taxes, while Essex County has the lowest property tax in the state, collecting an average tax of $1,727.00 (1.39% of median home value) per year.

          NH:

          “The median property tax in New Hampshire is $4,636.00 per year for a home worth the median value of $249,700.00. Counties in New Hampshire collect an average of 1.86% of a property’s assesed fair market value as property tax per year.

          New Hampshire has one of the highest average property tax rates in the country, with only two states levying higher property taxes.

          New Hampshire’s median income is $73,159 per year, so the median yearly property tax paid by New Hampshire residents amounts to approximately % of their yearly income. New Hampshire is ranked 2nd of the 50 states for property taxes as a percentage of median income.”

          http://www.tax-rates.org/new_hampshire/property-tax

          So YES Walter NH does have a higher property tax rate per median income then VT, but by very little. We are ranked right after NH! Plus we have sales and income tax on top of that.

          I look forward to your reply!

          • Willem Post

            Randy,

            Thanks for all the good info and analysis.

            Facts and figures must be disconcerting to people who fly by the seats of their pants.

            This DOES NOT include school taxes, which, in Vermont, are way out of line considering the poorness of Vermont.

  • Ron Avery

    Remember the “poor pitiful me” routine and how he understands losing the geographical vote? The positive part of these tax hikes which had he made them known like the honest guy he foolishly wants us to believe he is, will cost him any chance to realize his dream of being a Senator and Washington insider.

    Oh yeah lets not forget the 18 percent tax on the so-called “cadillac” insurance plans coming in 2018. So if you think you are immune, think again.

    • Joyce Wilson

      Ron, Actually the “Cadillac” tax is a whooping 40%! Below is from Gruber that Vermont has hired for $500/hour using taxpayers’ dollars that the 40% Cadillac is in actuality a tax on the people (see CNN link below).

      Also Morgan True on the Cadillac tax mentioned in this Vermont Digger article, “Those are considered high-value health plans and many will be subject to a 40 percent excise tax as part of the ACA, starting in 2018. The rest will be subject to the tax by 2023.

      It’s unlikely Vermont’s ACA waiver would allow it to offer a high value health plan through Green Mountain Care without paying the tax. ”

      http://www.cnn.com/2014/11/14/politics/gruber-update-friday-white-house-obamacare/

      “The issue at hand in this sixth video is known as the “Cadillac tax,” which was represented as a tax on employers’ expensive health insurance plans. While employers do not currently have to pay taxes on health insurance plans they provide employees, starting in 2018, companies that provide health insurance that costs more than $10,200 for an individual or $27,500 for a family will have to pay a 40 percent tax.

      “Economists have called for 40 years to get rid of the regressive, inefficient and expensive tax subsidy provided for employer provider health insurance,” Gruber said at the Pioneer Institute for public policy research in Boston. The subsidy is “terrible policy,” Gruber said.

      “It turns out politically it’s really hard to get rid of,” Gruber said. “And the only way we could get rid of it was first by mislabeling it, calling it a tax on insurance plans rather than a tax on people when we all know it’s a tax on people who hold those insurance plans.”

  • Mary Alice Bisbee

    I have read well over 100 comments on VTDIGGER on various health care reports. To date, it is all supposition. As someone who has been receiving a national universal government run healthcare plan called Medicare, I can only say it is a vast improvement from having to pay privately in between various jobs before I turned 65. I pay almost $190/month for UHC coinsurance that covers all deductibles and copays and as a low income elder living in subsidized housing, I consider it to be well managed, excellent coverage and much less than I had to pay through private insurers.
    I may be wrong, but I have been under the assumption that anyone eligible for Medicare will not be affected in any way in this first step towards universal coverage for all VTers and only will be covered for co-insurance eventually, and thus will not pay any income taxes for this new coverage for those under 66.
    I technically pay no income or property tax, but do pay through my rent, sales tax, and by the way, receive no tax deduction for anything I give to charity. Believe me, there are lots of us who give more to charity percentage wise than the high rollers who complain about any increases and get huge tax breaks for their charitable contributions.
    It is only those with middle incomes who would benefit greatly by moving to Florida, a place I certainly don’t want to live, in spite of the fact that I have relatives there. Vermont is my home and has been for several generations.
    The only real way I believe we can save any money on single payer is if we KISS, keep it simple, stupid, by taxing (or paying fees) on the front end for those who can afford it, and giving free care for those who cannot. This is not a disincentive to work, but rather a realization that with ever rising inflation, it is the poor who suffer most. If we don’t hold down administrative costs, there will be no real savings, and the only way to do this is to avoid micromanaging service payments.
    But let’s just wait and see what comes out on December 29th or 30th and stop with the horrific fear mongering!

  • Paul Lorenzini

    I personally, will never support the wealth of rich doctors, thru government mandated taxation. Doctors aren’t that perfect, no matter what the Ivory Tower belches as the truth.

  • Paul Lorenzini

    Dear Dr. Shummy, you cannot save me with more welfare, but please, rest well beside those that you do, Sir.

  • Willem Post

    Mary,

    You obviously are properly insured and have a household income of less than $50,000, so you have nothing to worry about regarding the MEDICAL PAYROLL TAX and the MEDICAL INCOME TAX, and regarding paying real estate taxes (municipal and school), and state income taxes. Lucky you.

    A true Vermonter and living in subsidized housing to boot.

    The socialist system is working out for you. Just be glad others are being fleeced by the state to make it all possible. But many of those to be fleeced with the new taxes will be long gone.

  • Jim Mulligan

    Strange nary a mention of the word “actuary” .

    May I suggest it might be an opportune time to
    reconsider installing the actuary on the the Green Mountain Care Board that was denied Mrs Browning.

    The source for the results of those who cast yea or nay votes for Act 48?
    for Act 48?

  • Betty Frye

    What type of health plan does Sen. Leahy and Sen. Sanders and Rep. Welch or in fact Gov. Shumlin have? How much and what do they get?

    someone please inform

    • Willem Post

      Betty,
      You can bet your bottom dollar it is Cadillac level.

    • paul lutz

      They are exempt from all this mess. Nice touch. The ACA, which was so amazing we juts had to have it, does not apply to Congress.

  • Stan Shapiro

    As the 227 th comment it seems rather clear : Either you are willing to accept incremental change that is going in the right direction or do you desire that Vermont serves as a grand revolutionary vanguard to a new social order.Gruber aside no one will be able to figure out the consequences of such an ambitious transition.Those who work in health care day to day know that significant progress is ongoing and successful in Vermont.A reordering of the economy and the redistribution of funds into the hands of the state is something to be very carefully reckoned with.

  • Ed Fisher

    Gov.Shumlin recently released a take on how much of ALL taxes in Vermont go to school education . Most of that to salaries and benefits to teachers and staff ! So how much of this single payer taxes will go to the same – salaries and bennies to insurance moguls ! Major Tax and spend is all it amounts to ! Thanks Gov!

  • Ron Pulcer

    What about self-funded ERISA plans which cover most, but not all of roughly 350 employees scattered across multiple states. Most of our company’s employees are in Vermont, New Hampshire and Florida, plus sales people living in most of the 50 states?

    My employer will not be able to “replace” their ERISA plan, because not all employees live or work in Vermont. We have VT employees working in NH, and NH employees working in VT.

    So in affect, the Vermont residents, working in VT or NH will be triple-billed. Once for their 20-25% premiums based on various wellness factors (smoker/ non-smoker, BMI and online health assessment (completed forms yes/no, not based on actual answers). Second for payroll tax portion. Third for income tax portion.

    If “Single Payer” is supposed to de-couple from employment, then this finance plan doesn’t bear that out. In actuality, the Vermont Single Payer system relies mainly on “people working”. The only de-coupling would occur if you lost your job, went back to college, or quit to start a business. Otherwise, it is in fact tied to employment, and then some, if your ERISA plan also remains.

    Also there could be “cost-shifting” to out-of-state fellow employees. If the Vermont resident employees don’t sign up for ERISA plan, the remaining smaller pool of fellow employees in other states will likely see their premiums go up.

    While I support the idea of universal access to healthcare, I don’t think Vermont has sufficient population (i.e. “economy of scale”) to make so-called Single-Payer sustainable. If New England states came together to create a regional New England healthcare system, than there is better chance it will work. Since NE states are geographically small, and there is lots of travel between NE states, it would make sense to be able to have coverage across the New England region.

    It sounds like this payroll tax idea is very similar to what Dr. Hsiao suggested about 4 years ago. Perhaps the percentage of payroll tax is different, but it’s the same concept, including charging ERISA plan employees. So what took Governor Shumlin so long, given that this is really no surprise, it’s what Dr. Hsiao suggested? Also, that was suggested by Dr. Hsiao before all the other consultants were hired.

  • Paul Lorenzini

    Starting with 8% of your current payroll, we will provide all employers with a healthier, more subservient, devoted percentage of the populace to enrich yourselves upon, sayeth the facts of this assumption, provided by progressive doctors, supporting progressive politicians.

    What do most cults demand as tithe for personal gain?

    Ask the mafia.

    This is legalized, doctor approved mafia

    period

  • Paul Lorenzini

    Thank you.

  • Nellie Gray

    I’ll list my own personal objections to single payer in Vermont beginning 2017.

    1- Notice that the state is already “cheaping out” and indicating they’ll use the Gold plan as a model. That plan means the “insured” still are exposed for $5000 or so out of pocket if they have any significant medical expenses.

    2- So, first if you’re decently employed, you have a tax on your income of 8%, your employer also takes a hit, so they lower your salary or don’t raise it, (or don’t hire you), and then, if you’re sick, you are liable for another $5000 out-of-pocket costs.

    3- and good luck getting through the inevitable bureaucratic breakdowns, snafus, technical difficulties, the health care rationing, the denials of expensive testing–and other niceties the bean counters come up with, the loss of top surgeons in the state, the inability to go to Boston or NY for expert care if you need it for cancer or other treatment that is not available in state.

    Sure, where do I sign up? NOT.

    Disclosure: I had life-threatening cancer at 48 while otherwise healthy, active, trim, no bad habits, NOT my fault. I become incensed when I hear the statisticians talk about their plans to force us into good health habits to save money. Life is not like that. Cancer doesn’t really give a damn who you are much of the time.

    My diagnosis: Walked into an ER, said I have a mass in my abdomen, I can feel it, HELP me. And they did. With expensive testing that is exactly the kind that will get rationed. Testing that led to the surgery that saved my life.

    Cancer, my dears, reaches into the lives of 1 in 2 men and 1 in 3 women. If it hasn’t reached you yet, great, but just know, very expensive health care can SAVE your life. I’m now a long-term survivor of a dangerous cancer. I beat nasty odds. If the statisticians decided, they might have withheld all or part of my care. I’m 7.5 years cancer-free and luckily all my medical providers did was try to save my life and not worry about more than that.

    I have never heard any “architect” of the fantastical universal health care plan talk about saving patients’ lives.

    That’s what doctors do. Accountants and consultants do something else. They scare the heck out of me, and they should scare you too.

    Thank you.Hope this wasn’t too rambling. I would like to join a group fighting single payer. Where do I find one?

  • Peter Everett

    Is there any chance the state or my town would take my property by eminent domain? If I got fair market value from either of them, I would willingly give them my property and leave this state rapidly. I live near a Legislator, maybe, he could push government to fast track my request. I’m sure he would be more than glad to see me leave ASAP.
    Am I not correct, sir?

  • Paul Lorenzini

    Who is the target of the payment plan? Please explain Mr. Pete.

  • Paul Lorenzini

    What this all comes down to in the end, is economics.

    Just ask Gruber.

    All Gruber fans, raise your hands!

  • Paul Lorenzini

    I will hire no one,
    I will not work for anyone,
    Ever again.
    As long as this is the policy
    Of democracy.
    I will encourage
    All those with ability
    To avoid the scrutiny
    Of the “healthy”
    Do your best
    As long as it is good
    For all parties involved
    Not in the scam.

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