The single payer advocacy group Vermont Leads says the state could still implement a publicly financed universal health care program in the next three to four years.
New elements of the Affordable Care Act will continue to change the health insurance market in ways that will increase the public’s appetite for a sweeping new program, according to Peter Sterling, the group’s executive director.
Gov. Peter Shumlin’s recent single payer report highlights two “structural problems” that make a publicly financed program untenable, but those problems can be addressed by 2017, Sterling said.
First, the growth in health care costs continues to outstrip growth in the economy, making it difficult to finance with tax revenue. The regulatory work of the Green Mountain Care Board has shown promise in reversing that trend, he said, and could go a long way to making single payer more palatable.
Second, enough Vermont residents have health insurance that insulates them from the high costs of care, creating a sizable constituency opposed to, or “highly suspicious” of, a public coverage program, according to Sterling.
“A majority of Vermonters have no idea how much, or how unfair, the current system of financing health care is, nor do they understand yet how the world of the ACA will change that to their disadvantage in the near future,” he said.
The ACA excise tax on high value health plans, known as the “Cadillac tax,” will take effect in 2018 without action by Congress or the next president. All individual and family plans offered to state employees in 2015 are expected to be subject to the tax, unless their value is reduced, according to a recent analysis by the Joint Fiscal Office. Health plans offered to public school employees, as well as many employer-sponsored plans, will also be affected.
In addition, an increasing number of small-to-midsize employers are likely to drop health coverage, according to Sterling, so they can save money and reinvest in their businesses, offer better wages or increase profits. Few businesses decided to forgo offering a health benefit in the exchange’s first year, but as employers become more familiar with the exchange, and it starts to function better, Sterling said he expects more to do so.
“Most employees will lose in that situation,” he said, especially people whose income is too high to qualify for subsidies.
“Once these individuals are directly confronted with the high out-of-pocket costs in the exchange, they, too, I believe, will be inclined to look more favorably on Green Mountain Care,” Sterling said, referring to the state’s once-envisioned publicly financed program.
If enough Vermonters are enrolled in exchange plans with higher premiums and out-of-pocket costs, it would change the conversation around a $2.5 billion tax package, Sterling said.
A recent national survey found that 16 percent of employers with fewer than 200 employees said they are considering dropping health coverage in the next five years, according to a recent Washington Post report.
An expert interviewed by the Post suggested, like Sterling, that employers may move away from providing coverage once they’re more accustomed to the ACA, but such changes play out over years and possibly decades, they said.
That makes it unclear if enough people will have migrated from employer-sponsored coverage to the exchange, or have less generous benefits from their employer, to create a groundswell of enthusiasm for Green Mountain Care.
