Editor’s note: This commentary is by Bram Kleppner, who is CEO of Danforth Pewter, co-chair of Vermont’s Medicaid/Exchange Advisory Board, former member of the Governor’s Business Advisory Council on Health Care Financing, and former chair of the Vermont Coalition for Universal Reform (VT CURE).
[I] won’t rehash all the reasons our current health care system doesn’t work, nor will I review all the data from around the world that strongly suggest that a single-payer system will provide better care at lower cost to more people than our current system.
Suffice it to say that what we do now works well for only a few groups of Vermonters, and it’s going to stop working for most them soon, due to the rapidly rising cost of insurance.
Vermont’s inability in 2014 to figure out how to transition to a single-payer health care system in 2017 doesn’t change the fact that single-payer remains the best choice for Vermont.
We did learn some lessons in 2014. There were a number of things that we were trying to do as a part of single-payer implementation that we can do before we move to single payer, which will make the transition a lot smoother.
• Probably the biggest hurdle is bringing all the employers who do not offer health insurance into the system. Currently, the majority of their employees are either uninsured or have Medicaid or have insurance through a spouse working elsewhere. In all these cases, part or all of the care those employees receive is being paid for by the businesses that do offer health insurance. The governor has proposed a 0.7 percent payroll tax on all businesses to fund Medicaid more fully, which I support. In addition, I believe that companies that do not offer health insurance should pay an additional 1 percent payroll tax in 2016, and that that tax should be increased by 1 percent per year until it reaches 8 percent in 2023. The money raised from this tax should be used to fully fund Medicaid and to pay for the care of uninsured Vermonters. If we want to subsidize small businesses, like creemee stands, by all means, let’s do so, but let’s do so in a direct, efficient and transparent way.
• The governor has also proposed continuing to move forward on payment reform to move Vermont to fee-for-outcome. This is also an important step in the right direction.
As Vermonters, we will start benefiting from lower costs and better and more available care over the course of the next 10 years, and when we get to 2025, we will be in a position to harvest the full benefits of going to a single-payer system without a disruptive transition.
• Tax reform – implementing the Blue Ribbon Commission’s recommendations will give Vermont a fairer, more efficient and more robust tax system, which will be able to better support the shift of revenue from premiums to taxes that single-payer will require.
• Finding a way to get primary care access to all Vermonters will improve the health of those who currently don’t have primary care and will reduce the cost of caring for those people, reducing both the health challenges and the financial challenges to moving to single-payer.
• Finding a way for people who work in Vermont and live in New Hampshire, Massachusetts and New York to either be part of the system or to opt out. If they opt out, they should not pay the portion of Vermont income tax that will go to the single-payer system, and the company should remit an amount equal to the payroll tax it would have paid for them to the employee, so the employee can buy insurance on his or her home state’s exchange.
• Vermont Health Connect needs to be fully functioning to make the transition to single-payer as seamless as possible.
• One of the more complicated issues is figuring out how to separate the medical portion of worker’s comp from the salary replacement and from the employer’s liability insurance, but the payoff will be worth it. With the medical portion covered by Green Mountain Care, the insurance that employers need to replace wages and protect against legal action should be meaningfully cheaper. We were unable to find an insurance company willing to write that kind of insurance, but we need to either find or create an insurance company that will do so.
• Now that we know roughly what the costs will be, and roughly what the benefit package will be, we need to work with all the large self-insured companies with a presence in the state on their transition plans. For each of the top 15 or 20 of the self-insured companies, we and they need to understand how their costs and benefits will be different from the current status; what supplemental insurance and programs they will implement in addition to Green Mountain Care; and how they will manage the transition to the new system.
• We also need to understand that transition for state employees, assuming that they will have to cover more of their costs than they do now. Presumably, a 10-year transition from their current costs and benefits to the costs and benefits they’d have under single-payer would be gradual enough so as to not cause any real dislocation, but that needs to be clearly agreed on with the state employees union prior to moving into the transition.
As Vermonters, we will start benefiting from lower costs and better and more available care over the course of the next 10 years, and when we get to 2025, we will be in a position to harvest the full benefits of going to a single-payer system without a disruptive transition.
