Vermont Continues Push Toward Single Payer System Without Funding Clarity

Vermont Continues Push Toward Single Payer System Without Funding Clarity
March 26, 2013

Loren Heal

Loren Heal (loren.heal@gmail.com) is a research programmer at the University of Illinois at Urbana-... (read full bio)

As Vermont continues its push to implement the nation’s first single-payer health insurance program, it remains unclear how the state plans to pay for the $1.6 billion annual cost of the program.

Vermont is developing its single-payer system to be active in 2017 if financing problems can be resolved, according to Mark Larson, commissioner of the Department of Vermont Health Access.

“We submitted the financing report in January, and then in February the governor, Speaker of the House, and president pro tem of the Senate agreed to appoint a commission to take the information from the report and continue to work on specific financing mechanisms, and so that work will be ongoing,” said Larson.

But Jeff Wennberg, executive director of Vermonters for Health Care Freedom, said Vermont’s citizens still haven’t been told how the state will get the money. Act 48, the 2011 law creating the single-payer design, stated the governor’s office must deliver a Financing Report to the legislature no later than Jan 15, 2013, according to Wennberg.

“The key element of that is a financing plan,” Wennberg said, which Gov. Peter Shumlin’s office has yet to present. “The most striking, in terms of [the financing report’s] missing content, is any specific analysis or even recommendation for how it’s going to be paid for.”

Funding Sources Unclear

Act 48 bifurcated financing and implementation, so the costs of the program could be ignored while implementation proceeded, Wennberg said, which sparked bipartisan objections.

“They felt that the question of financing is one that should be answered up front, and that they should not create an almost omnipotent five-member board which has unheard-of authority and absolutely no accountability over the entire industry in Vermont and turn them loose to begin implementation until a thorough and healthy debate and some real decisions are made about how we’re going to pay for all of this,” Wennberg said.

The program will put all health care in the state under the control of the Green Mountain Care Board. As the board’s website puts it, Act 48 assigned the board responsibility for “hospital budgets, health insurance rates, benefit decisions and major expenses, rates paid by insurance companies and Medicaid, and plans to ensure Vermont has enough of the right health professionals and uses health technology to decrease costs.”

Third Attempt at Single Payer

Single payer had been introduced in the legislature twice before. “In both cases, once the price tag was put on it” the plans failed, Wennberg said.

Wennberg says Shumlin wants to avoid that outcome, and that he plans to get single-payer locked into place before the price tag is known.

“Even though we think that $1.611 billion is hopelessly optimistic, in terms of the tax needed to support this, it is sufficiently large that we can just use that number and present that number to Vermonters and explain to them that that is nearly three times the total revenues that the residents of the State of Vermont pay in their personal income taxes each year,” Wennberg said. “It is enormous—beyond comprehension in a state of 630,000 people.”

Single Payer Not Certain

Larson acknowledged there are several remaining steps before the single payer program can move forward.

“Act 48 has a number of different conditions that have to be met before implementation of Green Mountain Care,” said Larson. “One of them is the vestment of a financing plan. Another is receiving a waiver for the ACA and the exchange. There’s an economic analysis that has to be performed, and a budget authorized for Green Mountain Care.”

Larson said Vermont’s health care system could wind up like any of the other states that have implemented exchanges if the financing plan doesn’t come through or a federal waiver is not granted.

“We will implement a Health Benefit Exchange in 2014, and according to Act 48, if the conditions for implementation of Green Mountain Care aren’t met, then we would continue to operate under the reforms that go into place in January 2014, and any other future legislation that would be passed,” Larson said.

Loren Heal

Loren Heal (loren.heal@gmail.com) is a research programmer at the University of Illinois at Urbana-... (read full bio)