Vermont moving toward single-payer health care

BRATTLEBORO, Vermont Thu May 26, 2011 5:36pm EDT

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BRATTLEBORO, Vermont (Reuters) - Vermont became the first state to lay the groundwork for single-payer health care on Thursday when its governor signed an ambitious bill aimed at establishing universal insurance coverage for all residents.

"This law recognizes an economic and fiscal imperative," Democratic Governor Peter Shumlin said as he signed the bill into law at the State House.

"We must control the growth in health care costs that are putting families at economic risk and making it harder for small employers to do business."

Legislators say the plan, approved by the Democratic controlled House and Senate this spring, aims to extend coverage to all 620,000 residents while containing soaring health care costs.

A key component establishes a state health benefits exchange, as mandated by new federal health care laws, that will offer coverage from private insurers, state-sponsored and multi-state plans. It also will include tax credits to make premiums affordable for uninsured Vermonters.

The exchange, called Green Mountain Care and managed by a five-member board, will set reimbursement rates for health care providers and streamline administration into a single, unified system.

Residents and small employers will be able to compare rates from the various plans and enroll for coverage of their choosing.

As designed, the goal is an eventual state-funded and operated single-payer system.

But its sponsors say that outcome is far from certain. The plan will be phased in over several years, with an evolving financial structure that mandates a number of conditions.

Among the criteria are adoption of a financing plan by 2014; ensuring the new system costs less than the current fee-for-service one; and obtaining federal permission via a waiver to allow Vermont to proceed with the single-payer option, in around 2017.

Advocates of change say the existing fee-for-service care has a financial incentive to deliver more care, such as tests, with little attention to quality or better outcomes.

The single-payer concept was omitted from the federal health care overhaul championed by President Barack Obama, in part due to Republican criticism it meant excessive government control.

Progressives in Vermont, including Shumlin and U.S. Senator Bernie Sanders, an independent, have worked for years to modify the state's health care system.

Shumlin said he recognized "people have legitimate questions" about how a single-payer plan would be financed and operated.

"We will answer those questions before the legislature takes the next step ... We'll be getting input from all Vermonters moving forward, which is essential."

If the state secures one key federal waiver related to exchanges, Green Mountain Care could begin as early as 2014. Another waiver needed to implement the single-payer component under federal law would not be available until 2017.

Vermont's plan calls for the board to consider the likely costs of coverage, factor in potential savings from reforms and recommended sources of revenue. It is charged with delivering a financing plan to legislators by 2013.

If that plan's single-payer component is adopted, lawmakers would approve a budget annually.

Single-payer proponents say the present system is too expensive and excludes too many residents. Vermont has around 47,000 uninsured and 150,000 underinsured residents.

But critics are wary of what a new program will cost and which taxes would help finance it. It is not yet clear whether it would involve increases such as a higher payroll tax.

The state's health care spending runs about $5 billion annually, with costs rising between 6.5 percent and 8.5 percent in recent years.

Some experts say a revised system would save an estimated $580 million annually, and $1.9 billion by 2019, while creating several thousand jobs.

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Comments (8)
TomMariner wrote:
Now you’re talking. If a state wants to force all of its citizens as a price of state citizenship to join a healthcare cooperative or whatever the organization turns out to be — OK. It is easier to move to a neighboring state than it is to move to another country. Besides, other countries need at least one state that still permits excellent medicine so they can come and save their lives.

But not federal! (By the way, the trading of electronic health records has to be federal and so far is making progress.)

May 26, 2011 8:13pm EDT  --  Report as abuse
Randy549 wrote:
“The single-payer concept was omitted from the federal health care overhaul…in part due to Republican criticism it meant excessive government control.”

This is inaccurate reporting. The Democrats had a majority in the House and a 60-seat, filibuster-proof majority in the Senate at the time the federal health care overhaul was passed. It’s fair to say that nothing in that law was affected to any real extent by Republican criticism. Rather, it was criticism from moderate and conservative-leaning *Democrats* (mainly in the House — the so-called “blue dog” Democrats) that caused the public option to be left out of the legislation.

May 26, 2011 8:53pm EDT  --  Report as abuse
orionbynes wrote:

Wrong, the public option is not single payer. Single payer was not even considered during the health care debate because Obama wanted a bi-partisan agreement which turned out to be a waste of time because the gang of 6 only dragged the debate for partisan reasoning. Also Ted Kennedy died during the debate, which caused them to lose the 60th crucial vote. Therefore they had to use reconciliation to passed the bill the second time in the senate

May 26, 2011 10:03pm EDT  --  Report as abuse
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