Vermont lawmakers hear about single-payer health care

By Terri Hallenbeck, Free Press Staff Writer
Burlington Free Press, March 19, 2010

MONTPELIER -- An economist who helped Taiwan and other nations create their health care systems told Vermont lawmakers Thursday that a single-payer plan can lower costs, but is not necessarily a foolproof remedy.

William Hsiao, an economics professor at Harvard University, testified before House and Senate health committees as Vermont legislators look for ways to broaden health care coverage while also curbing escalating costs.

“Single-payer can actually lower the level of health spending,” he said of a system where there is a single insurance provider. “Single-payer is probably the most effective tool to reform health care delivery.”

Taiwan was able to shrink the number of uninsured residents from 45 percent to 5 percent in a year after creating a single-payer plan, Hsiao said. In the first two years, costs dropped 8 percent to 10 percent, he said.

A bill from the Senate Health and Welfare Committee would create a panel to come up with three options for a health care plan for Vermont. Committee Chairman Doug Racine, D-Chittenden, noted that that’s the approach Hsiao and others used in Taiwan.

The bill is pending before the Senate Appropriations Committee, which will decide whether to come up with $400,000 to pay for the panel’s work, as the bill seeks.

The bill carries an interesting political dynamic, as Racine, Appropriations Committee Chairwoman Susan Bartlett, D-Lamoille, and Senate President Pro Tempore Peter Shumlin, D-Windham, are all seeking the Democratic nomination for governor and seeking to distinguish themselves among likely Democratic voters for whom health care reform is a key topic. They all have a role in how this legislation proceeds.

Shumlin has ideas about the health care bill that vary slightly from Racine’s and said he would seek to amend Racine’s bill. Instead of a panel producing three options, Shumlin wants the Legislature to hire Hsiao to advise whether the state can create a system that provides universal access, curbs costs, offers quality care and is detached from a person’s employment. of one’s pay 15 years ago to 5.09 percent this year, he said.

Rep. George Till, D-Jericho, asked Hsiao whether a national system could work in a single state where many hospital patients come from neighboring states. Hsiao said he didn’t think the system would create as much savings, but thought it could produce some savings.

Taiwan’s system is different than Racine was expecting. Thirty percent of the cost is paid by the government, 35 percent by payroll taxes on employers and 35 percent by payroll taxes on employees, Hsiao said. Those without an employer pay a premium, except for low-income people, he said. There are co-pays for doctor, clinic and hospital visits and prescriptions, he said.

Shumlin said Hsiao’s trip to Vermont on Thursday came at no cost to the state.

Contact Terri Hallenbeck at 651-4887 or