Vermont has a plan for single-payer health care

Health blog
Consumer Reports, May 26, 2011

Vermont made history today when Governor Peter Shumlin, a Democrat, signed into law a plan to create the nation’s first state-run “single-payer” health system. If fully implemented, every Vermont resident, including those on Medicare and Medicaid, would be entitled to enroll in the state’s own insurance plan, Green Mountain Care. Private insurers would still be allowed to operate in the state.

The goal is to establish a system in which “health care is a right and not a privilege,” Governor Shumlin told National Public Radio. But the new law doesn’t establish the system right away. Instead, it creates a five-member board that is charged with coming up with options to pay for the system, which are to be presented to the legislature for approval by Jan. 15, 2013.

In addition, there’s the hurdle of getting federal approval to allow Vermonters who have coverage through Medicaid or Medicare to enroll in Green Mountain Care. While the federal government has previously allowed states to experiment with their Medicaid programs, which is a joint federal-state initiative, is hasn’t for Medicare, the nation’s health program for seniors and the disabled.

The Vermont law seeks to comply with—and initially build on—the national reform law. That law was passed in March 2010 but its major elements don’t go into effect until January 2014. For example, the Vermont law creates a web-based insurance “exchange” where residents could compare insurance plans and choose among them. The federal reform law requires that such exchanges be set up in all 50 states. In Vermont, though, one of the options in its exchange would be Green Mountain Care.

The Vermont law seeks eventually to supplant other parts of the federal law as well. For example, it envisions that doctors and hospitals will be paid fixed rates set by the new board and lawmakers, similar to how health systems in Canada and Europe work.

Whether the federal government will grant the waivers could depend on politics. The federal reform law allows states to launch alternative systems starting in 2017. And in February, President Obama endorsed legislation that would move that date up to 2014—a concession to states clamoring for more “flexibility” or to opt out of the law altogether. But states would have to meet stringent conditions, such as covering as many as or more people as the federal law and providing as generous a package of benefits. To date, there’s been no movement on the proposal. Rather, in the House, lawmakers have voted to repeal the entire law or restrict its funding.

Most business groups in Vermont have either opposed the law or been non-committal. Under the law, employers can continue providing workers with benefits through private insurers but will be expected to help finance the new system through a tax, as yet unspecified. Many employers nationwide have been looking for ways to lower their rising health care costs.

Long time single-payer advocates praised passage of the Vermont law but were dismayed that it allowed private insurers to continue operating in the state. “Allowing multiple insurers…will deny Vermonters the enormous administrative savings they would otherwise get under a true single payer plan,” Garrett Adams, M.D., president of Physicians for a National Health Program, said in a statement.