Politically thinking: It’s time to start talking about single-payer health care
Peter Shumlin began talking about single-payer health care early in 2010, when he became a candidate for governor. Shumlin has not said much about single-payer recently. Some single-payer advocates wonder whether his administration is still committed to applying for a federal waiver to permit Vermont to establish a single-payer system in 2017, the earliest allowable date under the federal Affordable Care Act.
I see two reasons for the administration’s relative silence on single-payer. First, Shumlin and his colleagues are working to make sure that Vermont Health Connect will have a successful launch in 2014. Vermont Health Connect is the health benefit exchange through which individuals, and employees of small businesses, will purchase health insurance starting next year. Approximately 20 percent of Vermont’s population will be covered by the exchange, which will open for business on Oct. 1 for coverage to begin on Jan. 1.
Second, the Green Mountain Care Board (GMCB), the agency with extensive authority over the state’s health care system, will undergo a change of leadership later this year. Anya Rader Wallack, who has been part of Shumlin’s team since he took office, will step down as chair of GMCB in the fall to rejoin her family in Rhode Island. Wallack is the most knowledgeable person in Vermont, and one of the most knowledgeable people in the entire country, on health care delivery systems, payment reform and cost control, key issues that must be faced in a transition to single-payer.
Shumlin has designated Al Gobeille, a current member of the GMCB, as Wallack’s successor. Gobeille owns several restaurants in the Burlington area and understands health care from the perspective of a small businessperson who pays for health coverage for employees. However, he does not have the breadth of Wallack’s knowledge and experience of the entire health care system.
The administration must present a financing plan for single-payer to the Legislature in early 2015, 18 months from now. To date, there has been no outreach on the preparation of this plan. What mix of income, payroll and other taxes would be used to fund single-payer? How would these taxes compare with premiums now paid by businesses and individuals? What would be the structure of deductibles, co-pays and other out-of-pocket costs in a single-payer system?
Other issues must be considered as well. Vermont Health Connect could expand from covering small businesses to medium-sized businesses; Medicaid recipients; and state, municipal and school district employees. But what about the participants in Medicare, and the employees of large organizations that are covered by federally regulated self-insurance programs? How would these populations, numbering close to one-third of Vermonters, be folded in to a single-payer plan? How would the single-payer benefits and out-of-pocket costs compare with their current plans?
Can the rate of growth of medical expenses in Vermont really be contained? In spite of the GMCB’s best efforts to restrain hospital budgets, medical costs continue to grow faster than inflation, in part because of increased utilization of health care services, in part because there are so many exemptions from the hospital budget caps imposed by GMCB.
What role will payment reform play in restraining cost growth? Does state government intend to move from a fee-for-service model for medical payments to one based on global budgets and capitation (per-person) payments in an integrated health care system? Have physicians, hospitals and other health care providers bought into this change?
If Gov. Shumlin and his administration are serious about implementing single-payer in 2017, they need to begin engaging the public, the Legislature, the medical community and other stakeholders on all of these questions sooner rather than later.
Eric L. Davis is professor emeritus of political science at Middlebury College.