http://news.yahoo.com/governor-abandons-single-payer-health-care-plan-225042240.html
The 11.5% payroll tax was considered too high. The savings from single payer should have been more than the combined public/private spending from the old system.
I hope Vermont at least attempts to institute some price control measures to bend the cost curve. The real problem with our health system isn’t single vs multi payer, it is that we don’t have the public sector setting transparent prices.
Yeah it’s disappointing but probably not all that surprising. Having very different health care systems from state to state with open borders has the same problem that led to the mandate in the ACA. Its too easy for sick people to flock to Vermont, and healthy people who don’t want to pay the cost flee to other states. If single payer is going to work it probably needs to be done everywhere.
Also if its not going to work it is far better to pull the plug earlier rather than later. If Vermont had tried single payer and gone down in flames, it would be decades before anyone would consider trying it again. Hopefully they can do something like allow of a public option that if it’s good enough can become defacto single payer.
Yeah, if my wife and I had to pay $5,000 to $10,000 more a year on healthcare for other people we would definitely move out of Vermont. The other thing is that local businesses would probably have to raise prices 75% to cover healthcare. I’m glad Gov. Shumlin realized it wasn’t possible before he fucked over everybody in Vermont.
Wouldn’t the extra taxes be offset by lower spending by individuals and employers?
Also why would an 11.5% tax cause prices to rise 75%? Considering the fact that employers wouldn’t have to pay for health care you’d assume that would make up much of that 11.5%. For an employee making 50k a year that is $5750 a year. That is probably a little more than they’d spend for an individual policy, but less than they’d spend on a family policy for that employee.
11.5% is not high at all if that’s all you are paying for health care. But if you get insurance through your job already, it’s a bad deal, and most Vermont workers get health care through their jobs. What incentive did they have to support this program?
There are various reasons to support Vermont’s plan
[ul]
[li]The health care would be more portable than employer insurance, and you’d have it during good times and bad[/li][li]It is a more humane system[/li][li]Their risk of going bankrupt when they get sick would drop dramatically (the majority of people who go bankrupt from medical bills had insurance when they got sick)[/li][li]The plan would’ve bent the cost curve in Vermont, making their health system less expensive[/li][li]Single payer does not have narrow networks or out of network providers within the state[/li][/ul]
Again, the savings from employers not having to buy insurance should’ve offset much of that 11.5% tax one would assume. Maybe not all of it but much of it.
That assumes employers would stop offering health insurance. It was a no-win situation for employees. They either lose their insurance and end up in a single payer system, or they would have their insurance and pay an 11.5% payroll tax and a 9% income tax.
I had hoped that Vermont could make it work, but frankly I suspect it’ll take one of the big states to really get it to work first. A state like California or New York theoretically has a lot more resources to do something than Vermont does.
They don’t have room to raise taxes by the amount necessary. It’s per capita resources that matter, and Vermont has plenty. What Vermont doesn’t have is the ability to raise taxes so much because they already spend so much. That’s the problem with big government. Eventually you run out of other people’s money. Vermont found that they already had the people’s money. THey couldn’t exactly raise more of it and expect anyone to actually stay.
And didn’t Vermont also get to keep the expanded Medicaid funds as well? I assume the two huge taxes weren’t the only funding source for this plan.
The state that would make a plan like this work would be one with low taxes and a high uninsured rate. That way, a lot of people benefit and the new taxes don’t create a massive burden on the people. What was Vermont’s uninsured rate, 5%? What problem was this single payer plan supposed to solve? It was a pure ideological dream with no practical benefit for a state like Vermont. Texas needs single payer, Vermont’s doing just fine.
Shumlin didn’t have a lot of option. His team could’t make the numbers work (and believe me, they are True Believers – they really tried), and Shumlin came within a percent of losing to a complete unknown. In fact, he isn’t out of the woods yet; he failed to get a majority, and under Vermont law the Legislature chooses the winner. It is all but certain that the heavily Democratic legislature will pick the top vote-getter (Shumlin), but I wouldn’t be surprised if he lost.
If he had tried to carry forward with the bad numbers, he might just have managed to pull defeat rrom the jaws of victory.
Agreed. Maybe if Vermont was able to team up with the other New England states things would be different (though it’s hard to imagine NH going along).
For those of us who do not have an anti-statist ideology there isn’t much difference in paying $1000 in taxes vs paying $1000 in private funds. The money in higher taxes should be offset by lower private spending. I see no reason to believe that people in Vermont would still pay for expensive private insurance on top of a public system, unless Vermont suddenly decided to spend 25% of GDP on health care overnight. Even if people kept their private insurance, due to the public system covering so much more the cost of private insurance should drop. I believe in places like Australia where the public system covers most things private insurance is fairly cheap ($50/month maybe, I don’t recall. It is far less than the $500+ a month it costs here).
And again there are many benefits to single payer other than expanded access:
Bends the cost curve
Lowers administration costs
Is a more humane system
Is an ideological victory for progressives
Reduces the risk of going bankrupt due to medical costs
I have an anti-state ideology and even I don’t care whether I pay $1000 to the state or to a company.
You’re asking people to give up insurance they like in a state where lack of insurance isn’t much of a problem. Do you think any union employee would give up their cadillac plan? Yet they’d still be on the hook for the single payer taxes.
The cost would drop eventually. It’s the transition that would be problematic. Few would willingly just drop their highly discounted employer insurance in order to test out Vermont’s brand new Medicaid.
It CAN do those things. Judging by the price tag, initially it was not intended to do those things. Vermont was going to charge a lot and were still going to need federal funds on top of it. To start off, it was probably going to have to be super generous to avoid a revolt. You can’t cut costs in an environment where everyone expects single payer to be just like their cadillac plan. And the politicians certainly aren’t going to sell it by saying it will cover less.
Starting single payer in the 21st century is impossible. This isn’t the 1940s or even the 1970s, when health care was much less advanced than it is now and consumers didn’t have generous private plans covering some pretty expensive stuff. No one with good private insurance is going to give it up willingly.
The only place you can do single payer is a place where people don’t have good health care plans already. Vermont may have ideologically been the best place to do single payer, but it’s actually the worst place because Vermont is prosperous and people are already insured and satisfied with their insurance. This was a solution in search of a problem.
Pity. I was curious if they could pull it off and then subsequently secede and become our 11th province.
My! I was expecting something like 5-7%!
adaher’s argument kind of makes me wonder… If a single payer plan could somehow allow companies to stop having to offer health insurance (since the coupling seems to be a frequent complaint/problem with the current system), I wonder if it’s possible to sell that way, especially if more companies move in to the places where this is done, and if (admittedly a big if) said companies change benefits to reflect that.
Of course, what the employees move to still has to be attractive in SOME way. Hmm.
As a semi hijack, what was Vermont going to do about retirees? Other countries with UHC probably don’t care about retirees moving to their countries as much since a) they can vet them to make sure they are rich enough, and b) they will definitely spend in the local economy. Whereas Vermont is small enough that if things get expensive you can just go to other states to buy stuff, and it has fewer* levers with which to prevent people from moving there.
For me, as long as it didn’t raise property values too much, it would make Vermont as attractive as Upstate New York for retirement, since property values in Vermont are higher than NY for the same general type of area, but it would be balanced out by cheaper health care. (And of course, apropos of the topic, the sicker I’d be, the more attractive Vermont would be!)
*They could raise property taxes in addition to payroll taxes, which would capture retirees, even those renting since landlords would pass on the taxes in higher rents.
Well, with retirees, at some point Medicare would still kick in. But if you’re talking, say, 55+ but before Medicare eligibility, I get your point.
The single payer plan would have allowed companies to drop their insurance. The question was whether employees would prefer to keep their company insurance or do the single payer plan. In a best case scenario, employees voluntarily stop buying health insurance through their employer and flock to the public plan. But that would only happen if the public plan was just as generous, which means the single payer plan wouldn’t save much money.
So again, what was supposed to be the benefit here, other than to satisfy purely ideological desires?
This didn’t surprise me; I think anyone local paying enough attention should have seen it coming a mile away.
Not only was funding going to be a challenge, but implementation . . . the debacle with VT Health Connect (the online exchange) made it clear that the state doesn’t have the expertise (or doesn’t know where to go to find it) to manage a large project like this.
This morning on the radio I heard protesters at the state house declaring their anger at Shumlin for “punching them in the gut.” Perfect example of ideology getting in the way of reality. Barring some plan to significantly deflate the medical industry, I’m all for ACA, single payer, or any reasonable experiment to get affordable healthcare into the hands of everybody and protects people from finance-ruining medical bills for common procedures. The VT plan, at this point in time, just wasn’t going to happen. What did they expect, for him to wave his magic wand and make it work just because they wanted it to?