Short Takes On News & Events

Vermont Moving Forward With Its Own Flavor Of Health Reform

By Jessica Marcy

January 19th, 2012, 6:30 AM

Vermont lawmakers are taking steps to move the state toward a publicly-financed insurance program and craft a state health exchange, which is required by the 2010 federal health law and which state officials hope to use as the groundwork for their eventual move to a unique single-payer system.

Vermont Gov. Peter Shumlin (Photo by Vermont Governor's Office via Flickr)

Gov. Peter Shumlin’s administration this week offered a bill to the legislature that lays out a plan for building the exchange, a type of marketplace for individuals and small groups to buy health insurance. The proposal would combine the small group and individual health insurance markets, would bar the sale of health insurance to individuals and small employers outside of the exchange and would define a small employer to be 100 employees or fewer instead of 50, which had been under consideration. The bill also seeks to clarify how the state should integrate Medicaid, the state-federal health program for the poor and disabled, into the exchange.

Under the new system, an independent five-member panel called the Green Mountain Board will also be in charge of reviewing hospital budgets and defining final Certificate of Need as well as making health insurance rate decisions. That board is also working on a transition to a single-payer health system.

Shumlin, a Democrat, put Vermont on a path to single-payer health care last spring by signing a bill, known as Act 48, which seeks to create a new publicly funded and run health program called Green Mountain Care to replace the traditional insurance programs currently offered in the state.

“Act 48 really set up the roadmap for moving forward with single-payer. One stop along the way is the federal insurance exchange,” said Robin Lunge, the state’s director of health care reform. She said the exchange will provide an infrastructure to help reduce administrative health costs and can “be reused as a platform for moving forward with single payer.”

The federal health care overhaul law requires all states to create an exchange by 2014 and provides funds to help; otherwise, states may opt to let the feds set up an exchange for them. Vermont plans to use the federal funds to create an exchange but has already filed a waiver so that it can pursue the single payer system and not have to run two duplicative programs in the future.

Deb Richter, head of Vermont for Single Payer, stressed that the ultimate goal is to create a single-payer system, saying, “I look at this as we want to strengthen the exchange so that as many people can get broad coverage that’s affordable in the meantime.”

Vermont has several other key decisions to make, including how to pay for a single-payer health system. The state has held four public meetings in recent months, where people offered their financing recommendations, and is looking at how other countries, particularly Switzerland and Germany, finance their health systems, Lunge said.

In recent years, nearly a dozen states have introduced some type of single payer type legislation, according to Physicians for a National Health Program, but Vermont has been the only state to get this far.

For instance, California advocates saw their push to pass single payer legislation delayed Tuesday when the Senate Appropriations Committee postponed a vote after legislative analysis showed the state-funded program could cost the state general fund $200 billion a year, according to the Los Angeles Times.

Despite the setback, William Skeen, executive director of Physicians for a National Health Program in California, said, “I think that what’s happening in Vermont really energizes what’s happening in California.”

15 Responses to “Vermont Moving Forward With Its Own Flavor Of Health Reform”

  1. Ted says:

    Traditional health insurance companies ruined America’s health care system while consumers slept. We let the fox run the hen house decades ago. It’s time to remove the fox. Vermont is taking bold steps to remove the very thing that ruined health care. The private insurance companies. I applaud their efforts. Like the Occupy Wall Street movement and like the Arab Spring, I hope single-payer health care goes viral and spreads to every state all across America. The only answer to begin to get the greed out of our health care system is to start by removing the private insurers. The goal? We must make health care more friendly with better outcomes and less costly for the consumer. We must begin to reward wellness and better outcomes. We need to stop rewarding fee-for-service sick care.

  2. Bradford Broyles says:

    What this article doesn’t tell you is Vermonters are aware of a funding model prepared by a reputable group demonstrating multi billion dollar annual deficits. At least California did the funding overview first and hence, how unsustainable it is. Vermont on the other hand is spending substantial tax payer money and legislative time with the cart in front of the horse.

  3. Jack says:

    The left wing lunatics in the Peoples Republic of Vermont strike again. God forbid we have free market competition. Do you really trust the government running your healthcare?

  4. Ted says:

    Insurance companies have been running health care for decades and look where we are. Over 50 million uninsured. About 25 million more underinsured. We spend almost 18 percent of GDP on health care alone while the next most expensive country spend less than 12 percent of GDP. Our infant mortality rate is the highest in the industrialized world whole our average life expectancy is the lowest. Does the USA have the most innovative state-of-the-art health care in the world? Do people from all around the world come to America for state-of-the-art medical treatment? Yes to both questions, but only if you can afford it! Isay insurance companies have had an opportunity to clean things up and stop rescinding policies and stop rationing health care but they chose to put profits first. Maybe it’s time we let the government run things for a change. How much worse can things get?

  5. Blair says:

    With near 600,000 people, a $5.1B annual operating budget, one of the highest tax burdens in the nation, and now legislative authority to more than double the tax burden on every Vermont citizen with another $5.5B in mandates and taxes, I can only hope that sanity prevails before fiscal insolvency occurs. Please stop the madness.

  6. Richard says:

    I trust the government more than I trust greedy corporate executives. At least the government is somewhat accountable to the people. I don’t see private insurers, which basically copy Medicare’s fee schedule, as “competitive”. Their giant overhead can’t compete with Medicare (or any other real private company, for that matter).

  7. Ted says:

    As the evidence trickles in, one thing is becoming perfectly clear. The disaster that Republicans predicted regarding Obamacare has not materialized. In fact, the growth in health care costs in general are tracking lower since the new law was signed. More children under age 26 have health insurance. Seniors are no longer falling into a deep donut hole with regard to Medicare Part D. Many preventive services are now included in policies which are helping to catch serious illnesses in the early stages when treatment is much more effective. No longer can insurance companies drop you just because you got sick. Private insurers “must” spend 80 to 85 percent of every premium dollar on actual health care and not on advertising and corporate compensation. All of these measures are beginning to bend the cost curve downward. The doom sayers were wrong. The Chuck Grassely death panel rumors and scare tactics didn’t happen. The critics and pundants will continue to be wrong. They all said Obamacare would be a massive failure. Guess what? It ain’t! I guess it’s time for the GOP to go brew up another batch of rhetorical kool-aid, huh?

  8. John Spek says:

    I wonder what the state motto will become?

    “Freedom and Unity” just does not seem to fit a single payer mandated participation state.

    “is looking at how other countries, particularly Switzerland and Germany, finance their health systems”

    To make it even more interesting, Switzerland does not have a single payer system, and Germany is having financial challenges in their system, as the tax may need to be raised to over 15% of GROSS INCOME to fund the cost of care.

    Swiss are required to purchase basic health insurance, which covers a range of treatments detailed in the Federal Act. It is therefore the same throughout the country and avoids double standards in healthcare. Insurers are required to offer this basic insurance to everyone, regardless of age or medical condition. They are not allowed to make a profit off this basic insurance, but can on supplemental plans.

    It will be interesting to watch as the state becomes a haven for the poor and uninsured

  9. Richard says:

    As a rule, genuinely chronically ill people could use all the help they can get.

    I agree with your prediction, John, that providing good basic coverage will attract people who would benefit from it — especially if their current state does not do so.

    My understanding is that the federal health care reform bill is supposed to set a minimum standard to prevent (red) states from improving their economic competitiveness by encouraging those who develop a chronic illness to leave. Isn’t that the appropriate role of the federal government?

  10. Mike says:

    Currently i own a small business in VT .
    I can not afford HI for my partner or I.
    And the only thing I see this Bill could bring is the fact
    that being a small business I would be bared from
    buying insurance outside of the exchange .
    In what way shape and form will that help me ?  
    How will limiting competition lower prices to the consumer ?
    What if the price set by the exchanges provider are still unaffordable ?
    Results could be a huge boost in unemployment and uninsured people ?
    If that takes place ……………

  11. Ralph says:

    it will be interesting to see if Gov. Shumlin’s (D-Vermont) proposal passes the taste test of what the “exchange” mandate under Obamacare is supposed to achieve. Presumably, if one can decipher the extremely obfuscated language in the Affordable Health Care law, it is intended to provide the individual or small group purchaser a Chinese menu of a large variety of plans offered by several different vendors, i.e. insurance providers. If one interprets the “exchange” provision in the AHC law correctly, the prospective purchaser is supposed to have many options pertaining to cost, deductability, term, specific coverage, etc. to fit one’s requirements and pocketbook. BUT NOT IN VERMONT!!

    No. Under the Shumlin plan there will be only one provider (possibly two, unless they can’t avoid having more than one), and the options will be limited to deductability (possibly two choices) and term. That’s it. In other words, one and a half sizes will fit all. If that’s what the architects of the Affordable Health Care law intended as being a so-called exchange, then they sure have fooled many millions of people. But then, that’s the way our dictator in Vermont sees things and since he also owns majorities, led by his hand-picked cronies, in both Houses of the General Assembly, more often than not, he gets his way with very little question. We never realized it before, but that’s now what is affectionately called the “Vermont Way.” I sure hope that residents of the other 49 don’t have to genuflect to their CEO the way we do now in the Green Mountain State and that when their “exchange” progtam is initiated, it reflects what we all thought was the intention of Obamacare.

  12. Mike says:

    If what Ralph says is true we will all soon suffer and be forced out of Vermont.
    Manchester continues to offer vacant stores to look at , My guess is they will only have more soon.

  13. John McClaughry says:

    As a Vermonter, I have followed this tortured history for 25 years. The legislature (of which I was then a member) drove all competing health insurers out of the state in 1991 and 1992 to keep them from competing with almost insolvent Blue Cross Blue Shield of Vermont. Gov. Howard Dean’s game (1991-2002) was to load people into Medicaid and cut reimbursement to providers to pay for it, thus driving up private premiums. Now Gov. Shumlin is rushing pell mell into a system like the one now collapsing just across our northern border in Quebec, something our single payer hotheads adamantly refuse to examine – saying “We’re Vermonters- we can make it work.” Yeah, right. So in 3 years the state plans to raise $3 billion in new taxes to pay for this monstrosity. Where can we apply for adult supervision?

  14. Gary Weiss says:

    Ted,

    What’s your real name? Barack? Nancy (Pelosi)? Harry (Reid)?

    I have never seen such ignorance. You claim it’s the insurance companies that have screwed things up. The truth is that the system started to go downhill once the gov’t got involved, beginning with Medicare. Are you aware that the gov’t was already paying for more than 50% of health care costs before Obamacare? The gov’t's mantra was that healthcare was broken. What a joke! What could be more broken than our federal gov’t?

    You claim that Obamacare is working and all the doomsayers are wrong. You fool. I guess you don’t realize that they front-loaded the bill with the benefits to keep the blind and ignorant like you mollified. Wait till you see the taxes kick in next year and thereafter. Wait till you see our gov’t deficits soar beyond where they are even now.

    You alluded to the preventive care and keeping kids on till their 26. While that is good, it also increases the costs to whomever is paying the premiums. Given your ignorance, you probably thought that was free. Much like our brilliant politicians, you probably don’t realize there is a cost to mandated benefits.

    For years, the gov’t has underpaid providers and costs have been shifted to insurance paying consumers. What do think will happen when there are no more insurance companies to pay the higher costs? Like the saying goes, if you think health care is expensive now, wait till you see the cost when it’s free.

    And finally, you should do some fact checking on your statistics. The fact is we do have the best health system in the world, and that’s why people who want the best outcomes come here for their care. If the gov’t got out of the way, it would be even better–and cheaper. But I’m sure that’s not a concept your Socialist mind to grasp.

  15. David says:

    If this so called Single Payer System devised with no adherence to common sense, reality or fiscal responsibility (all attributes of Shumlin and his group) comes to pass, I and my family, and our business, investments et al will depart Vermont the following day along with a veritable caravan of colleagues in southern Vermont. Once a great place to live and to work but greedy social engineering by either very limited or very uneducated minds has killed the Goose and hence lost the Golden Egg.

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