By Neal P. Goswami
Vermont Press Bureau, September 19, 2017
Former Vermont Gov. Peter Shumlin said money, wary lawmakers and timing were the core challenges that ultimately caused his failure to deliver on a promise to implement a single-payer health care system in the state.
The former Democratic governor reflected on that failure Tuesday at a forum at Harvard’s T.H. Chan School of Public Health. Shumlin ran for governor in 2010 on a platform that promised voters a single-payer system.
But he announced after his 2014 re-election bid that his administration would not be moving forward with the plan. He cited the tremendous cost of the program and the burden that would be placed on the state’s limited tax base.
“When you actually get into the numbers and you describe to your people when you move to a premium-driven system to one that’s supported by taxes, the tax rates in Vermont were quite staggering compared to what other people were paying,” Shumlin said. “When I came out and said, ‘Listen, to move from a premium-driven system to a tax-based system you’re going to have an 11.5 percent payroll tax, you’re going to have to have a top 9.5 percent income tax on top of our current state income tax,’ I don’t think that was even the biggest problem.’”
The bigger problem, Shumlin said, was wary lawmakers who feared yearly tax increases to support the system because of growing health care costs.
“I couldn’t with a straight face turn to them and say, ‘No, we’ve got this figured out. There’s going to be so much cost-containment you won’t have to do that,’” the former governor said.
Another fiscal challenge also loomed large — how to build a big enough reserve for the expensive health care system. Shumlin said his administration determined that it would require all of the state’s bonding capacity for a decade to secure a reserve large enough to support the system. That would have prevented the state from bonding for infrastructure improvements during that time.
The changing political winds in Washington was another factor. Shumlin said the Republican takeover of the House and Senate limited the Obama administration’s ability to work with Vermont.
“The [Health and Human Services] secretary said to me, ‘Listen, we want to work with you, we wanted to work with you, but we don’t have the capacity to cut out special deals for Vermont while we’re up there on the hill trying to defend Obamacare,” Shumlin said.
Shumlin, like other governors, was also reeling from the disastrous rollout of the state’s online insurance exchange.
“There was no amending Obamacare because the Republican Congress refused.
“Those things all came together to deliver the most difficult thing I’ve ever had to do, which is turn to the people that elected me and say, ‘We’ve done the work, we’ve done the research, we know how the system would work. This is not fiscally responsible to do in Vermont right now.’”
Shumlin said he opted against forcing the issue on lawmakers who were likely to kill the proposal.
“I chose not to do that. I just felt that really, this was my idea, I owned it and I needed to own its failure,” he said.
Shumlin said he hopes political leaders will push for a national single-payer system as an economic issue and beyond its long-time status as a “fringe, lefty issue.”
“I was wrong. I don’t think little states like Vermont can go it alone,” he said. “I do think that the Vermont story should be an example of how a little state tried, learned, and the lesson should not be no, it should be Hell yes, let’s get it done and let’s do it right, let’s give this benefit to all Americans.”
In Pursuit of a Single-Payer Plan: Lessons Learned
By Peter Shumlin, former Governor of Vermont
Harvard T.H. Chan School of Public Health
30 minute video:
By Don McCanne, M.D.
Although the reason often given for Gov. Peter Shumlin’s withdrawal of the single payer legislation for Vermont was that the taxes would be too high, there were other much more important reasons. The taxes would have been largely offset by reductions in health care spending made through the existing channels, so that wasn’t what was holding it back.
An underappreciated but extremely important factor is that Vermont needed the funds that were being used for Medicare, Medicaid and other federal programs. The glib claims that Vermont merely needed to obtain waivers were belied by the reality. The existing waiver programs would not permit Vermont to dump all funds into a single universal risk pool. The Republican Congress certainly was not going to enact the enabling legislation.
Vermont even dropped the single payer label from its legislation since it was clear that they would not be able to enact a bona fide single payer system. As a result, Vermont would not be able to achieve the savings that a single payer system would bring. Further, it could not establish efficient financing measures that would slow the increase in future health care spending to sustainable levels.
Although Shumlin says that little states like Vermont can’t go it alone, it is really not so much Vermont’s size as it is the hurdles built into the existing health care financing infrastructure. This does not mean that states should not move forward with beneficial measures that can provide some transitional relief until we can establish a universal single payer system.
But he does have a clear message for all of us: “I do think that the Vermont story should be an example of how a little state tried, learned, and the lesson should not be no, it should be Hell yes, let’s get it done and let’s do it right, let’s give this benefit to all Americans.”
Yes, let’s give this benefit to all Americans.
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