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Taxes instead of premiums
By Ellen Oxfeld
Times Argus (Barre & Montpelier, Vt.), Letters, Sept. 16, 2013
The headline of your Sept. 5 article states, “Shumlin to rely on payroll tax hikes” to fund single payer. However, this headline would be equally accurate if it stated, “Gov. Shumlin to implement the largest single premium decrease in U.S. history.” Indeed, as the article itself makes clear, taxes to fund a health care system for all Vermonters (single payer) will replace and not add to premiums, and thus they will not constitute a hike in payments for health care at all.
Further, by replacing private premiums with public financing, we will get much more than we ever could under the current system. Let’s not forget that single payer means guaranteed health care for all Vermonters regardless of employment status. It means no more worries about going bankrupt due to high out-of-pocket costs that even the insured often face. Single payer also means greater simplicity for employers, who will no longer have to waste precious time overseeing the complex paperwork of private health care plans, as well as for providers, who will no longer have to bill many different private plans.
Our current system of patchwork coverage and fragmented financing is expensive, and despite this, we still do not have universal access to health care. Single payer means financing a health care infrastructure in a streamlined way. And it means health care will be there for all of us when we need it. That is why Gov. Shumlin is on the right track in his commitment to implementing a publicly funded health care system for all Vermonters by 2017.
Ellen Oxfeld lives in Middlebury.
http://www.timesargus.com/article/20130916/OPINION02/70916996
Why we need a National Health Plan
By Paul L. Burnley
Fayetteville (N.C.) Observer, Sept. 12, 2013
The objection to a national health plan by many of our lawmakers is similar to the reaction years ago to the Social Security program. It was seen as a tax-imposed on the public by the government. It was thought to be a struggle between the conservatives and liberal factions of government when, in reality, the only people affected by these programs are the poor, those who are at the bottom of the political spectrum.
Many believe a national health program is also a tax imposed on the public by the government. When the Social Security program began, there were those who said, “Why should the government take money from my paycheck to save for my retirement? I can save that money myself. How do I know I will live to retirement?” Today, millions are able to live and maintain themselves because of this program.
As for a national health insurance program, it will affect those who are not able to afford health insurance. If you are in an income bracket where you are able to pay for any and all medical emergencies, I can understand your reluctance about a national health program. But the majority of the residents of North Carolina are not in that income bracket.
Brokering the middle
I am not in favor of the government running the lives of its citizens; however, in some cases there must be an overseer that is fair and reasonable. If some issues that affect the general population were left to individual states, as they were years ago, they would be abused. That’s especially so in some Southern states, where the “good old boy” process was upheld. I can imagine the abuse that would have taken place had certain states been in control of the Social Security program.
Medical bankruptcy
The lack of medical insurance is the cause of many economical disasters, not only for individuals, but for communities. Many lose time from their jobs, because of illnesses that would be treated if medical insurance were available.
The majority of bankruptcies in this country are caused because of medical bills that people are not able to pay, due to the lack of medical insurance. If there were a national health program, many of these problems would not exist.
There are those who say, well, now we have Medicare. That should take care of most of the medical problems. This only covers those over 65 years of age, or those unable to work. This leaves the majority of the public out of the loop. This is why,when there are any free medical services offered by groups trying to address this situation, they are overwhelmed by people needing medical attention.
I am not saying that all elements of our lives should be controlled by the government, but when it comes to a large segment of the population, the decision should not be left to local or state authorities. In many cases opinions are governed by political, racial and social attitudes and choices. Had Social Security been administered by the states, millions of people whose income is derived from Social Security would not have received it.
Paul L. Burnley is a retired newspaper writer and editor and a former member of the Observer’s Community Advisory Board.
http://www.fayobserver.com/articles/2013/09/13/1282406?sac=fo.opinion
Sen. Bernie Sanders on single payer
A single-payer system makes economic sense
By Sen. Bernie Sanders (I-Vt.)
The Hill, September 10, 2013
Americans spend about twice as much per capita on healthcare as almost any other developed nation, but our outcomes are not as good as others that spend much less. We can do better. We must do better.
Today, some 50 million Americans lack health insurance. Many others delay going to the doctor because of high deductibles and unaffordable copayments. While the number of uninsured Americans will go down with the implementation of the Affordable Care Act, widely known as ObamaCare, tens of millions of Americans will remain uninsured.
The goal of an effective healthcare system is to do everything possible to enable people to live long and healthy lives. Sadly, the American system fails to do that and falls behind many other countries. While we devote 18 percent of our gross domestic product to healthcare, we rank 33rd in life expectancy and 34th in infant mortality, and trail in many other health outcomes. A Harvard University study indicated that, incredibly, some 45,000 Americans die needlessly each year because they do not get to a doctor in time.
I start my approach to healthcare from a very basic premise: healthcare is a right, not a privilege. Unfortunately, uniquely among major nations, that statement is not true for the United States, where access to healthcare depends on how much money you have and what your employer is willing to provide.
It is simply unconscionable that the most advanced nation in the world has so many people who lack health insurance. It makes no sense that millions more are one diagnosis or car accident away from financial disaster. And, despite the trillions of dollars we spend on healthcare, the disparity in the quality of care between the rich and everyone else grows wider.
Our system doesn’t make economic sense, and it certainly doesn’t make moral sense. In a civilized, democratic society, every man, woman and child must be able to get the medical care they need regardless of income.
It is incomprehensible that drug companies still get away with charging Americans twice as much — or more — than citizens of Canada or Europe for the exact same drugs manufactured by the exact same companies. It is an outrage that insurers still want to hike premiums by as much as 60 percent a year on individual policyholders.
It boggles the mind that approximately 30 percent of every healthcare dollar spent in the United States goes to administrative costs rather than to delivering care. Taiwan, for example, spends only a little over 6 percent of its GDP on healthcare, while achieving better health outcomes on some key indicators than we do. The reason, of course, is that they spend a fraction of what we do on administrative costs.
If our goal is to provide high-quality healthcare in a cost-effective way, what should we be doing?
Clearly, we must move toward a single-payer system.
The health insurance lobby and other opponents of single-payer care make it sound scary. It’s not. In fact, a large-scale single-payer system already exists in the United States. It’s called Medicare. People enrolled in the system give it high marks. More importantly, it has succeeded in providing near-universal coverage to Americans over the age of 65.
Establishing a single-payer system will mean peace of mind for all Americans. When health insurance is no longer tied to employment, people will not fear losing both their job and their family’s access to healthcare. Millions of Americans won’t have to stay in jobs they don’t like because their family needs healthcare. Entrepreneurs and small businesses will be free to develop their business plans without worrying about the cost and complexity of providing healthcare for themselves and their employees.
For these reasons and more, Rep. Jim McDermott (D-Wash.) and I have introduced the American Health Security Act, which would guarantee healthcare as a human right and provide every U.S. citizen and permanent resident with healthcare coverage and services through a state-administered, single-payer program.
I am very proud that my home state of Vermont is now taking big steps to lead the nation in healthcare by moving forward on a plan to establish a single-payer healthcare system that puts the interests of patients over corporate profits. The American Health Security Act would make sure every state does the same.
The goal of real healthcare reform must be high-quality, universal coverage in a cost-effective way. We must ensure, to as great a degree as possible, that the money we put into health coverage goes to the delivery of healthcare, not to paper-pushing, astronomical profits and lining CEOs’ pockets.
http://thehill.com/special-reports-archive/1549-healthcare-september-2013-/321477-a-single-payer-system-makes-economic-sense
Comment:
By Don McCanne, M.D.
Although the nation is distracted with the implementation of the Affordable Care Act, the single payer concept is not going to go away. Soon the nation will understand why.
AFL-CIO reaffirms support of single payer
2013 Convention
AFL-CIO
September 11, 2013
Adopted Resolutions
Resolution 54: AFL-CIO Convention Resolution on the Affordable Care Act
WHEREAS, in 2009, the AFL-CIO Convention passed two health care resolutions—Health Care Reform Now and the Social Insurance Model for Health Care Reform—which reaffirmed the labor movement’s commitment to health care for all, ultimately through a single-payer system. In 2010, Congress passed the Affordable Care Act (ACA);
(23 more WHEREASs)
NOW, THEREFORE, BE IT RESOLVED, that the AFL-CIO reaffirms the health care resolutions adopted by the 2009 convention, including the commitment to pursue health care for all ultimately through a single-payer system;
(8 more BE-IT-FURTHER-RESOLVEDs)
http://www.aflcio.org/About/Exec-Council/Conventions/2013/Resolutions-and-Amendments/Resolution-54-AFL-CIO-Convention-Resolution-on-the-Affordable-Care-Act
Comment:
By Don McCanne, M.D.
There are two important health care reform issues before us today. The most important by far is that this nation desperately needs a single payer system. The other is that the Affordable Care Act is well on its way to being fully implemented, with all of its intolerable flaws. Yesterday, AFL-CIO passed a resolution dealing with both of these.
The first WHEREAS and the first BE-IT-RESOLVED reaffirmed organized labor’s support of single payer reform. It is an imperative.
The other twenty-three WHEREASs and eight BE-IT-FURTHER-RESOLVEDs can be accessed at the link above. They concern very serious flaws in the Affordable Care Act, especially applicable to union members, which will be very difficult to correct. They are important to understand because flaws such as these permeate the entire Act.
Maintaining and expanding our highly dysfunctional health care financing system while adding administrative complexity is precisely what we did not need. All of this could have been avoided by moving directly to a single payer system. We can still do that, even if we have already wasted much time and money, while prolonging hardship and suffering.
Although organized labor’s targeted attack on the Affordable Care Act is making headlines today, they passed another resolution that is also very important:
Resolution 15: Protecting and Expanding Medicare Benefits
Excerpts:
Instead of cuts and cost shifting, we call for improvements to Medicare. Doing so is an essential prerequisite to establishing it as a model for a universal, single-payer system.
Instead of looking for ways to destroy Medicare, which has been a leader in improving our dysfunctional health care system, we must build on its experience as a single-payer program, demonstrating that single payer is the most cost-effective and equitable way to provide quality health care.
http://www.aflcio.org/About/Exec-Council/Conventions/2013/Resolutions-and-Amendments/Resolution-15-Protecting-and-Expanding-Medicare-Benefits
AFL-CIO reaffirms commitment to single payer, demands fixes to ACA
By Kay Tillow
Single Payer News, Sept. 12, 2013
The just-concluded AFL-CIO convention in Los Angeles reaffirmed its commitment to a single-payer health care system while demanding that the Affordable Care Act (ACA) be fixed to protect Taft-Hartley (multi-employer) plans, to end the excise tax, to make employers cover workers who average 20 hours a week, to require construction companies with five or more employees to provide health care, to penalize companies who dump their workers onto Medicaid, plus more.
Some of the debate on the resolution can be seen here:
http://www.youtube.com/watch?v=vpVOf9Qsmno
Full text of the resolution can be found here:
http://www.aflcio.org/About/Exec-Council/Conventions/2013/Resolutions-and-Amendments/Resolution-54-AFL-CIO-Convention-Resolution-on-the-Affordable-Care-Act
Distributed by All Unions Committee for Single Payer Health Care–HR 676, c/o Nurses Professional Organization (NPO), 1169 Eastern Parkway, Suite 2218, Louisville, KY 40217. Phone: (502) 636-1551. E-mail: nursenpo@aol.com. http://unionsforsinglepayer.org
Other media coverage:
AFL-CIO heads off health care fight by criticizing, not dumping, Affordable Care Act
By Mark Gruenberg
Press Associates Union News Service, Sept. 11, 2013
LOS ANGELES – Leaders of the AFL-CIO headed off a knock-down drag-out fight over the Affordable Care Act – the Obama administration’s signature 2010 health care law that organized labor strongly supported – with a compromise resolution that specifies the act’s ills and puts the administration on notice they must be fixed.
But if they aren’t fixed, Laborers President Terry O’Sullivan said, the ACA should be dumped.
The health care fight was the most open controversy at the four-day convention. A compromise headed off another battle, where the building trades unions questioned the role and power of nonunion groups – particularly environmentalists – in labor’s councils. Complaints about lack of protection against inter-union raiding were diverted to the federation’s executive council, with a February 2014 reporting deadline.
But the health care fight couldn’t be headed off.
The resolution and several union leaders said administration’s interpretation of the ACA would virtually trash multi-employer health care plans, which cover 20 million people – workers, retirees and their families – nationwide.
Those plans, prevalent in construction, but present in other industries – such as food processing and seafaring – let joint union-management boards run health care plans that cover workers who frequently shift from job site to job site in an industry.
“If the ACA is not fixed, if it destroys the health and welfare funds we fought for, it needs to be repealed!” O’Sullivan roared. “The proud men and women we represent cannot be collateral damage” of the health care law.
“The ACA as it currently stands is not meeting its promise,” added IBEW President Ed Hill, whose union and five others openly wrote congressional leaders saying they must fix the health care law.
“This is make-or-break for a lot of unions, not just the building trades,” warned Sheet Metal Workers President Joe Nigro. “A resolution is a piece of paper and may offend a lot of politicians, but a labor movement is run by leaders who represent working men and women. …You let the ACA bill go through like this and you won’t need a room a quarter of this size” for the next federation convention four years from now, he added.
“We have to follow this with action,” declared Unite Here President D. Taylor, after reminding delegates of ACA’s benefits – and of exceptions Obama already illegally granted to businesses, congressional staffers and to some religious-run enterprises.
Dissent also came from those who want to go further. Though both federation President Richard Trumka and Professional and Technical Engineers President Greg Junemann said the eventual goal of the resolution is single-payer government-run national health care, the compromise downplays that goal.
The other dissenter was Kathryn Donahue, board member of the California Nurses Association/ National Nurses Organizing Committee. Her union stayed away from the convention until its final session due to, among other issues, disagreement about the ACA. CNA/ NNOC, part of National Nurses United, has been one of labor’s most ardent advocates of single payer, which 21 unions endorsed before the AFL-CIO’s 2009 convention.
“The ACA does not solve the health care crisis facing all of the people, not just union people,” Donahue declared. “It will not improve access to health care” and “will not remove health care from collective bargaining,” she said. Her union provided the scattered “no” votes in the crowd when delegates approved the health care resolution by voice vote. The resolution specifies, among other things, that:
• The AFL-CIO backs single payer – along with other alternatives it OK’d in 2009.
• Demands Congress amend the ACA unless the act is “administered in a manner that preserves the high-quality coverage” of multi-employer plans.
• Says the multi-employer plans “should have access to the ACA’s premium tax credits and cost-sharing reductions … just as for-profit insurance companies will.” The difference between the two has been the big problem in private talks Trumka and other union leaders have had with White House staffers. The White House has stonewalled.
• Says workers toiling more than 20 hours a week must be covered by ACA’s employer responsibility rules. The ACA now sets the lower limit at 30 hours per week. Several speakers at the convention said private firms – and some state and local governments – are racing to cut full-timers to 29 hours, to get out from under the act.
• Declares the employer responsibility rules should extend to construction companies with at least five employees, not 50. The 50-worker rule would exempt the overwhelming majority of construction firms, building trades leaders say.
• Reiterates unions’ strong opposition to taxing health care benefits. Obama strong-armed the AFL-CIO, at the end of the 2010 health care fight, into accepting such a tax on so-called “Cadillac” plans, in 2018.
Mark Gruenberg is editor of Press Associates Union News Service, 2605A P Street NW, Washington DC 20007. Phone: (202) 898-4825. E-mail: paiunionnews@yahoo.com. www.paiunionnews.com
AFL-CIO Convention Calls for Fixes in Affordable Care Act
By Mike Hall
AFL-CIO NOW blog, Sept. 11, 2013
Delegates to the AFL-CIO Convention this afternoon passed a resolution expressing support for the goals of the Affordable Care Act (ACA) but also addressing a number of issues about the ACA’s implementation, including the way the ACA treats multi-employer health care plans. The resolution reiterates that the labor movement’s ultimate health care goal is health care for everyone under a single-payer model.
The resolution calls for preservation of high-quality coverage under multi-employer plans. It also calls for greater employer responsibility, especially in regards to part-time workers. Sean McGarvey, president of the AFL-CIO Building and Construction Trades Department (BCTD), said the resolution, “Points out the key facts that must be addressed by the administration and if needed, by Congress.”
AFL-CIO President Richard Trumka called the issues raised by the resolution ones of “fundamental fairness,” including if low- and moderate-income union members and their collectively bargained health care plans will
be able to benefit from the same premium support that big insurance companies will receive and if they will have to pay fees to subsidize big insurance companies. There also are concerns that smaller employers will be able to get away with taking health care away from workers while paying no penalty.
Laborers (LIUNA) President Terry O’Sullivan, who endorsed the resolution, told the convention delegates that without changes to the way the ACA is implemented, there are likely to be “unintended consequences” that will hurt workers’ health care coverage.
It needs to be changed and fixed now….We will work with the president to do everything we can to fix the Affordable Care Act….We want it fixed, fixed, fixed.
AFT Secretary-Treasurer Lorretta Johnson called the resolution “a road map to making the Affordable Care Act a success” and called the ACA, especially in the way it is being implemented by the federal agencies involved, “a work in progress.” She also said many AFT members, including para-professionals, adjunct college professors, nurses and public employees, have had their hours cut to under the 30-hour week threshold they must work before ACA requires employers to provide affordable, comprehensive health care coverage or pay a penalty.
Trumka did tell the delegates that “the labor movement is engaged in ongoing dialogue with a number of government agencies regarding implementation of the Affordable Care Act — especially the way it treats collectively bargained multi-employer funds.”
http://www.aflcio.org/Blog/Political-Action-Legislation/AFL-CIO-Convention-Calls-for-Fixes-in-Affordable-Care-Act
AFL-CIO steps up criticism of health care law
By Sam Hananel
The Associated Press, Sept. 11, 2013
WASHINGTON (AP) — The AFL-CIO on Wednesday approved a resolution critical of parts of President Barack Obama’s health care law in spite of efforts by White House officials to discourage the labor federation from making its concerns so prominent.
The strongly worded resolution says the Affordable Care Act will drive up the costs of union-sponsored health plans to the point that workers and employers are forced to abandon them. Labor unions still support the law’s overall goals of reducing health costs and bringing coverage to all Americans, the resolution says, but adds that the law is being implemented in a way that is “highly disruptive” to union health care plans.
Some individual unions have complained about the law’s impact for months. The resolution marks the first time the nation’s largest labor federation has gone on record embracing that view. Unions were among the most enthusiastic backers of the law when it passed in 2010.
A labor official told The Associated Press that White House officials had been calling labor leaders for days to urge them not to voice their concerns in the form of a resolution. The official, who wasn’t authorized to discuss the conversations publicly and requested anonymity, said many union leaders insisted that they wanted to highlight their concerns.
Asked about any efforts to discourage unions from passing the resolution, the White House said in a statement Wednesday night that officials “are in regular contact with a variety of stakeholders, including unions, as part of our efforts to ensure smooth implementation and to improve the law.”
The AFL-CIO, one of the president’s major boosters, approved the resolution just as the administration began rolling out a multimillion-dollar advertising campaign to encourage Americans to sign up for health care exchanges starting Oct. 1.
Harold Schaitberger, president of the International Association of Firefighters, said the intent of the resolution is to “point out the criticisms without being overly caustic.”
“There have to be some changes made in the area that are giving a number of our unions great concern,” said Schaitberger, who chaired the committee that hammered out the resolution’s language.
The resolution was approved at the AFL-CIO’s quadrennial convention in Los Angeles. It claims the new law will increase costs for health plans that are jointly administered by unions and smaller employers in the construction, retail and transportation industries. That could encourage employers to hire fewer union workers or abandon the health plans altogether and force union members to seek lower-quality coverage on the new health exchanges.
Union officials are seeking rule changes that would make their low-income workers eligible for the same types of federal subsidies they could get in the exchanges. They have also suggested rules that would treat their multi-employer plans as qualified exchange plans under the new law.
But the Congressional Research Service issued a memo earlier this year finding that neither change is allowed through rulemaking. The AFL-CIO resolution calls for the law to be amended by Congress if new rules cannot satisfy their concerns.
AFL-CIO President Richard Trumka held meetings at the White House last month in which he and other union leaders pressed the administration to make changes. Trumka has said he is encouraged that the White House is listening, but that no firm proposals have been made.
In a statement issued earlier Wednesday, the White House said there is nothing in the Affordable Care Act that changes the law for union plans. The statement said the White House would continue to work with unions and other stakeholders on ways to ensure smooth implementation of the law.
The AFL-CIO resolution was toned down from a draft originally offered by Sean McGarvey, head of the AFL-CIO’s Building and Construction Trades Department. The early draft said the AFL-CIO could no longer support the health care law and called for its repeal unless changes were made to protect union multi-employer plans.
Republican critics of the health care law have seized on the union complaints to fuel their push to repeal the law. At the same time, GOP leaders have warned the White House against carving out any special deal for unions.
“We will do whatever is within our power to ensure that the administration does not once again provide a special exemption to unions at the expense of American taxpayers,” Michigan Rep. Dave Camp and Utah Sen. Orrin Hatch wrote in a letter this week to Treasury Secretary Jack Lew. Camp is chairman of the House Ways and Means Committee and Hatch is top Republican on the Senate Finance Committee.
http://www.usnews.com/news/politics/articles/2013/09/11/afl-cio-steps-up-pressure-for-health-law-changes
Michael Hiltzik: To fix health law, go single-payer
Health law's ailments can be cured by single-payer system
By Michael Hiltzik
Los Angeles Times, September 10, 2013
All the shortcomings of the healthcare restructuring result from the decision to leave it in the hands of private insurers.
With the Oct. 1 rollout of a major facet of the Affordable Care Act on the horizon, you’ll be hearing a lot about the glitches, loopholes and shortcomings of this most important restructuring of America’s healthcare system in our lifetimes. Here are a couple of things to keep in mind:
First, the vast majority of these issues result from one crucial compromise made in the drafting of the 2010 law, ostensibly to ease its passage through Congress. That was to leave the system in the hands of private health insurance companies.
Second, there’s an obvious way to correct this flaw: The country should progress on to a single-payer system.
The idea that the ACA is a logical precursor to single-payer, in which the government would be the source of all medical reimbursement, has been gaining traction as key thresholds for healthcare reform approach. The biggest milestone is the Oct. 1 launch of open enrollment for the health insurance exchanges that will offer individual insurance starting Jan. 1.
Last month, Senate Majority Leader Harry Reid made that point in a Nevada news broadcast, calling the ACA “a step in the right direction” but adding that the U.S. would have to “work our way past” private insurance-based healthcare. “We’re far from having something that’s going to work forever,” he said.
“There isn’t a popular groundswell yet” for a single-payer plan “because most people haven’t seen the ACA at work in detail yet,” says David Himmelstein, a professor of public health at the City University of New York and co-founder of Physicians for a National Health Program, the leading advocacy group for single-payer healthcare. But he anticipates that discontent will start in October “and accelerate through the winter.”
Among the law’s shortcomings, he says, are the lack of effective provisions to control healthcare costs and insurance premiums. Premium regulation remains in the hands of the states, and many don’t have strong regulatory oversight of health insurance. In California, health insurance premiums are exempt from prior approval by the insurance commissioner, unlike home and auto insurance. (An initiative to remove the exemption will appear on the November 2014 ballot.)
That’s not to say that the ACA won’t make health insurance more affordable and accessible to millions of Americans now excluded from the market. Published exchange premiums in 18 states have generally come in below expectations, and the federal subsidies available to most buyers will make them cheaper still.
In some cases the premiums may be higher than those of plans on the market now. But because of exclusions for preexisting conditions — which will no longer be legal — they’re actually unavailable at any price to people who will have no trouble qualifying for the exchange plans.
The ACA’s critics observe that a plurality of Americans still view the ACA unfavorably (43%, according to an opinion poll released in June by the Kaiser Family Foundation). They rarely acknowledge, however, that nearly 1 in 5 of those critics think the law doesn’t go far enough — that is, further toward single-payer.
In its earliest incarnation, the Affordable Care Act included a prototype government single-payer provision — the “public option,” a government-sponsored plan to compete with commercial insurers in the exchanges. The public option was deleted at the insurance industry’s insistence.
But the U.S. does offer a healthcare program that resembles single-payer. It’s Medicare, the broadly popular health plan that covers all Americans over 65. Medicare’s administrative costs are only about 2%, and its size gives it the clout to extract large discounts from doctors and hospitals. That’s why one oft-proposed version of single-payer is “Medicare for all” — simply expand its coverage beyond the 65-plus.
Canada’s single-payer system is another model. It’s popular and efficient and costs about one-third of America’s system to administer. Don’t believe the myths purveyed about Canada’s healthcare by the U.S. insurance industry’s minions.
As health economist Aaron Carroll has documented, Canadian patients and doctors are satisfied with the program. As for the contention that it “rations” care, he points out that care in the U.S. is rationed by cost: one-third of adult Americans surveyed by the Commonwealth Fund in 2010 said they had put off important treatment because of the cost. In Canada, the figure was 15%.
There’s little question that taking private insurers out of the American healthcare system would save hundreds of billions of dollars a year. Dozens of studies of federal and state single-payer proposals have found that single-payer plans could provide universal coverage — not even the ACA does that — and still save money.
Estimates of the administrative costs of commercial health insurers exceed 10%. That doesn’t include the costs to doctors and hospitals of maintaining billing staffs to deal with insurers and keep all their rules and peculiarities straight, or the time lost to individuals and their employers of navigating this unnecessarily byzantine system.
Add those, and the overall administrative costs embedded in the U.S. healthcare system come to 31% of all spending, according to a 2003 article co-written by Himmelstein for the New England Journal of Medicine. Administrative and clerical workers accounted for nearly 44% of all employees in doctors’ offices, they calculated.
What do Americans receive in return for all this overhead? Practically nothing. The insurance industry says its role is to hold down costs by negotiating for preferential fees from doctors and hospitals and trolling for abuses, but the truth is they’re totally ineffective at cost control.
Just last year I reported on an admission by Aetna and United Healthcare, two of our biggest insurers, that they had been snookered to the tune of $60 million by one chain of small surgical clinics in Northern California. That happened because the insurers didn’t hire enough staff to give the claims from those clinics decent scrutiny — in other words, their administrative costs, high as they were, didn’t buy adequate oversight.
The result, to cite just one example, was that United paid the chain more than $97,000 for a kidney stone operation that it usually covers for $6,851.
“Private insurance is a parasite in the system,” says Arnold S. Relman, the former editor of the New England Journal of Medicine and an advocate of healthcare reform. “It adds nothing of value commensurate with its cost.”
Relman believes that fixing the healthcare system will require more than single-payer. The delivery of care needs to be reorganized by promoting the formation of more “accountable care organizations” — medium- and large-scale group practices with hospital affiliates whose physicians would be salaried to discourage the overuse fostered by the fee-for-service system.
What’s really needed is political will. It would help if big companies, which grouse incessantly about the rising costs of covering their employees, would throw their weight behind a system that would relieve them of that burden.
The forces of opposition won’t l
ie down; the insurance industry won’t give up its central role in the healthcare system without a costly and bruising fight, as it showed in Congress and in numerous states, including California, where single-payer plans were on the table.
“It’s going to be a slow and painful process,” Relman says. “But sooner or later we’ll have to turn to single-payer. It’s the only logical solution.”
http://www.latimes.com/business/la-fi-hiltzik-20130911,0,2211922.column
Comment:
By Don McCanne, M.D.
This is an article that you should share with your friends and others who may not have an adequate understanding of single payer. If this kindles an interest in them, which it certainly should, then let them know that they can learn more by accessing the website of Physicians for a National Health Program at www.pnhp.org.
My gosh, who wouldn’t want a lifetime of guaranteed, affordable health care, free of the intrusions and inherent waste of the private insurance industry?
A single-payer system makes economic sense
By Sen. Bernie Sanders
The Hill, Sept. 10, 2013
Americans spend about twice as much per capita on healthcare as almost any other developed nation, but our outcomes are not as good as others that spend much less. We can do better. We must do better.
Today, some 50 million Americans lack health insurance. Many others delay going to the doctor because of high deductibles and unaffordable copayments. While the number of uninsured Americans will go down with the implementation of the Affordable Care Act, widely known as ObamaCare, tens of millions of Americans will remain uninsured.
The goal of an effective healthcare system is to do everything possible to enable people to live long and healthy lives. Sadly, the American system fails to do that and falls behind many other countries. While we devote 18 percent of our gross domestic product to healthcare, we rank 33rd in life expectancy and 34th in infant mortality, and trail in many other health outcomes. A Harvard University study indicated that, incredibly, some 45,000 Americans die needlessly each year because they do not get to a doctor in time.
I start my approach to healthcare from a very basic premise: healthcare is a right, not a privilege. Unfortunately, uniquely among major nations, that statement is not true for the United States, where access to healthcare depends on how much money you have and what your employer is willing to provide.
It is simply unconscionable that the most advanced nation in the world has so many people who lack health insurance. It makes no sense that millions more are one diagnosis or car accident away from financial disaster. And, despite the trillions of dollars we spend on healthcare, the disparity in the quality of care between the rich and everyone else grows wider.
Our system doesn’t make economic sense, and it certainly doesn’t make moral sense. In a civilized, democratic society, every man, woman and child must be able to get the medical care they need regardless of income.
It is incomprehensible that drug companies still get away with charging Americans twice as much — or more — than citizens of Canada or Europe for the exact same drugs manufactured by the exact same companies. It is an outrage that insurers still want to hike premiums by as much as 60 percent a year on individual policyholders.
It boggles the mind that approximately 30 percent of every healthcare dollar spent in the United States goes to administrative costs rather than to delivering care. Taiwan, for example, spends only a little over 6 percent of its GDP on healthcare, while achieving better health outcomes on some key indicators than we do. The reason, of course, is that they spend a fraction of what we do on administrative costs.
If our goal is to provide high-quality healthcare in a cost-effective way, what should we be doing?
Clearly, we must move toward a single-payer system.
The health insurance lobby and other opponents of single-payer care make it sound scary. It’s not. In fact, a large-scale single-payer system already exists in the United States. It’s called Medicare. People enrolled in the system give it high marks. More importantly, it has succeeded in providing near-universal coverage to Americans over the age of 65.
Establishing a single-payer system will mean peace of mind for all Americans. When health insurance is no longer tied to employment, people will not fear losing both their job and their family’s access to healthcare. Millions of Americans won’t have to stay in jobs they don’t like because their family needs healthcare. Entrepreneurs and small businesses will be free to develop their business plans without worrying about the cost and complexity of providing healthcare for themselves and their employees.
For these reasons and more, Rep. Jim McDermott (D-Wash.) and I have introduced the American Health Security Act, which would guarantee healthcare as a human right and provide every U.S. citizen and permanent resident with healthcare coverage and services through a state-administered, single-payer program.
I am very proud that my home state of Vermont is now taking big steps to lead the nation in healthcare by moving forward on a plan to establish a single-payer healthcare system that puts the interests of patients over corporate profits. The American Health Security Act would make sure every state does the same.
The goal of real healthcare reform must be high-quality, universal coverage in a cost-effective way. We must ensure, to as great a degree as possible, that the money we put into health coverage goes to the delivery of healthcare, not to paper-pushing, astronomical profits and lining CEOs’ pockets.
Sanders, I-Vt., is the junior senator from Vermont, serving since 2007. He sits on the Environment and Public Works; the Energy and Natural Resources, the Health, Education, Labor and Pensions; and the Budget; and the Veterans’ Affairs committees, as well as the Joint Economic Committee.
http://thehill.com/special-reports-archive/1549-healthcare-september-2013-/321477-a-single-payer-system-makes-economic-sense#ixzz2ebEei2sQ
PNHP note: see also Sen. Sanders’ op-ed in Sept. 30 edition of The Guardian (U.K.) titled “A single-payer system, like Medicare, is the cure for America’s ailing healthcare.”
Health law's ailments can be cured by single-payer system
All the shortcomings of the healthcare restructuring result from the decision to leave it in the hands of private insurers
By Michael Hiltzik
Los Angeles Times, Sept. 10, 2013
With the Oct. 1 rollout of a major facet of the Affordable Care Act on the horizon, you’ll be hearing a lot about the glitches, loopholes and shortcomings of this most important restructuring of America’s healthcare system in our lifetimes. Here are a couple of things to keep in mind:
First, the vast majority of these issues result from one crucial compromise made in the drafting of the 2010 law, ostensibly to ease its passage through Congress. That was to leave the system in the hands of private health insurance companies.
Second, there’s an obvious way to correct this flaw: The country should progress on to a single-payer system.
The idea that the ACA is a logical precursor to single-payer, in which the government would be the source of all medical reimbursement, has been gaining traction as key thresholds for healthcare reform approach. The biggest milestone is the Oct. 1 launch of open enrollment for the health insurance exchanges that will offer individual insurance starting Jan. 1.
Last month, Senate Majority Leader Harry Reid made that point in a Nevada news broadcast, calling the ACA “a step in the right direction” but adding that the U.S. would have to “work our way past” private insurance-based healthcare. “We’re far from having something that’s going to work forever,” he said.
“There isn’t a popular groundswell yet” for a single-payer plan “because most people haven’t seen the ACA at work in detail yet,” says David Himmelstein, a professor of public health at the City University of New York and co-founder of Physicians for a National Health Program, the leading advocacy group for single-payer healthcare. But he anticipates that discontent will start in October “and accelerate through the winter.”
Among the law’s shortcomings, he says, are the lack of effective provisions to control healthcare costs and insurance premiums. Premium regulation remains in the hands of the states, and many don’t have strong regulatory oversight of health insurance. In California, health insurance premiums are exempt from prior approval by the insurance commissioner, unlike home and auto insurance. (An initiative to remove the exemption will appear on the November 2014 ballot.)
That’s not to say that the ACA won’t make health insurance more affordable and accessible to millions of Americans now excluded from the market. Published exchange premiums in 18 states have generally come in below expectations, and the federal subsidies available to most buyers will make them cheaper still.
In some cases the premiums may be higher than those of plans on the market now. But because of exclusions for preexisting conditions — which will no longer be legal — they’re actually unavailable at any price to people who will have no trouble qualifying for the exchange plans.
The ACA’s critics observe that a plurality of Americans still view the ACA unfavorably (43%, according to an opinion poll released in June by the Kaiser Family Foundation). They rarely acknowledge, however, that nearly 1 in 5 of those critics think the law doesn’t go far enough — that is, further toward single-payer.
In its earliest incarnation, the Affordable Care Act included a prototype government single-payer provision — the “public option,” a government-sponsored plan to compete with commercial insurers in the exchanges. The public option was deleted at the insurance industry’s insistence.
But the U.S. does offer a healthcare program that resembles single-payer. It’s Medicare, the broadly popular health plan that covers all Americans over 65. Medicare’s administrative costs are only about 2%, and its size gives it the clout to extract large discounts from doctors and hospitals. That’s why one oft-proposed version of single-payer is “Medicare for all” — simply expand its coverage beyond the 65-plus.
Canada’s single-payer system is another model. It’s popular and efficient and costs about one-third of America’s system to administer. Don’t believe the myths purveyed about Canada’s healthcare by the U.S. insurance industry’s minions.
As health economist Aaron Carroll has documented, Canadian patients and doctors are satisfied with the program. As for the contention that it “rations” care, he points out that care in the U.S. is rationed by cost: one-third of adult Americans surveyed by the Commonwealth Fund in 2010 said they had put off important treatment because of the cost. In Canada, the figure was 15%.
There’s little question that taking private insurers out of the American healthcare system would save hundreds of billions of dollars a year. Dozens of studies of federal and state single-payer proposals have found that single-payer plans could provide universal coverage — not even the ACA does that — and still save money.
Estimates of the administrative costs of commercial health insurers exceed 10%. That doesn’t include the costs to doctors and hospitals of maintaining billing staffs to deal with insurers and keep all their rules and peculiarities straight, or the time lost to individuals and their employers of navigating this unnecessarily byzantine system.
Add those, and the overall administrative costs embedded in the U.S. healthcare system come to 31% of all spending, according to a 2003 article co-written by Himmelstein for the New England Journal of Medicine. Administrative and clerical workers accounted for nearly 44% of all employees in doctors’ offices, they calculated.
What do Americans receive in return for all this overhead? Practically nothing. The insurance industry says its role is to hold down costs by negotiating for preferential fees from doctors and hospitals and trolling for abuses, but the truth is they’re totally ineffective at cost control.
Just last year I reported on an admission by Aetna and United Healthcare, two of our biggest insurers, that they had been snookered to the tune of $60 million by one chain of small surgical clinics in Northern California. That happened because the insurers didn’t hire enough staff to give the claims from those clinics decent scrutiny — in other words, their administrative costs, high as they were, didn’t buy adequate oversight.
The result, to cite just one example, was that United paid the chain more than $97,000 for a kidney stone operation that it usually covers for $6,851.
“Private insurance is a parasite in the system,” says Arnold S. Relman, the former editor of the New England Journal of Medicine and an advocate of healthcare reform. “It adds nothing of value commensurate with its cost.”
Relman believes that fixing the healthcare system will require more than single-payer. The delivery of care needs to be reorganized by promoting the formation of more “accountable care organizations” — medium- and large-scale group practices with hospital affiliates whose physicians would be salaried to discourage the overuse fostered by the fee-for-service system.
What’s really needed is political will. It would help if big companies, which grouse incessantly about the rising costs of covering their employees, would throw their weight behind a system that would relieve them of that burden.
The forces of opposition won’t lie down; the in
surance industry won’t give up its central role in the healthcare system without a costly and bruising fight, as it showed in Congress and in numerous states, including California, where single-payer plans were on the table.
“It’s going to be a slow and painful process,” Relman says. “But sooner or later we’ll have to turn to single-payer. It’s the only logical solution.”
Michael Hiltzik’s column appears Sundays and Wednesdays. Reach him at mhiltzik@latimes.com.
http://www.latimes.com/business/la-fi-hiltzik-20130911,0,2211922.column
Will the Affordable Care Act obviate the need for employer-sponsored insurance?
Will Employers Drop Health Insurance Coverage Because Of The Affordable Care Act?
By Thomas Buchmueller, Colleen Carey and Helen G. Levy
Health Affairs, September 2013
Abstract
Since the passage of the Affordable Care Act, there has been much speculation about how many employers will stop offering health insurance once the act’s major coverage provisions take effect. Some observers predict little aggregate effect, but others believe that 2014 will mark the beginning of the end for our current system of employer-sponsored insurance. We use theoretical and empirical evidence to address the question, “How will employers’ offerings of health insurance change under health reform?” First, we describe the economic reasons why employers offer insurance. Second, we recap the relevant provisions of health reform and use our economic framework to consider how they may affect employers’ offerings. Third, we review the various predictions that have been made about those offerings under health reform. Finally, we offer some observations on interpreting early data from 2014.
Summing Up And Looking Ahead
For an employer, deciding whether or not to offer health insurance already requires a complex calculus that takes into account a host of factors—including employees’ preferences, wages, taxes, and regulations. The Affordable Care Act throws new taxes, subsidies, requirements, and insurance markets into the mix. But it does not fundamentally change the economics of the firm’s decision. Microsimulation models built on sound economic principles have for the most part predicted relatively small declines in employer-sponsored coverage as a result of health reform, and we believe that these predictions are likely to be correct.
If we are wrong, though, how will we know? Inevitably, reports will come in that some employers are dropping coverage. Although it will be tempting to attribute such reported changes to the Affordable Care Act, it is important to interpret new data on employer-sponsored coverage in the context of the basic economics of firms’ behavior and preexisting trends. The combination of rising health care costs and stagnant earnings for middle-income workers has for decades led to a gradual but steady decline in employer-sponsored insurance. This trend is the appropriate baseline against which to measure the impact of health reform.
It is, perhaps, stating the obvious to add a caution against reading too much into anecdotal reports. But for reasons described above, even surveys with large samples can produce results that are difficult to interpret. Fortunately, there are several high-quality data sources that will be useful for monitoring changes in employer-sponsored insurance and drawing inferences about the effect of health reform.
We expect that the earliest data on rates of coverage will come in September 2014, when both the National Health Interview Survey and the Current Population Survey should report on individuals’ sources of coverage in early 2014. If historical patterns hold, the Kaiser Family Foundation/Health Research and Educational Trust Employer Health Benefits Survey will be published the same month. In September 2015 the American Community Survey will provide state and metropolitan-area estimates of individual-level coverage patterns, and in July 2015 the Medical Expenditure Panel Survey will provide further information on employer offerings.
Of course, effects in early 2014 will not be the last word, as individuals and employers may take a wait-and-see approach. And since the employer penalty for not offering coverage will not take effect until 2015, it may be several years before the true effects of health reform on employer-sponsored insurance become evident.
However, these data will begin to answer the question posed in the title of our article. Given the historical importance of employer-sponsored insurance, the attention that is paid to this question is understandable. However, it is not a question of great economic significance. There is no efficiency argument for preferring private insurance facilitated by employers to private insurance facilitated by the state or any other mechanism that could be used to pool risk and achieve administrative economies of scale.
It is also important to remember that relying on firms as a mechanism for pooling insurance risk generates efficiency costs because it distorts the labor market. A better-functioning individual health insurance market has the potential to improve labor-market efficiency by reducing job lock, and thus eliminating a barrier to entrepreneurship and making it easier for workers to find a job and an insurance plan that matches their preferences. If the shift from employer-sponsored insurance to individual coverage is greater than projected, these labor-market gains may be substantial.
http://content.healthaffairs.org/content/32/9/1522.full
and
Small Increases To Employer Premiums Could Shift Millions Of People To The Exchanges And Add Billions To Federal Outlays
By Daniel R. Austin, Anna Luan, Louise L. Wang and Jay Bhattacharya
Health Affairs, September 2013
Abstract
The Affordable Care Act will expand insurance coverage to more than twenty-five million Americans, partly through subsidized private insurance available from newly created health insurance exchanges for people with incomes of 133–400 percent of the federal poverty level. The act will alter the financial incentive structure for employers and influence their decisions on whether or not to offer their employees coverage. These decisions, in turn, will affect federal outlays and revenues through several mechanisms. We model the sensitivity of federal costs for the insurance exchange coverage provision of the Affordable Care Act using the nationally representative Medical Expenditure Panel Survey data set. We assess revenues and subsidy outlays for premiums and cost sharing for individuals purchasing private insurance through exchanges. Our findings show that changing theoretical premium contribution levels by just $100 could induce 2.25 million individuals to transition to exchanges and increase federal outlays by $6.7 billion. Policy makers and analysts should pay especially careful attention to participation rates as the act’s implementation continues.
http://content.healthaffairs.org/content/32/9/1531.abstract
Comment:
By Don McCanne, M.D.
There has been considerable speculation as to whether or not employers will discontinue their health benefit programs and shift their employees to the state insurance exchanges established by the Affordable Care Act (ACA). What is the likely outcome, and, more importantly, does it even matter?
The majority of studies suggest that the impact of ACA on employers’ decisions regarding the continuation of their employee health benefit programs will be relatively modest initially.
Examples that predict more extreme shifts, such as that above by Austin et al – three Stanford medical students and their faculty advisor – are often based on narrow assumptions. In this case the assumption is that quite modest differences in net costs of plans offered through the exchanges compared with employer-sponsored plans could cause large shifts from employers to the exchanges.That ignores a great many other considerations that enter the employers’ action plans. Another infamous study by Douglas Holtz-Eakin made questionable assumptions that resulted in the spurious claim that employers would drop up to 35 million employees from coverage simply because of the provisions of ACA.
The Health Affairs article by Thomas Buchmueller and his colleagues provides a much more objective, if nuanced, analysis of the probability of a shift from employer-sponsored plans to the exchanges
. Based on several more credible microsimulations and based on employer surveys, they conclude that the more immediate impact of ACA will be quite modest. They suggest resources that we can follow which should provide us with better evidence of developing trends in the employer provision of health benefits.
While much attention is being directed to employer responses, Buchmueller et al state that employer-sponsored insurance “is not a question of great economic significance.” There is “no efficiency argument for preferring private insurance facilitated by employers to private insurance facilitated by the state or any other mechanism that could be used to pool risk and achieve administrative economies of scale.”
Although this study compared employer-sponsored private insurance with private insurance offered by the state exchanges, the subtle comment above on the efficiency argument perhaps should be refined: “…no efficiency argument for preferring… private insurance facilitated by the state or any other mechanism that could be used to pool risk and achieve administrative economies of scale.” There is, in fact, a very strong efficiency argument for the state to use another mechanism to pool all risks and achieve administrative economies of scale; that is, of course, single payer reform – an improved Medicare for all.
Shumlin To Rely On Payroll Tax Hikes
By Peter Hirschfeld
Vermont Public Radio, Sept. 9, 2013
Gov. Peter Shumlin said increases in the payroll tax will “play a major role” in the public financing system he wants to use to fund single-payer health care.
The public discussion over single-payer has taken a back seat of late to the health insurance “exchange” set to come online in the beginning of October. The new online marketplace, a product of the federal Affordable Care Act, will offer consumers a platform from which to comparison shop from a more strictly regulated slate of coverage options.
But even as the state launches a $6 million outreach campaign aimed at building awareness of “Vermont Health Connect,” as the exchange is being called, Shumlin said his administration still has its eyes on the single-payer prize.
“What (the exchange) does is basically subsidize the current system, so that’s OK,” Shumlin said. “But like most things that come out of Congress, it doesn’t really solve the problem.”
In an interview this week on “City Room,” a public-access cable show, Shumlin said he’s still committed to delivering a publicly financed, universal health care system by 2017. And his administration, he said, is readying a financing plan that will rely in large part on the payroll tax.
“And the question is where do you have capacity in the other taxes — income, sales, room and meals, we all know what they are — to be able to integrate some of those taxes with a payroll tax to come up with a more fair system based upon ability to pay,” Shumlin said. “And that’s the challenge for the Legislature. And for us.”
The “challenge” of developing a plan looks to be falling more on Shumlin than on his Democratic colleagues in the Statehouse, who rejected a plan earlier this year to split responsibility for the development of a public-financing proposal between the legislative and executive branches.
The administration is spearheading that task now, with input from lawmakers, and will present a proposal to the Legislature in January 2015.
Shumlin said there’s no question that the payroll tax will figure prominently in the plan, but that his administration will have to figure out how to avoid the kind of economic disruption that would inevitably accompany a sudden increase in the surcharge on wages.
For companies that already provide health insurance to their employees, Shumlin said, the new payroll tax won’t be terribly jarring.
“Right now as an employer I can tell you that I pay something that I call a health care tax … And for businesses … that are already paying a health care premium … it’s not a big shock to tell us we’re going to be paying a payroll tax instead of a health care premium,” Shumlin said. “We don’t care what you call it, we’re already paying it.”
The problem with the payroll tax, according to Shumlin, arises when the new surcharge is assessed on Vermont companies that don’t already provide insurance.
“And the question is how to ratchet in the folks that are paying nothing slowly enough so it doesn’t hurt their bottom line,” Shumlin said.
Ultimately, he said that in the single-payer system, the state needs “to have everybody who’s in business in Vermont paying something.”
Shumlin said the job will be a heavy lift politically. But he said he’s convinced the debate is a winnable one.
“Opponents are going to say this will be the biggest tax increase in Vermont history. Fair enough,” Shumlin said. “But it’s going to be the biggest health care premium reduction in American history. We’re just going to swap a health care premium for a publicly financed health care premium.”
Peter Hirschfield writes for the Times Argus – Rutland Herald.
http://digital.vpr.net/post/shumlin-rely-payroll-tax-hikes
Shumlin plan to use payroll tax to fund single payer unpalatable to many in business
By Andrew Stein
Vtdigger.org, Sept. 9, 2013
If Gov. Peter Shumlin pursues a payroll tax to fund a publicly financed health care system, he will meet heavy resistance from one of the state’s most influential business groups.
Betsy Bishop, director of the Vermont Chamber of Commerce, says her organization and its members would not look favorably on a payroll tax.
“When you take away the decision-making process, but leave the payment still in place, it disconnects the employer from the payment,” she said. “What we’re interested in is continuing a system where employers, if they are paying for health care, have some level of control over what they are paying for.”
Last week, Shumlin told Times Argus Editor Steve Pappas that a payroll tax would be one of the vehicles for funding a single-payer, universal health care system in Vermont. Shumlin has been touting single payer for years, but he has provided little detail to date about how the state would pay for the system.
“Clearly, the payroll tax is going to have to play a major role,” he told Pappas.
Shumlin’s Office of Health Care Reform is working on a financing plan to raise an estimated $1.61 billion for the system, and the governor says he will hand the plan to the Legislature in January 2015. The state would not be eligible for a waiver from the Affordable Care Act to implement a single payer plan until 2017.
“Opponents are going to say this will be the biggest tax increase in Vermont history — fair enough,” Shumlin told Pappas. “But it’s going to be the biggest health care premium reduction in American history. We’re just going to swap a health care premium for a publicly financed health care premium.”
Jim Harrison, who runs the Vermont Grocers’ Association, which represents 700 retailers and 250 suppliers, says he is not surprised the administration is considering a payroll tax.
“It is logical a payroll tax would be under consideration because a lot of insurance premiums are paid for by employers,” he said.
Exactly how a payroll tax would affect businesses, however, depends entirely on how it would be leveraged.
“You could have a number of employers that could be dramatically hurt and others who could be substantially helped by such a system,” Harrison said.
Shumlin said the biggest shock would be felt by businesses that don’t currently contribute to their employees’ insurance.
“The question is: How do you ratchet in the folks that are paying nothing slowly enough so that it doesn’t hurt their bottom line?” he said to Pappas.
“We pay about 18 percent of payroll for health care premiums,” Shumlin said about his family business, Putney Student Travel. “You can call it a tax or a premium, but it’s coming out of our bottom line.”
This isn’t the first time a payroll tax has been proposed as the main funding mechanism for a single-payer system. Harvard economist William Hsiao recommended an 11 percent payroll tax on employers and a 4.5 percent payroll tax on employees in 2011. At the time, many employers balked at the idea.
Vermont Businesses for Social Responsibility supports a publicly financed health care system, and the organization’s team has been looking at various funding options for the past couple of years.
Dan Barlow, a lobbyist for the group, says, “There really aren’t that many buckets of money.”
“Taxing junk food is not going to pay for our health care system,” Barlow said. “The payroll system is one of those big buckets you can go to. The income tax is as well.”
David Coates, who chairs the 20-member Governor’s Business Advisory Council, says he prefers the payroll tax to an increase in income taxes.
“It’s one of the funding mechanisms that has to be on the table from my perspective,” he said. “It certainly beats the income tax. You have to look at whether something will be so onerous it will make us anti-competitive and drive people out of the state of Vermont. There are people saying that our income taxes are too high.”
Michael Costa, Shumlin’s health care financing czar, says every option is on the table.
“I think it’s really fair to say that the current system relies heavily on payroll contributions, and we certainly continue to take a hard look at this option,” Costa said. “I wouldn’t be shocked to see the payroll tax as a component of one or more of the plans.”
A plan, however, has not yet been developed, he said.
“A secret plan would make my life easier, and I’m really certain one does not exist,” Costa said. “Why? Because I asked during my job interview. It would make my life a lot easier.”
Shumlin also articulated this sentiment, in his interview with Pappas.
“If we could lift up the veil on this thing, and we had it all planned out, and we could tell you exactly how it was going to work, I wouldn’t be sitting here,” he said. “We would have done it already.”
Rep. Janet Ancel, who chairs the House Ways and Means Committee, said that she is unsure whether her committee will look at tax options this legislative session for single payer. Sen. Tim Ashe, who chairs the Senate Finance Committee, says his committee won’t vote on a financing plan before 2015.
Bishop of the Vermont Chamber said legislators ought to know what the system looks like before they vote on a financing plan for single payer.
“Before we can define what tax this comes from and how much money we can raise from a tax, I think the state needs to be very clear about what the definition of single payer is, and what the benefit package is, and who is eligible for it, and how much we are paying providers,” she said. “If you change any single one of those factors, the overall cost of the system changes.”