Cost, Tax Concerns Prompt Vermont To Hold Off On Single-Payer Health Plan

Dec 18, 2014

Vermont Governor Peter Shumlin, at an event in 2012.
Credit Delaywaves via Creative Commons

Vermont's big experiment in creating a single-payer health care system is over, at least for now.

On Wednesday Governor Peter Shumlin announced he would effectively kill the plan to create a publicly-financed insurance system that was to be known as Green Mountain Health Care. "In my judgment," Shumlin said, "now is not the right time to ask our legislature to take the step of passing the financial plan for Green Mountain Health Care."

NHPR's Health and Science Reporter Jack Rodolico told All Things Considered about what the decision might mean for Vermont, for New Hampshire and for health care as a whole.

The announcement was a big shock in Vermont, even though there were some signs that trouble was brewing.

About a year ago the Shumlin Administration was supposed to come out with the financing plan, to say what types of new taxes were going to be created to pay for this plan. And a year later, the plan still had not been made public. In the past year, while people were waiting for this plan, a lot of doubt had crept into the political discussion, the discussion among businesses; in the last few months a lot of hospitals and businesses had really started to back away from this program and express a lot of skepticism and doubt.

And a few weeks ago, Vermont Digger, which is an online news outlet, leaked numbers about what this financing plan was going to look like. The governor was going to come out with this plan at the end of the year, but some of the numbers got out early, and it started to crumble from the outside in, it seemed like.

What was the problem here - politics or policy?

It seemed to be a little of both, to be fair. On the policy end, the numbers were just off. The governor gave a Powerpoint presentation during a press conference, and what he did was he really went through all the numbers his administration had crunched. And you saw that this thing was very financially untenable and was going to cost a tremendous amount of money. They had some of the numbers off from the get-go because the administration was expecting more funding from the federal government through the Affordable Care Act, to the tune of hundreds of millions of dollars - that just never came. And one of the big numbers that came out in the last few weeks that really scared a lot of businesses was that there was going to be an 11.5% payroll tax on businesses. That really scared a lot of people.

On the political end, this year, while we were waiting for this plan to come out there wasn't a lot of great communication, and that really cost him during the recent election - Governor Shumlin nearly lost to a Republican challenger in a highly Democratic state. I think that was a bit of a wake up call for a lot of people in Vermont.

This was the first state to really try to create - or at least look at the feasibility of - a single payer system. A lot of eyes were on that discussion.

We'll see what happens next in Vermont. Shumlin and advocates of single-payer systems say it's not the death of the program - it's certainly the death of the program right now. There's a bill in the New Hampshire legislature to create a single-payer system here, which is dead on arrival in the coming year.

But the thing that really impacts New Hampshire and the rest of the country is the fact that one of the things that killed this program is the skyrocketing cost of health care, period. Health care all over the country. And over time, when you looked at the numbers, this program was not going to be fundable because health care costs are just going up, and up, and up. And that's happening here in New Hampshire too.