• An update on Vermont’s single payer system

    We’ve covered Vermont’s efforts to achieve its own style of health care reform. As a reminder, Vermont is the state where candidates for governor tried to show that their opponents were less in support of single-payer than they were. The most recent issue of NEJM has an update.

    Governor Shumlin signed Green Mountain care into law about two years ago. Since then, the government has made efforts to engage residents and stakeholders through active engagements, town hall-like events, and advisory groups. They created an independent board with oversight over the entire health care system, including “jurisdiction over payment reform, insurance exchanges, rate setting, hospital-budget authorization, resource and workforce allocation, state formulary establishment, regulation of insurance carriers, and maintenance of a statewide quality-assurance program.” They’ve been working hard on their exchange, which they believe could function as the needed infrastructure for a single-payer system.

    Most importantly, though, they’ve been working hard on figuring out how to finance their ideal system:

    Vermont will also gain substantial federal funding through its Medicaid expansion ($249 million) and attract federal financing through a 2017 innovation waiver ($267 million). While many states continue to debate expansion, Vermont has expanded its Medicaid program well beyond the ACA’s proposed income-eligibility threshold of 138% of the federal poverty level. With the expansion, Vermont will save 10.9% in state Medicaid funding. States that now have high eligibility levels will see decreases in spending, whereas those with low eligibility levels will have to increase their spending. Overall, experts predict that the national impact of Medicaid expansion will be a net increase of 0.3% in states’ total Medicaid expenditures but an overall decrease of 0.4% in spending, thanks to a 0.7% decrease in uncompensated care. Even though some states will see an eventual increase in spending on Medicaid if they expand their programs, they will still generate net savings in health care spending.

    Revenues from taxes (payroll, personal income, sales, cigarettes, tobacco, insurance, and more) will also finance GMC, but administrators believe that the eventual cost savings from the single-payer system will be greater than what will initially be needed from tax revenues. In 2017, claims costs are projected to be $87 million higher than they would have been without health care reform because additional health care services will be provided, but administrative costs will be $122 million lower, which will result in net savings of $35 million in the first year.

    As everyone else continues to argue about whether expanding Medicaid will cost states too much, Vermont is going above and beyond what others are doing. Should they save what they expect to,  other states may follow. It would be ironic if, after denying that Obamacare would lead to single payer for so long, it actually wound up proving that single payer can work beyond the Medicare population.

    @aaronecarroll

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    • The cited NEJM article says there are only two carriers in Vermont. Assuming (I’m just guessing) that one is Blue Cross, are we to believe that Vermont will take over both disease management and claims processing functions from that plan, and that its employees will be laid off? What happens to the concept of network providers–will Vermont let every doctor in the State be a Blue Cross preferred provider and who decides? What happens when employers choose an ERISA plan rather than the Green Mountain Plan? What happens to the Vermont model when two or more multi-state plans enter the State’s market in January of 2014? Or does Vermont plan to find a way to exclude those choices? I’m not asking for a detailed response, but there seems to me to be an aura of wishful thinking surrounding this scheme, or else an iron fist hiding under a velvet glove.

    • The greed in the healthcare industry has kicked into over-drive during the past three years. One would have expected quite the opposite in the face of healthcare reform. Rational businesses interested in preserving their industries would have tamped down on the greed in order to present an improved image to the public. “See, we’re not really greedy pigs. No need for Obamacare, folks.”

      But no, these guys have gone into hyper-drive with the price increases, thereby, speeding up the day the public demands a single payer system in every state.

      Maybe they know their days are numbered?

    • What the NEJM article–actually, the woman quoted in the article–was saying was that there are now 65 small group health plans in the state. Whittling that down to two carriers on the state exchange will simplify matters greatly. And the state exchange is intended to be a sort of foundation for single payer *after* that. The actual single-payer system is some years off yet.

      My question is how this all works for people who have insurance coverage through employers that–like mine–are located outside Vermont. Quite a few people here work remotely.

    • I don’t get why things are so complicated in the US.
      Why don’t you just have like a incremental tax system, with well off folk and corporations paying bit more, and make health care free at the point of service for everyone?
      It would save the state loads of money because so many folk who can’t afford health care and end up on welfare or dying, with family members having to take time off work to look after them sometimes, would be able to stay healthy and work to pay taxes.
      Odd!

      • “I don’t get why things are so complicated in the US.”

        Rich, crooked rentiers have a very large influence on our politics. They used “communism!” as their excuse for decades, but have been switching to different excuses as that stops working.

        It would be nice to live in a country where rich, crooked rentiers weren’t running things. Sigh…

    • Everyone knows it can work. It works well for those of us on Medicare. Prior to Medicare, 40 years I used single-payer in the military. When I retired, we paid the ONE government contractor who operates Tricare, one quarterly check which was set by Congress. I’ve never had to deal with private companies except for auto insurance….which some in Canada don’t have to deal with. Bottom line: when you see what people are paying for private health insurance premiums, we could easily have everyone paying that to the Medicare fund. The Medicare eligibility age could be lowered in five-year brackets each year. In 10 years, everyone would be covered. Finally, the FUTURE doctors in America, the American Medical Student Association, has endorsed single payer. The director told me they supported Obama’s AFA at the Supreme Court as a good first step, but ultimately, we must get to single payer.