The Pragmatist

As Vermont addresses its $150 billion projected budget shortfall for the 2011 fiscal year, it will likely make the biggest cuts to human services, a sector that represents nearly 40 percent of the state budget. Toward this end, Vermont has plans for serious health care reform. Governor Peter Shumlin recently unveiled his propositions to reform Vermont’s current health care system; he wants to transition to a single payer system, possibly by 2014.

The governor’s plan emphasizes implementing a “real” single payer system, a publicly financed structure into which all Vermonters pay, so it is not attached to employment. The proposal will first create the health care exchanges mandated by the federal reform. The exchanges are intended to streamline paperwork and availability of information regarding insurance policies in the state. From there the plan would be to transition into a single payer exchange, which would negotiate insurance premiums. Having a single payer system spreads health care costs, which lowers premiums and prevents insurance companies from denying care.

The eventual transition to a single payer system would allow tighter control of health care costs, and would provide coverage for all Vermonters. Supporters of the proposal also argue that high health care costs are prohibitive to businesses operating in the state, and that controlling these costs is essential to encourage business growth and job creation. The projected savings for the first year, however, are at $500 million. While not an insignificant amount, it represents a small dent in Vermont’s overall budget shortfall.

Vermont’s reform plans come at the same time as state courts around the country are hearing cases about the federal health care reform passed in the fall. Cases have been brought against the federal reform in 26 states, but Vermont is not one of them. These cases argue that requiring individuals to purchase health care insurance is unconstitutional, although a single payer system would save individuals, businesses, the state and the federal governments money. A single payer system would be more efficient and less expensive, while providing care to the more than 50 million Americans without health insurance. Caring for the uninsured contributes significantly to rising health care costs, costs state governments (and Washington) can no longer sustain. But the single payer system does raise the specter of socialized medicine.

The governor’s proposal also includes the creation of a Vermont Health Reform Board, which has some legislators worried. The board would develop a state health care budget, assess hospital funds and help set insurance rates. Its five members would be appointed by the governor, as is currently done with Vermont Fish and Wildlife and other state boards. Several state senators have expressed concern that this board would be too powerful, but the legislature would retain the ability to make final decisions, while the board would help to determine best practices and conduct oversight.

The Shumlin administration would like to see the legislature pass this bill during the spring session, but lawmakers are unsure. I urge the legislature to put this issue near the top of its agenda, and to engage in a discussion over the concrete benefits and drawbacks of the plan. The prospect of health care coverage for all Vermonters and health care savings is too great to wait for next year’s session.