The single-payer struggle shifts to Vermont

January 31, 2011

Tristin Adie reports on the discussion about how to reform health care in Vermont.

JANUARY WAS a heady month for health care activists in Vermont.

On January 17, the same day that Republicans in the U.S. House of Representatives voted to repeal Barack Obama's federal health care reform law, Dr. William Hsiao, a Harvard University economics professor and architect of Taiwan's single-payer health care system, delivered a report to the Vermont legislature urging proposals for a dramatic overhaul of the system.

Two days before that, Vermont's congressional delegation held a press conference with newly elected Gov. Peter Shumlin to announce that they would fight for federal waivers to allow Vermont to move forward on enacting a single-payer system sooner than the new federal health care law currently allows.

For anyone outraged by the exclusion of pro-single payer voices from the national health care debate that led up to Obama's compromised law in 2009, the bold front-page headlines in the state's newspapers the day after Hsiao addressed lawmakers were exhilarating: "Legislature hears report on single-payer health care system" and "Legislature's consultant recommends single-payer plan for Vermont."

Advocates for single-payer health care rally at Vermont's state house in early January
Advocates for single-payer health care rally at Vermont's state house in early January (Jobs with Justice)

Shumlin went on Democracy Now! two days later to announce that "what we want to do here in Vermont is to create a single pool...ensure that health care is a right and not a privilege."

Many questions remain about the extent of the proposals, but within a few days, the health care reform idea that dared not speak its name was seemingly on everyone's lips in Vermont, and a sense of optimism began to permeate the frigid air.

HSIAO'S RECOMMENDATIONS are the culmination of months of investigation and analysis by a 20-member team of researchers, which included analysts from the Harvard School of Public Health, as well as Jonathon Gruber of MIT, an architect of Massachusetts' 2006 health care reform law. The researchers were appointed by the Vermont legislature last summer to design three systems that could deliver affordable, quality health care to all Vermonters.

Legislators sanctioned the research effort in response to countless rallies, hearings, town meetings, forums and petition drives organized by thousands of activists throughout the state over the last three years. These activists have made it clear that previous state-level efforts at reform--such as the Catamount health plan that subsidizes insurance for low-income Vermonters--have been woefully inadequate in delivering accessible care.

The three systems proposed by Hsiao's team are as follows:

Option 1: Described in the report as "pure single payer," this would grant health care coverage to all Vermonters, with the state legislature collecting a payroll tax on workers and businesses, and setting reimbursement rates for health care providers. Recipients would pay relatively small co-pays for doctor visits and emergency room care, but the high deductibles that have become the norm for so many people would be done away with.

Option 2: A "public option" along the lines of what Obama floated in his original proposal for federal health care reform in 2009. Uninsured Vermonters would have the option to purchase state-run health care coverage. The current "multiple payer" system of private insurance companies would remain untouched.

Option 3: A "private/public" single-payer system similar to Option 1 insofar as all Vermonters would have health care coverage. However, the proposal allows for an existing private insurance company to administer benefits and make payments to providers. This company would win the right to run a "single-payer" system through competitive bidding every two years, and it would operate under the direction of an independent advisory board. Hsiao has said that he most favors this proposal.

Many activists in the state have been encouraged by the report's recommendations, while also raising a number of concerns and questions. Dr. Deb Richter, a longtime advocate for single-payer in Vermont, called it "a major step in the right direction," but stressed that "the devil is in the details." James Haslam, of the Healthcare is a Human Right campaign, told Single Payer Action, "We've come a long way. It's amazing how far we have come to create the political will to do something. Now our struggle is what that something is going to be."

Leaders of Physicians for a National Health Plan (PNHP) called attention to the fact that Options 1 and 3 would leave Medicare and Medicaid intact in the state, so that only 43 percent of Vermonters would actually be eligible for coverage. Dr. Steffie Woolhandler of PNHP urged activists to call these options "by their rightful name--'oligo-payer' plans." Several doctors in the state argue that preserving Medicare and Medicaid would undercut the administrative savings that would flow from a real single-payer plan, since doctors would still have to devote resources to chasing payments from different sources.

Hsiao explained to Single Payer Action that his team made the decision not to include Medicaid patients in their proposals because "most of the Medicaid eligibles have better benefits than what we are proposing," and would thus likely be opposed to reform. In addition, Vermont would need to obtain waivers and additional funding from Congress to fold Medicare and Medicaid beneficiaries into a truly single-payer plan.

Thousands of undocumented immigrants who work in the state would be shut out of the plan--Hsiao's team proposed that only U.S. citizens and documented immigrants who live in Vermont should be covered. Activists also worry that the payroll tax proposed in the report would be far more regressive than an income tax.

However, Hsiao's recommendations have opened up a statewide discussion on how to achieve single payer in Vermont.

Vermonters have been invited to submit comments to the legislature and governor for a two-week period, during which time Shumlin is expected to propose a preliminary single-payer bill. Activists have been busy analyzing the report and debating how best to respond.

What is clear to all is that building a noisy, confident movement is what has gotten us to this point--and further activism and a clear focus on achieving a true single-payer system are the only way to win the kind of health care we need, both in Vermont and nationally.

Further Reading

From the archives