Although attention in the healthcare sector has largely been focused on the technical hazards of the Obamacare rollout, a radical experiment in Vermont is bringing a new story to the national dialogue. In May 2011, Vermont became the first state in the country to ratify a single-payer plan, Green Mountain Healthcare. It is the first system of its kind in the United States. After recent coverage in the Atlantic as well as an Op-Ed by Michael Moore denouncing Obamacare as “awful” while praising Vermont’s experiment as a positive deviation that could “change everything”, all eyes are on Vermont.
What Is A Single-Payer System?
A single payer system is traditionally defined as a health care system in which the government replaces private-insurers as the sole provider of health care costs. In Vermont’s case, private insurers are still allowed to operate in the state, but Green Mountain Healthcare stops employer-provided insurance and makes the government the dominant health care provider.
Designed by Harvard economist William Hsiao, the program, is meant to guarantee universal coverage (including dental and vision care), increase Medicaid reimbursement and streamline the system so that those who are underinsured receive proper coverage.
Hsiao predicts a 25.3% decrease in healthcare spending for Vermont (approximately $4.6 billion in the first five years), predominantly from payment reform and integration of delivery systems. These savings could then be used to reinvest in covering the uninsured and upping benefits.
Long-Term Economic Implications
Many are wary about Vermont’s revolutionary plan, especially when it comes to how much the program will cost. Governor Shumlin has declared his full support of Green Mountain and is working with tax experts to decide how to raise revenues. Yet opponents of the plan cite studies that claim Vermont would need $1.6 billion in new revenues just to get the plan’s rollout on time in 2017. Vermont residents worry that this will be the biggest tax hike that they have seen in decades. Also, experts cite Vermont’s political uniformity and small population as factors that make it a good place for experimental legislation, but are skeptical that anything similar could be carried out in other states, let alone implemented nationwide.
The Nation magazine named Vermont’s Green Mountain program as the “Most Valuable State Initiative” in its 2013 Progressive Honor Roll. Whether Vermont’s program flounders or succeeds: it keeps the health care conversation rolling with new ideas.