Wednesday, December 17, 2014

Vermont gives up on single payer

Recently I noted that before the end of the year, Vermont's Governor Shumlin would lay out his proposal on how to pay for single payer health insurance. Today brought an unexpected announcement.
Vermont has long had a two-pronged approach to building a single-payer health care system. First, they would figure out what they would want the system to look like. Then, they would figure out how to pay for it.

The state passed legislation outlining how the single-payer system would work in 2011. And ever since, the state has been trying to figure out how to pay for a system that covers everybody. Most estimates suggest that the single payer system would cost $2 billion each year. For a state that only collects $2.7 billion in revenue, that is a large sum of money.

What Shumlin appears to be saying today is that the "time is not right" to move forward on the financing of the single-payer system. And that means putting the whole effort aside, with no clear moment when the debate would be reopened.
This has always been the HUGE hurdle that any single payer system would have to jump. Its true that - in the end - such a system would likely save money. But simply comparing costs in the U.S. to countries with single payer systems is not adequate. First of all, it has been proven that health care procedures are WAY more expensive here than they are in other countries. That's part of where the discrepancy comes from. Single payer wouldn't fix that.

Secondly, switching to single payer means that costs are shifted - not that they simply go away. Vermont found that, when implemented in 2017, those costs would equal an 11.5% income tax on all residents. Trying to design a system of who pays for what inevitably would create big winners and big losers. That means a lot of chaos and an awful lot of noise from the losers.

So...single payer advocates are going to have to address how that transition should happen. Vermont just showed that if you don't do that, it is never going to happen.



    can't wait to hear from bernie about this lolfail

    1. Its almost gotten to where I question progressives when they offer me a magic wand. Imagine that?! LOL

    2. I totally support single payer...with the proviso that I have NO idea how it would be funded or what it would cost. Single payer supporters in my state had to be told BY ME that PBO had approved, with Bernie, the creation of this system as their state model to begin last year. Bernie never said anything very publicly about it, buried the OK in a remote part of his web site. My state folks decided when they grudgingly admitted PBO was NOT the enemy of single payer that since VT was doing the economic evaluations, we did not have to. Except we're much larger than VT. They never once did the 'pencil out' needed and every meeting proved they weren't even in agreement with each other. So now VT has shown that their single payer is vastly more expensive than ACA - ACA is paid for by individuals and families on a sliding scale linked to your income, not market or universal rates. It can't be covered by a 'Medicare' tax either since it covers you for life, not just after 65. That's roughly 40 years of savings in a work life that can't be accrued. So single payer folks - you did not do the work until now and have proven in VT that single payer is NOT a savings for people. I'm sad about that, but with ACA being MUCH less expensive than single payer and covering what single payer purports to cover, I'm also not mourning its loss. I was a devoted follower - until reality showed that it was not feasible in the Canadian form. There ARE other ways - regulated private insurance is Germany, Belgium, the Netherlands - and ACA is helping us get there. So no more whining single payer folks. This one is on YOU.

    3. A lot relies on what features they wanted. Was it like Obamacare bronze plan? High deductibles? Co-pays for most things?

      I mean if your health plan consists of band-aids and amoxicillin for everybody, that would be no problem.
      Universal health care isn't all that expensive, it becomes of question of what is covered.

      Dropping some questionable expenditures such as chemotherapy for people 80 and up would save money and cost very few lives that weren't going to be lost anyway. Chemo is pretty deadly too, after all.
      Of course, then the "death panels" meme arises. Often given voice by the people making massive money through insurance company middleman profits.

      Vermont's key problem is an inability to deficit spend when it is not a monetarily sovereign body. It cannot print its own money for shortfalls. Single payer for a non-sovereign entity without limits on what is covered is extremely challenging.

  2. Another piece of transition I don't hear people talking about is how to transition all those people working in that huge American insurance industry to new jobs.

    Also people seem not too know how much Medicare costs the retiree. Part A, hospital insurance is free. But part B is about $100 a month. Then to get insurance pretty close to what I had while working I have private retirees policy partly paid by my former company that cost another $180 a month from me. I know this is just one example, from one state. And I don't know how retirees whose income was so low they were on Medicaid fair on Medicare. Also I can see from my statements that Medicare reimburses the providers less than my former insurance does.
    We really need to fight for the defense of the ACA. I am sure I am not the only grandparent relieved to have her grandchild that are covered one way or another by the ACA. We need to let our Democratic representatives know that they need to protect the ACA.