Some Economists Really Want Vermont to Enact Single-Payer Public Healthcare

March 4th 2015

Alicia Lutes

There's a war going down in Vermont and no, it had nothing to do with Ben and Jerry's or teddy bears or maple syrup (we wouldn't want to alarm you like that), but rather the push for a single-payer, state-funded public healthcare system. And 100 economists just wrote a letter in support of it.

On Thursday of last week, Vermont's Healthcare Is a Human Right campaign got a seriously credentialed line of support from the National Economic & Social Rights Initiative (NESRI), a nonprofit organization that works to empower those who will most benefit from progressive actions in the hope of convincing the people of the state that — despite what the governor thinks (more on that later) — single-payer healthcare is not only affordable, but viable. 

"As economists, we understand that universal, publicly financed health care is not only economically feasible but highly preferable to a fragmented market-based insurance system," the letter reads. "Health care is not a service that follows standard market rules; it should be provided as a public good. Evidence from around the world demonstrates that publicly financed health care systems result in improved health outcomes, lower costs and greater equity."

The goal of the letter — along with a new, joint report from the Vermont Workers' Center and NESRI — shows the possibility of universal healthcare in the state isn't impossible, but rather a hugely beneficial option that can be implemented, quite affordably, by 2017. All of this is an attempt to rescue a plan that was initially supported by — but ultimately and surprisingly abandoned — by the state's Governor Peter Shumlin. Upon announcing the abandonment stated, per Vermont news site Seven Days, that "now is not the time" and the plan "was just not affordable" as the state's budgets currently stand. And he wasn't happy about it, calling the failure "the greatest disappointment of my political life, so far."

You see, Shumlin has been a huge, huge proponent of a single-player healthcare system. He campaigned on it in 2010 when he won the governor's mansion. And his battle to implement it has been a long one, dating all the way back to 2011's passing of the law that paved the way for it. But the funding has been an obstacle for Shumlin. His office reported the estimated cost of single-payer healthcare for Vermont taxpayers as $2.6 billion. To cover this expense, the governor said that the state would need increases in personal income taxes of up to 9.5 percent and am additional 11.5 percent payroll tax on business.

But the Vermont Workers' Center and NESRI tend to disagree with Shumlin, stating in the letter that "public financing is not a matter of raising new money, but of distributing existing payments more equitably and efficiently. Especially when combined with provider payment reforms, public financing can lower administrative costs, share health care costs much more equitably, and ensure access to comprehensive care for all." Though, the study was "concern[ed] with the lack of transparency in the Administration’s processing of primary data, which makes it difficult to discern how existing state funds are accounted for" — never a good sign.

"The assumptions and data points behind [Shumlin's] projections and trends are unclear," the report states, adding that "it is unclear what specific savings have been accounted for" when coming up with the taxpayer burden. Interestingly, the NESRI plan also includes hearing, dental, and vision coverage — something the governor's plan did not. The key difference in the plans? The conversion of the state's current public healthcare asset, Blue Cross Blue Shield Vermont into a precursor for the new Green Mountain Care Board, taking "the roughly $132 million in surplus it currently maintains" in order "to fund the transition to and administration of GMC, were the non-profit company dissolved and the GMCB transformed into a public corporation."

Notably, countries with a single-payer system (like Australia, Canada, Norway, Switzerland) are — according to the Better Life Index — among the top-ranked, happiest countries on the list. According to Bloomberg, they're also some of the healthiest, too. Americans, though, are divided on the question of the government's role in health care. While they appreciate the importance of getting everyone access to healthcare, there is disagreement about how to actually do it.