Why single payer died in Vermont

December 20, 2014

Vermont was supposed to be the beacon for a single-payer health care system in America. But now its plans are in ruins, and its onetime champion Gov. Peter Shumlin may have set back the cause.

Advocates of a “Medicare for all� approach were largely sidelined during the national Obamacare debate. The health law left a private insurance system in place and didn't even include a weaker “public option� government plan to run alongside more traditional commercial ones.

So single-payer advocates looked instead to make a breakthrough in the states. Bills have been introduced from Hawaii to New York; former Medicare chief Don Berwick made it a key plank of his unsuccessful primary race for Massachusetts governor.

Vermont under Shumlin became the most visible trailblazer. Until Wednesday, when the governor admitted what critics had said all along: He couldn't pay for it.

“It is not the right time for Vermont� to pass a single-payer system, Shumlin acknowledged in a public statement ending his signature initiative. He concluded the 11.5 percent payroll assessments on businesses and sliding premiums up to 9.5 percent of individuals' income “might hurt our economy.�

Vermont's outcome is a “small speed bump,� said New York Assembly member Richard Gottfried, who's been pushing single-payer bills for more than 20 years. But opponents says it's the end of the road.

“If cobalt blue Vermont couldn't find a way to make single-payer happen, then it's very unlikely that any other state will,� said Jack Mozloom, spokesman for the National Federation of Independent Business.

“There will never be a good time for a massive tax increase on employers and consumers in Vermont, so they should abandon that silly idea now and get serious,� Mozloom added.

The sense of betrayal from single-payers' most passionate advocates after Shumlin's announcement was palpable, particularly as he had tied his own political persona to the idea. “It is time to put the interests of patients first, ahead of political expedience,� said Andrew Coates, president of Physicians for a National Health Care Program. Single-payer is “the only reform that will cover everyone, save lives and save money. Mr. Shumlin, of all our nation's governors, knows this well.�

Vermont's public failure is especially frustrating to single-payer advocates because, they note, the Shumlin framework, which had gotten approval of the state legislature minus that key financing element, wasn't really a true single-payer plan. Notably, large businesses that operate in multiple states would have been exempt. And it was unclear whether or how enrollees in federal plans like Medicare and TRICARE could be integrated into the state's plan.

Those exemptions cut into the funding base while adding administrative complexity, eliminating one of the potential cost-saving elements of single-payer: simplicity.

“There are some practical problems in the idea of state-based policy,� Coates said, acknowledging the huge federal role in financing and regulating health care.

There are also the political obstacles, which are “on steroids,� said Andrew McGuire, a leading activist in California, another traditional center of single-payer activism. Insurance companies, which would be essentially put out of business, are fiercely opposed, and Americans inherently distrust government-run anything — a sentiment not improved by the ACA rollout last year.

McGuire, president of California OneCare, said he wasn't surprised that Vermont backed away. “There ultimately has to be so much pressure that it's like a volcano goes off and it happens, and that pressure has to be deep and wide in the voting public,� he said.

States' pockets also need to be deep and wide. Oregon considered adding a public option — not the same as single-payer, but with similar challenges — to its Obamacare exchange in 2010, but ultimately decided the startup costs were too high, even if savings were forecast down the road.

“People have to ultimately understand that it's going to cost them less even though their taxes go up,� McGuire said. To help convey that message, New York's Gottfried has been holding a series of five townhall meetings statewide, which also feature testimony from people disappointed by the high deductibles and narrow networks in Obamacare plans.

He didn't think Vermont's struggles had much bearing on the Empire State effort. “New York is a dramatically larger state with a much wealthier economy,� he said.

Gottfried's own approach wouldn't exempt multistate businesses, but that invites more political opposition. Gottfried hopes his bill will pass the Democrat-controlled Assembly next year with the help of growing union support. But Republicans control the Senate, so there's little possibility of full passage before 2017.

Single-payer advocates in Hawaii have seen halting progress: The legislature created a board to put together a universal health care plan in 2009, even overriding Republican Gov. Linda Lingle's veto. But she refused to appoint anyone, and Obamacare implementation ultimately took precedence in Democratic Gov. Neil Abercrombie's administration. Gov. David Ige was a key supporter of the universal coverage plan in 2009, but whether he'll pick up the cause again is unclear.

Bills have also been introduced in Illinois, Washington, Massachusetts, Ohio, Oregon and Pennsylvania, according to PNHP.

In California, activists are trying to add members to a relatively young AllCare Alliance, which would push for a federal waiver to create a single-payer system. And apparently taking a cue from environmentalists and Tom Steyer, “we're looking for some very, very, very deep pockets� to fund grass-roots education, McGuire said. But ultimately, he doesn't expect any concrete developments for another five or 10 years.

Gottfried has been introducing his New York single-payer bill every year since 1992. The cause is “not for the faint of heart,� he said.