Why Vermont Failed to Enact Single Payer?

OPINION -- Drawing unwanted national attention to his tiny state, Governor Peter Shumlin pronounced Vermont’s quest for universal health care Dead On Arrival. This statement broke the hearts of activists who previously cheered passage by the 2011 Vermont legislature of Act 48, the first step toward America’s first statewide universal care plan.

But this collapse was no ordinary failure. It was not a failure of universal care, or of single payer, or even of Gov. Shumlin himself. This was a spectacular failure of a very different nature, and one with valuable lessons for Oregon. But we must learn the right lessons, not the wrong ones.

The Wall Street Journal called this a failure of universal care to reduce costs. Not true. Not only was the universal plan never implemented, all predictions in Vermont’s universal care study, prepared at the request of the legislature by Dr. William Hsiao, remain valid. Regardless of costs, universal care in Vermont would still provide better care to more people for less money. Dr. Hsiao’s conclusions are corroborated by more than two dozen other studies in 14 states that come to the same conclusion.

Megan McArdle of Bloomberg View called this a single payer failure. But this was not a single payer failure because Vermont did not enact single payer. Vermont made a valiant effort to provide universal health despite many federal laws, including Medicare, ERISA, and the Affordable Care Act, that make single payer impossible in any state. Instead, Vermont created a work-around in which Green Mountain Care, the proposed state health care program, would have included less than 60% of its population; Vermont’s proposal included multiple payers, not just the state single payer.

James Haslam, executive director of the Vermont Workers' Center and a respected leader in Vermont’s campaign for universal care, labeled this as Gov. Shumlin’s failure. But as tempting as it is to blame the messenger, this failure was not Gov. Shumlin’s. Governors do not enact legislation; legislatures enact legislation. Vermont’s 2011 legislature dared to establish a universal care plan, but it left enactment of the taxes to fund that care to the 2012 legislature. The 2012 legislature left the task to the 2013 legislature. The 2013 legislature left the task to the 2014 legislature. When the 2014 legislature left the task for the 2015 legislature, Gov. Shumlin did not need a Hebrew prophet to read the writing on that wall. He simply stated the obvious: No Vermont legislature in the foreseeable future would take that responsibility. He pronounced the death; he did not kill the patient.

The collapse of the Vermont plan was a legislative failure, clear and simple.

For the record, Gov. Shumlin and the majority of legislators were Democrats.

No matter how expensive health care becomes, private insurance costs more than single payer. In every population – the poor, the sick, the elderly, employees of large businesses who self-fund, our veterans – single payer costs less.

But Vermont legislators did not believe they could vote for replacing insurance premiums with single payer taxes and still get re-elected. Neither did Gov. Shumlin.

Gov. Shumlin attributed the death of Vermont’s universal care plan to runaway healthcare costs and the increased taxes needed to pay those costs. Both are true: Vermont’s healthcare costs are rising (like every other state) and higher taxes would be necessary to match them. But universal care does not generate higher healthcare costs. It converts what we currently pay privately (i.e., employer premiums, family premiums, deductibles, co-pays, out of network payments, and excluded medication costs) into taxes. Premiums, out of pocket payments, taxes – it’s all our money, just different labels.

And while the efficiency of single payer reduces total healthcare costs (not dramatically – most studies, including Dr. Hsiao’s, suggest a modest 5-10% reduction), the primary advantage of single payer is guaranteed access to healthcare that costs less, that removes fear of bankruptcy, and that does not depend upon employers.

What is Vermont’s lesson for Oregon?

Our legislators need our unequivocal support before they will make bold decisions: not just to enact universal healthcare (like Vermont), but to create the tax plan to fund it (unlike Vermont).

Legislators will not respond to our need for universal healthcare unless we tell them. Legislators will not vote for new taxes to fund universal healthcare unless they know they have our vote if they do. Enabling our legislators to avoid the debacle of Vermont requires us to take our message directly to their offices: We want universal care. We want them to make it happen. And we will vote for them if they do.

We must give our legislators courage (and our votes) to do the right thing. That’s Vermont’s lesson for Oregon.

Samuel Metz, MD, is a private practice anesthesiologist in Portland. He has collaborated with Oregon State Sen. Michael Dembrow on passing the HB 3260 study of financing options for universal health care in Oregon. Dr. Metz can be reached at [email protected]. More information about the HB 3260 can be found at www.OregonStudy.org.