Tags: Vermont | single-payer | Gruber

Report: Vermont's Health Plan Disaster Blamed on Gruber

Image: Report: Vermont's Health Plan Disaster Blamed on Gruber
(Kevin Dietsch/UPI/Landov)

Monday, 22 Dec 2014 10:54 AM

Vermont’s proposed single-payer healthcare insurance system fell apart because the financial projections from disgraced Obamacare architect Jonathan Gruber were way off base, Vox reports, citing the state’s health reform executive.

Democrat Vermont Gov. Peter Shumlin, who has championed publicly funded health insurance since he assumed office in 2011, abandoned the plan last week, saying that the timing was wrong.

After passing legislation in 2011 to study a statewide single-payer system — an idea popular with liberal critics of the Affordable Care Act — state officials found it would cost nearly as much as the state receives in annual revenues.

The single-payer system is a program in which the government, either state or federal, rather than private insurers, pays for all healthcare costs with income it derives from tax revenues.

The system may contract healthcare services from private organizations, as in Canada, or may own and employ healthcare resources and personnel, as is the case in the United Kingdom.

"Think of it as a bulk discount: when the government can promise to deliver loads of patients to a given hospital or doctor, they have leverage to insist on a lower price," wrote Vox’s Sarah Kliff.

Vermont’s ambitious project, modeled on a combination of the British and Canadian systems and dubbed Green Mountain Care, ran into trouble when the "scenarios" put forward by Gruber, an MIT economist, failed to work, Vermont’s director of health reform, Robin Lunge, told Vox.

The state tried running numbers with the single-payer system covering between 80 percent to 94 percent of the average Vermonters’ healthcare costs.

But the system that Vermont hoped to create would have cost around $2.5 billion in its first year, a figure that might possibly be acceptable in large states like California, according to Vox, while noting that Vermont only takes in a total of $2.7 billion in taxes a year to pay for all the programs that it runs.

It was estimated that Vermont would need to find around an additional $1.6 billion in tax revenues to pay for Green Mountain Care. In fact, a state-appointed panel, the Green Mountain Care Board, calculated that financing single-payer would require a new 11.5 percent income tax on all state residents, Vox reported.

"It was disappointing to me and my team that we weren’t able to make the numbers work the way that we had hoped," said Lung, while explaining that figures under Gruber’s various scenarios showed in each case that a single-payer system would be more cost-effective than "initially expected."

"We started to realize this might be too big an obstacle to surmount," added Lunge, who then went to Shumlin to inform him that the state would not be able to build a single-payer system.

When the governor announced Wednesday that the system had been put on hold, it was not revealed when Vermont would resume the effort, if ever.

Last month, the state fired Gruber and canceled the remainder of his six-figure contract after his infamous videotaped remarks attacking Obamacare became public.

Shumlin spokesman Lawrence Miller condemned Gruber for saying that President Barack Obama's signature health law was written to conceal its tax increases and that its passage relied on the "stupidity of the American voter."

Miller said Gruber's comments were "offensive, inappropriate and do not reflect the thinking of this administration or how we do things in Vermont. As we have also said, we need solid economic modeling in order to move forward with healthcare reform."

When Shumlin ran for governor in 2010, he surprised voters by pushing a single-payer platform at a time when most Democrats across the country were avoiding healthcare reform in their election campaigns, Vox reported.

"It was the first person I ever heard in politics who was a serious candidate, said the words ‘single payer,’ and weren’t using them in an attack ad," said Deb Richter, who is the president of Vermont for Single Payer. "It was amazing."

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Vermont’s proposed single-payer healthcare insurance system fell apart because the financial projections from disgraced Obamacare architect Jonathan Gruber were way off base, Vox reports, citing the state’s health reform executive.
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Monday, 22 Dec 2014 10:54 AM
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