Oliver Fein, MD
On Jan. 19, Harvard health care economist William Hsiao presented testimony to the Vermont legislature stating that Vermont could provide every resident with health insurance and still save money by consolidating its multi-payer private health insurance industry into a single-payer health care system. Hsiao, who had been hired by the state legislature to come up with three possible designs for a new health care system, said his team had calculated a single-payer system would save $2.1 billion in health spending by 2025.
Details of his three options were to be released on Feb. 17. At this writing, the general characteristics of each option are known: Option #1 would be a state government-run single payer program; Option #2 would create a health insurance exchange with a public option; Option #3 would create an independent board with representatives from employers, patients, providers and government agencies to oversee a single payer program. Hsiao believes the third option is most feasible because it is likely to be accepted by a broad cross-section of Vermonters.
Dr. Deb Richter, a family physician in Cambridge, Vermont, and past president of Physicians for a National Health Program (PNHP) commented: “Dr. Hsiao has performed an extraordinary service. I encourage everyone to familiarize themselves with his team’s report and to participate in the public discussion of it.”
Since then, Gov. Peter Shumlin has introduced a bill in the Vermont legislature that spells out how the state could move to a single-payer plan in three stages over four years. The first stage would start this year. Vermont would do the planning needed to establish a health insurance exchange as called for under the federal health care reform law.
The second stage would begin in 2014 when the health insurance exchange would begin operations. The exchange would include employer groups with fewer than 100 employees, and state and municipal employees.
The third and final stage would be implemented when the federal government granted Vermont waivers to include Medicaid, Medicare and worker’s compensation into a single, publicly financed exchange. At that point, all Vermonters would receive coverage by virtue of their residency for a comprehensive package of health care benefits, which would be funded by taxes. Coverage would not be linked to employment, and most Vermonters would pay into an equitable system for financing this coverage. The bill doesn’t spell out the exact financing system – payroll, income, corporate taxes, and taxes on unearned income, or a combination of all of these – but calls for continued research. The private health insurance industry would be limited to offering supplemental coverage that does not duplicate the public coverage.
Dr. Richter declared: “We have the potential of setting an example for the entire nation about how to bring justice and equity to health care, one based on the principle of everybody in, nobody out. We can make history.”
Oliver Fein can be reached at ofein@med.cornell.edu.