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Seizing the Moment: Vermont, Single Payer, and the Next Step in Reform

This month brought heartening news for everyone that was disappointed that no public option appeared in the final version of the Affordable Care Act (ACA):  Vermont is poised to enact single payer legislation in a bid to provide low cost health insurance for all its citizens in one, streamlined system. 

Last year the Vermont state Senate commissioned Harvard economist, Dr. William Hsiao, to prepare a study examining different single payer policies for the state, and he gave a report on January 19th, outlining his vision.  The main architect of Taiwan’s national health insurance system and a former Chief Actuary of Medicare and Medicaid, Dr. Hsiao is now advocating a publically funded, privately administered, single payer system in which health insurance companies bid for the right to administer the fund every two years.  This innovative approach has promise on multiple levels.  First, it would unquestionably be the most universal health insurance system in the country - everybody in, nobody out.  And it honors that moral imperative without bringing in the specter of a “government takeover” that critics of reform often proclaim would mean the end of patient/physician autonomy and innovation.  With private companies bidding every two years to administer tax payer funds, you get competitive cost controls and an incentive for innovation that has been sorely lacking in the status quo where the insurance industry sets its own rules and prices company by company, hospital by hospital.   But perhaps its greatest promise is that it actually stands a snowball’s chance in New England of passing.   Newly elected Vermont Governor, Peter Shumlin, and the Democratic State Legislature are strongly in favor of some kind of single payer system, and  (I advise being seated  for this next part) Vermont’s biggest private insurers are generally on board as well.

 William Hsiao

Dr. William Hsiao arrives to deliver a draft report on health care reform at the Statehouse in Montpelier on Wednesday, January 19, 2011.

Now consider this innovative step by Vermont against the backdrop of what is going on in other states.  Arizona is moving to drop 28,000 Medicaid patients (read mostly pregnant women and kids from poor families), Texas Governor Rick Perry is musing about pulling his state out of Medicaid altogether, while dozens of other states are challenging the ACA in court, resisting the mandate that all their citizens be covered.   If these states on the other side of the reform debate have their way and get to try out some more conservative version of health insurance then we will have a great competition among these various and disparate policies.

One of the strengths of the ACA is that it’s actually set up to permit this kind of experiment, allowing states to request waivers from its mandates in favor of other state-wide systems that promise to cover at least as many people as ACA policies would.  The start date from which these waivers could be requested is currently 2017, however a bipartisan senate bill (S.3958) by Senators Ron Wyden (D-OR) and Scott Brown (R-MA) would advance that date to 2014, coinciding with the full rollout of most of the rest of ACA provisions.  This glimmer of cross-party cooperation is good news for Vermont and everyone else who is eager to prove that a single payer system would have been the best way to achieve the moral prerogative of universal coverage while doing right by employers and patients – bringing down costs.  

Indeed, Vermont should serve as a clarion call for President Obama’s supporters who were disappointed in the final product of health insurance reform.  Physicians for a National Health Plan (PNHP), for instance, is one of the liberal reform organizations who are lending their support to Vermont’s efforts.  Among other lobbying actions, PNHP will be sending bus-loads of medical students, residents, and attendings to Montpelier in March to demonstrate in favor of this project. 

And those still shouting “repeal and replace” need to realize that they are wasting everyone’s time – at least on the first half of that slogan. Ultimately the basic framework of the ACA will stand, but the waiver system will create a stage where other ideas can audition, be judged, and then spread across the country if they’re better than the ACA. So, this is an opportunity for those who felt like reform did not go far enough to address the injustice and waste in the health insurance system.  Disenchanted liberals and reformers pay attention!   If you want to really fight for your moral and fiscal values in health care then look north and cheer on Governor Shumlin and the Vermont Legislature.  


Share Your Comments


  1. Lisa Plymate

    I understand Dr. Hsiao had 3 different suggestions for models of health care delivery systems in Vermont. Could you elucidate the other two?
    Also, I'm perplexed by how changing the private insurance company to manage all of Vermont's health care every two years will be efficient. It takes tremendous energy and capital to manage such a system. Isn't this just a ploy to keep private insurers happy? I don't really even see why they would want to do this. They'd have to rev up, then drop employees for the two year cycle. Surely there are better ways to address finding employment for insurance personnel who would lose their jobs. I would think a stable public financing system would make more sense. Is this one of Hsiao's proposals?
    Thanks for reporting on this, and please keep us posted! Vermont leads the way!

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