Last Call For Vermont's Single Payer Plan

Looks like Vermont won't be implementing single payer healthcare anytime soon, as Dem Gov. Peter Shumlin, who barely survived re-election in November, is quietly dropping the attempt as unworkable.

Vermont Gov. Peter Shumlin on Wednesday dropped his plan to enact a single-payer health care system in his state — a plan that had won praise from liberals but never really got much past the framework stage. 

“This is not the right time” for enacting single payer, Shumlin said in a statement, citing the big tax increases that would be required to pay for it.

Shumlin faced deep skepticism that lawmakers could agree on a way to pay for his ambitious goal and that the feds would agree to everything he needed to create the first state-based single-payer system in 2017. 

And that was all before Shumlin, a Democrat, almost lost reelection last month in one of the country’s most liberal states. And it was before MIT economist Jonathan Gruber, the now notorious Obamacare consultant who also advised Vermont until his $400,000 contract was killed amid the controversy, became political poison.

Gruber nonsense aside, the real problem was the money.

Shumlin had missed two earlier financing deadlines but finally released his proposal. But he immediately cast it as “detrimental to Vermonters.” The model called for businesses to take on a double-digit payroll tax, while individuals would face up to a 9.5 percent premium assessment. Big businesses, in particular, didn’t want to pay for Shumlin’s plan while maintaining their own employee health plans. 

“These are simply not tax rates that I can responsibly support or urge the Legislature to pass,” the governor said. “In my judgment, the potential economic disruption and risks would be too great to small businesses, working families and the state’s economy.” 

And that was for a plan that would not be truly single payer. Large companies with self-insured plans regulated by ERISA would have been exempt. And Medicare also would have operated separately, unless the state got a waiver, which was a long shot. 

Shumlin added that federal funds available for the transition were $150 million less than expected.

So, big business payroll tax hikes, a 9.5% tax on individual plans, and large businesses wanted exemptions, and that's all before Medicare and the fact the federal bucks weren't there.  The plan was a non-starter, and I don't know why our side made single-payer such a huge deal, when it would have meant serious tax hikes on people and businesses and the rich would have walked away with "exemptions" anyway.

As much as I'd like to see single payer, it has to be everybody at once.  One state doing it without federal support (and let's face it, a GOP Congress will kill any federal money for this because they're perfectly fine letting poor blue state voters die) isn't going to work.