6 Reasons Why Vermont’s Single-Payer Health Plan Was Doomed From The Start

Last week, Vermont Governor Peter Shumlin (D.) announced that he was pulling the plug on his four-year quest to impose single-payer, government-run health care on the residents of his state. “In my judgment,” said Shumlin at a press conference, “the potential economic disruption and risks would be too great to small businesses, working families, and the state’s economy.” The key reasons for Shumlin’s reversal are important to understand. They explain why the dream of single-payer health care in the U.S. is dead for the foreseeable future—but also why Obamacare will be difficult to repeal.

via 6 Reasons Why Vermont’s Single-Payer Health Plan Was Doomed From The Start.

2 Responses to 6 Reasons Why Vermont’s Single-Payer Health Plan Was Doomed From The Start

  1. Bob Hertz says:

    Thanks for starting this blog, glad that I found it.

    One main barrier to single payer programs is the enormous shift in who pays most for health insurance. This is especially true if the single payer plan has to include big increases in the federal income tax.
    Today, the vast majority of families with incomes over $100,000 get health insurance from an employer. They may pay some of the premium, although about 15% still get health insurance with no obligation on their part at all.

    (I know the argument that the employer portion really comes from them in the long run. But that certainly has not held down their wages.)

    Anyways, the Vermont single payer plan would hit that family with a 9.5% income tax. At an income of $200,000, the tax hit would be $19,000. There is no way that most employers would ‘gross up’ their salaries to make up $19,000.

    Not all these families would be Republicans, either.

    Obamacare has some of the same transition problem– i.e., that moving health insurance into the tax system will make a lot of families worse off. Millions of Americans pay next to nothing for health care:

    – the 15% who still get free insurance
    – the spouses who get coverage from a family plan, and can then go to work at firm that need not insure them
    -the owner of the firm that does not need to insure his employees, because they get family coverage elsewhere
    -the uninsured, and the firms which employ them.

    A single payer plan cannot allow this degree of “free riding.” The taxes for single payer must be universal.

    This might be OK in the long run. Obamacare got away with some of this because only about 2 million persons in the individual market
    (and maybe less than that) were affected by community rating.

    But a single payer plan for the whole US would have over 30-40 million who would be wildly against it.

  2. Bob Hertz says:

    I wonder why my comment is still awaiting moderation. thanks

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