Affordable Care Act / America / Healthcare / Social Insurance Programs

How Vermont’s Single Payer Proposal Can Backfire

American health care reform is a three-headed beast. Attempts at reform typically seek to resolve issues regarding access, quality care, and cost control. The ACA, one of the largest overhauls of American healthcare is aimed at improving access—but the problem becomes what good is increasing access to expensive and low quality care? Vermont’s leaders have decided to take drastic measures to address this problem. Governor Peter Shumlin signed a single-payer proposal, Green Mountain Healthcare into law in May 2011. Shumlin believes this is the single solution to issues with access, quality, and cost. Right now, Vermont’s legislators are working to raise sufficient funds by either voting to raise or levy new taxes or reapportion the existing state budget. But first Vermont must get federal approval to use its federal subsidies in this new way.

The fact that Vermont is considering taking health reform even further than the ACA is not surprising. In some ways Vermont is similar to European social democracies with single payer systems. For example, Vermonters are small in number and largely homogeneous. This makes conditions more favorable for the single payer system. Like other states, little was being done to reign in Vermont’s increasing health care costs. Vermont aims to reduce its administrative costs and streamline health care delivery by switching to the single payer system by 2017.

Vermont’s intentions are good— all states have a duty to protect their citizens. However, the single payer system may not be the best way to do so. In fact, this switch may create more problems than it solves. Many view Vermont’s plan as a move even further in the wrong direction than the ACA. Critics argue millions of jobs will be lost when Vermont cuts out the “middle-men” insurance brokers and replaces them with (even worse) the government. This reignites the discussion over whether or not the government should be involved in the health insurance market at all. There are thousands of insurance companies and their lobby is very powerful. It will fight hard to maintain the current market approach in Vermont. If implemented the single payer system would also significantly reduce choice in the market. Although technically speaking all doctors would be in network the best doctors would be inaccessible due to long waits. Additionally, some Vermonters are geographically isolated from the best medical care—a single payer system would not solve this problem.

Vermont’s legislators should be applauded for their boldness. In theory, the single payer has the ability to improve welfare—but also has the potential to be a disaster. Vermont is taking an unnecessary risk by pursuing this plan. Even if successful, Vermont’s populace and politics are so unique that a successful implementation would in no way indicate viability elsewhere in the U.S. This is an interesting idea but the chances for success are slim. As Vermont pursues this plan further it is likely many Vermonters will protest the significantly higher tax incidence they would have to bear in order to make the plan work. While it is unreasonable to expect the government to stay completely out of the insurance market, it is also unreasonable for the government to be the sole proprietor when it comes to selling insurance. Vermonters know their health needs best. Many enjoy their current policies. Vermonters should maintain the freedom to choose the best policy for them.

At the end of the day, state sovereignty should be respected. Although, if Vermonters really want to pursue this plan in spite of the aforementioned risks it may be better to take a more gradual approach or institute a waitandsee attitude contingent on the success or failure of the ACA. Perhaps its leaders would even consider expanding its Medicare and Medicaid programs? Doing so would allow Vermonters to switch jobs and move between income brackets without losing coverage. There are many other ways to reduce costs and streamline efficiency without having to resort to instituting a single payer system. The American health care system can and should be improved but the single payer system is not the way best way to do so.

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