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Vermont First State to Pass Single-Payer Health Care System

In 2011, the Vermont state government enacted a law functionally establishing the first state-level single-payer health care system in the United States. Green Mountain Care, established by the passage of H.202, creates a system in the state where Vermonters receive universal health care coverage as well as technological improvements to the existing system.

Recent Legislative History

Vermont StateIn 2010, the Vermont State Legislature passed a bill (S 88) enabling a commission to study how to create a health care delivery system.  Dr. William Hsiao, a Harvard University professor of economics, helped design three possible options to reform Vermont's health care. He had also been an advisor during Taiwan's transition to single-payer health care. 

The three options laid out:

    Option 1: Create "a government-administered and publicly financed single-payer health benefit system decoupled from employment which prohibits insurance coverage for the health services provided by this system and allows for private insurance coverage only of supplemental health services." 

    Option 2: Create "a public health benefit option administered by state government, which allows individuals to choose between the public option and private insurance coverage and allows for fair and robust competition among public and private plans."

    Option 3: Create a unique design for Vermont health care answering the questions:  What type of health insurance, what methods of financing, type of single payer under VT's unique circumstances?  Meet the objectives of Section 2 of Act 128.
Vermont regards itself as "a small state with communitarian values."  It already had an existing network of non-profit hospitals and a medical structure that supported state intervention.  The commission viewed the state of Vermont as "uniquely poised to pass universal health reform." 
    As a result, Option 3 was selected with the commission completing its health care design by 2011.  It was introduced legislatively on 2/8/11 and signed into law by Governor Peter Shumlin on 5/26/11 (H. 202).   the bill does not fit the strict definition of single payer as private insurers can continue to operate in the state indefinitely.  It is still considered the first single-payer bill to be passed on the state level.  

Green Mountain Care

H. 202 led to the creation of Green Mountain Care with goals of near-universal coverage and a reduction in health care spending.  Ironically, it is the Federal Government's HCA (PPACA or Patient Protection and Affordable Care Act) which is causing some of Vermont's implementation problems. 

  • Full implementation of Green Mountain Care could be delayed as late as 2017 because of PPACA provisions including the health care exchange
  • Vermont must gain federal approval to use federal health finances to fund the state program.
  • The Vermont state law requires Vermont to accomplish the following prior to full implementation
  • Define the benefits in the program
  • Provide a three year budget that costs less than current health care expenditures
  • Acquire the federal waiver

 There is also still debate, for example, on how to fund the program. One proposal was an 11% payroll tax on employers.  According to Dr. Hsiao,  "a two-thirds majority of Vermonters supported access to health care they need when they need it, regardless of their ability to pay even if this means that they would have to pay higher taxes and higher insurance premiums themselves."
Vermont single payer may be giving up some (much) of their potential administrative savings by allowing private insurers to operate in the state.  David Himmelstein, the founder of Physicians for a National Health Program, a single-payer advocacy group, raised this criticism.

Note:  Most of this content is a simplification of the Wikipedia article "Vermont Health Care Reform." For original text, http://en.wikipedia.org/wiki/Vermont_health_care_reform.

Posted: February 9, 2014    Nancy J Conrad

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