Vermont: What went wrong, and what can we learn?

Vermont: What went wrong, and what can we learn?

Gerald Friedman, PhD, CommonHealth, Spring 2015

Vermont was an inspiration. Advocates of universal access to health care were thrilled with the enactment in 2011 of Act 48 calling for the establishment in 2017 of a state-funded-and-managed program, Green Mountain Care, to provide all Vermonters with health insurance. With strong legislative and popular support, and the support of a governor elected on the basis of his commitment to universal access to health care as a human right, Vermont was to be a model for state single payer. It was to be for our movement what Saskatchewan was for Canada: the state where we broke through and showed that single payer was feasible.

Instead, Vermont was a disaster. Governor Shumlin’s decision to withdraw his support from Green Mountain Care not only doomed the program but his assertion that he acted because the program would be too expensive condemned any efforts to establish state-funded-and-managed programs. Every single-payer advocate now has to explain not only why single payer is better than the current fragmented private insurance system, but why single payer is feasible elsewhere after a liberal governor who had campaigned for single payer concluded after three years of study that it is not economically feasible even in blue-state Vermont.

Of course, it would have been better had Vermont Governor Shumlin been more candid. The Board appointed by Governor Shumlin recommended taxes that were politically challenging for a minority governor just narrowly reelected. But the Green Mountain Care Board report did not conclude that the program would be economically unfeasible or too expensive for Vermont. The ultimate economic bottom line is whether better health care can be provided at a lower cost to the community, and by these criteria Green Mountain Care would be a success. Agreeing with earlier studies, the Governor’s Board concluded that universal coverage could be established in Vermont with 94% of health care costs covered by the state program while spending less than under the current system with savings increasing in the future. With 90% of Vermonters paying less than under the current system, one might well have used the Green Mountain Care Board report to advocate for state single payer.

The problem was not economics but politics. And, for us, the lessons from Vermont are about our political methods rather than our economic analysis. It may be safe to say that we have won the economic argument. Every study has found that universal systems are more efficient. The administrative waste, monopoly profits and distorted incentives of the current system make fragmented systems of private health insurance an economic albatross around the neck of our economy.
The problem is political, to muster the political will to replace the current system with a new one, and the established financing system with a new set of premiums and taxes. Here was Shumlin’s failure. Perhaps he thought that by avoiding the economic discussion and the issue of financing, he could build overwhelming support for Green Mountain Care. Instead, he left the economic discussion to the program’s opponents, and by not engaging he missed an opportunity to educate the public about the true costs of the current system to put into perspective the payroll and other fees required for Green Mountain Care.

From Vermont we learn that it is not enough to be right about the economics and the morality of single payer. To win, we need to explain relentlessly to our neighbors why we are right. We need to answer the hard questions about costs and benefits, the dollars and cents as well as the justice and decency of health care.