Rutland Herald Editorial: Gov. Peter Shumlin upended Vermont politics Wednesday when he announced he would abandon his plan to introduce single-payer health care in the coming year. He crushed the hopes of supporters and touched off a jubilant round of I-told-you-sos among opponents. The upshot is that, for now, establishment of a publicly financed, universal health care system for the state will not happen.
Shumlin always promised that if the numbers didn’t add up, he would not pursue his single-payer plans. It turns out the numbers did not add up. Introducing an 11.5 percent payroll tax for all businesses in the state would have been unsupportable, in the governor’s view. Add to that an income tax of up to 9.5 percent, and the economic burden appeared to be extreme.
The single-payer plan was always predicated on a trade-off: higher taxes taking the place of health care premiums. But a number of financial factors conspired to make those taxes too high. Health care costs continue to rise too rapidly. Money from the federal government is falling short. Underfunding of Medicaid is catching up with the state, adding to future tax burdens. Slow overall economic expansion has slowed the growth of tax revenue.
The studies that served as a premise for Shumlin’s plan all emphasized the savings that would accrue from the efficiencies achieved by a single-payer plan, but it turns out those savings would be too slow to arrive to enable the new system to get off the ground. Republicans are saying Shumlin should have known from the start that it would never work.
Some advocates of single payer are feeling that Shumlin led them down the primrose path through three elections, and now he has let them down. In fact, the governor always warned that everything would depend on the numbers, and the numbers are now in. Skeptics suspect the numbers were already looking bad before the last election but he held back until it was over. Shumlin says the final numbers became clear only last week.
Whatever the timeline, it is a huge disappointment for Shumlin and for Democrats who have chosen to explore the possibilities of single payer along with the governor. One of the most articulate and effective single-payer advocates, Dr. Deb Richter, was disappointed but said trying to create a universal, public system in one fell swoop might have been overly ambitious. She was not eager to blame Shumlin. All single-payer advocates had embarked on an uncertain quest. It all depended on the numbers.
Republicans who feel vindicated by Shumlin’s abandonment of single payer are accusing him of wasting millions of dollars pursuing a project they knew from the start wouldn’t work. It’s hard to argue the point, except to note that the effort to achieve public health care is a noble cause; it works in virtually all advanced nations; and new economic circumstances have created unforeseen difficulties.
Critics will note that it was never going to work for a single state to set up its own system, given the state’s entanglement with federal systems and cross-border complications. Those who supported Shumlin’s efforts counter that it was worth finding out if the negative view was correct.
Now Shumlin hopes to shift his focus to improving the state’s cost containment efforts, which have enjoyed positive results, and improvements to Vermont Health Connect, the online health care exchange. There is much work to be done to make health care more affordable and to make sure that all Vermonters have access. Too many Vermonters are relegated to policies on the exchange that cost too much and bring with them high deductibles.
For now the medical and business establishment is breathing a sigh of relief that it will not be forced to grapple with an unaffordable new program. But disappointment is warranted, not so much for Shumlin’s decision, which now seems inescapable, but for the hard facts that brought it about.