Universal health care funding to be based on ‘ability to pay’

May 17, 2014

Vermont Business Magazine

By: Timothy McQuiston

Citing as examples of what Vermont has done for renewable energy and the local food movement, Governor Peter Shumlin pushed for universal health care in a speech made at the closing of the Vermont Businesses for Social Responsibility annual meeting. The 24th annual VBSR meeting was held Wednesday at UVM’s Davis Center in Burlington.

The governor, while urging VBSR members "to call your legislator" to get him to craft the necessary laws next year, also hinted at how he proposes to pay for it, which has been a major point of contention in and outside the halls of the State House all year.

“When we all pay based on our ability to pay, I guarantee you, that combined with an affordable, quality system that delivers better outcomes for less money, then we all win.”

While that suggests the governor’s plan, expected by the time the Legislature reconvenes next January, will be income sensitive, as opposed to the premium system used now, in which everyone pays the same amount for the same service, it is a long way from a fleshed-out plan on who will pay and how (eg, payroll deduction like Social Security or an income tax plan or gross receipts tax on businesses or some mix of all those and more).

Much of Shumlin’s 13-minute, extemporaneous speech was given in praise of VBSR and the successes Vermont has had in renewable energy, in raising the minimum wage (on schedule to be the highest in the US by 2018) and in the farm-to-table food movement.

Along with universal health care, VBSR members saved their loudest applause for when the governor mentioned the GMO labeling bill, which he signed into law last week. He also mentioned Vermont’s low unemployment rate (which dropped another tenth Friday to 3.3 percent).

“The only state beating us right now is North Dakota. And they’re doing so at their own peril and own risk, because they’re drilling for a lot of oil and gas,” Shumlin said. “Because of climate change, we need to get off our addiction to oil.”

He mentioned the 2,200 new jobs in the farm and food sector that have been added since he became governor in 2011.

“We have more solar jobs in Vermont than any other state in the nation. Number one,” Shumlin said, pointing out that the state had quadrupled the number of solar panels put up in the state since he became governor. “That’s because of you, not because of me.”

The net metering program expanded this year, he added.

But the emphasis of the governor’s speech was health care and laying the ground work for a universal health care funding system next legislative session.

“We can be the state that passes the first sensible, affordable, universal, single-payer, publicly financed health care system in America where health care for the first time in American history, in this little state, will be there for you because you are a resident of the state of Vermont, not because of how wealthy you are or because of your ability to pay.”

He said some of the sluggishness in the economy is directly attributable to the health care system because it is eating up disposable income. Shumlin said 20 cents of every dollar earned is now spent on health care. At the current rate of increase, costs will double in 10 years.

“The system right now is not sustainable.”

Shumlin said the health care industry should be reimbursed based on quality of care, not on the quantity of work done. Early intervention, exercise, “getting off the smokes” are all part of a health care system based on preventive, not catastrophic, care.

The United States’ international competitors have much lower costs and better outcomes with their universal health care plans, he said.

“Let’s be the first to get this right,” Shumlin said. “This is our time.”