HSIAO REPORT: Masterful and Practical for Vermont

By Ellen Oxfeld

Jan. 25, 2011

The health care system reform design of the Hsiao, Kappel, Gruber team is masterful.  Both Option 1 and Option 3 are single payer plans that will create an historic first for the United States. They will establish a sustainable system of health care that includes everyone and that will prevent both individuals and the system as a whole from plunging into financial ruin due to uncontrolled health care expenses.

These plans will ensure that all Vermonters will have access to health care and none will go broke due to health care expenses.  Although constrained by federal laws, the plans find ways around most of these constraints and create a common risk pool and a state agency that acts as the single payer for health care expenses.  This single payer pool is publicly financed.  Hsiao and his team have conservatively estimated that either plan will save Vermont over $500 million in its first year of implementation (2015) when compared to simply implementing the federal bill.  Greater savings will be realized in each subsequent year.

Although Governor Shumlin has wisely put off the issue of the specific way to raise revenues, the team suggests an employer and employee payroll tax in lieu of current private insurance premiums.  This will retain tax exemptions for business contributions to health care, and is progressive in that those who earn more will pay more.  Those whose income and earnings are below a certain level will be exempt.

Finally, both plans raise reimbursement rates to providers that were below acceptable levels (such as Medicaid) and create a more sustainable reimbursement system.

Of course, as we dig into the details, there will inevitably be some questions about specific elements of these plans, such as the best and fairest way to raise revenues or some of the specific elements of the benefit packages.  But the broad outlines will create an historic breakthrough for this state and for our country.   Our representatives should craft legislation around the single payer designs of Professor Hsiao’s team.   Either will work well for the people of this state – employers, employees, health care providers and patients.  Professor Hsiao and his team have shown us a way to establish health care as a common good rather than a market commodity and to create a health care system that is sustainably financed.

5 Responses to “HSIAO REPORT: Masterful and Practical for Vermont”

  1. Eric says:

    Although Medicaid and Medicare will apparently still be operative for funding, will everyone in the state nonetheless have the same “card”? In other words, will a Medicaid or Medicare funded citizen appear to health care providers the same as any other citizen in the plan? Will we see the end of discrimination by providers according to insurance plan?

  2. terry says:

    We don’t know about a single “card” for everyone. Maybe at some future point. But far more important is this: The reformed system will end discrimination. The discrimination that exists now is based in the fact that – as you no doubt know – Medicare, Medicaid, various private insurances reimburse at different rates. The Hsiao designs call for uniform reimbursement rates from all payers.

  3. Walter Heath says:

    As an activist in the single-payer movement in California, my hope is that those who criticize Dr. Hsiao’s report as falling short of our aspirations for a single-payer plan put aside their concerns and use their organizational talents to actively support any proposed legislation which closely conforms to Options 1 or 3. Dr. Hsiao’s group met two critical expectations set forth in the request for proposal. The input of stakeholders was carefully considered and the researchers’ proposals address their concerns and deliver templates for reform that are politically feasible to enact.
    Like it or not, we have embarked on a journey through which individual states are going to enact and implement distinct models of reform until the political will of Congress sufficiently evolves to enact HR676. Single-payer activists impatiently await that day, but we should recognize that Dr. Hsiao’s charge was to design a system that has a chance of passing the Vermont legislature, not Congress. I urge the members of PNHP and other single-payer organizations who might be considering inactive support (or no support) of the efforts of the people of Vermont to also consider the actual track record of the states as incubators of change with respect to human rights in our country’s history.

  4. Citizen K says:

    Anyone who would criticize Dr Hsiao’s proposal wears multiple blinders. If enacted, this would have the political significance of Medicare and the Affordable Care Act. The proposal merits the unqualified support of liberals and progressives around the country.

  5. How long do you think everyone has before the government messes with medicare?

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