Shumlin’s commitment to single payer health care questioned

May 21, 2013

VTDIgger

Posted By Andrew Stein On May 21, 2013

When Gov. Peter Shumlin signed Act 48 into law in 2011, he set Vermont on a path toward a single payer health care system.

Two years later, lawmakers on both sides of the political aisle are questioning his sincerity. And a strategy to draw up a financing plan for a single payer system is nowhere in sight.

Act 48 required Shumlin’s Secretary of Administration Jeb Spaulding to submit a recommendation for the “amounts and necessary mechanisms to finance Green Mountain Care,” the publicly funded plan, by Jan. 15, 2013.

On Jan. 24, the so-called financing plan [2]arrived on legislators’ desks. While it provided an amount to be raised of roughly $1.6 billion, the document did not include the “necessary mechanisms” to raise those dollars.

Republicans criticized the administration, arguing that it failed to comply with state statute. The administration argued that Congress would not allow for a waiver to deviate from the Affordable Care Act until 2017. Only then could the state implement a single payer system, and officials said they didn’t want to make hasty decisions. With the extra time cushion, the administration urged lawmakers to focus on implementing Vermont Health Connect, which will become the sole health insurance marketplace for an estimated 118,000 Vermonters in 2014.

In February, the administration called on lawmakers to create a nine-member committee to decide how taxpayers should finance a single payer system.

The General Assembly did not heed the call.

“The committee language didn’t make it into a bill in the end game,” said Robin Lunge, Shumlin’s director of Health Care Reform. “That means we actually haven’t made a plan for how we’ll proceed.”

While there was strong support for Shumlin’s proposal in the House, it never gained traction in the Senate. As negotiations between the two bodies accelerated into the final hours of the session last Tuesday, House Speaker Shap Smith said that there were other matters that took precedent.

“I hope that it doesn’t end up being a mistake,” Smith said.

Sen. Claire Ayer, D-Addison, chairs the Senate Health and Welfare Committee. She said she was the only member of her committee who was in favor of the proposal.

“When it was pitched to the leadership of the Senate, the response was muted at best,” she added.

Sen. Jane Kitchel, D-Caledonia, said her Senate Appropriations Committee was cool to the idea because Shumlin wanted $50,000 for more analysis, and the state had already paid out $300,000 to the University of Massachusetts for the first “plan,” which also included analysis for the insurance exchange.

Sen. Anthony Pollina, P-Washington, is a strong supporter of single payer, but he was not keen on Shumlin’s proposal.

“I thought it was a strategic move on his part to shift the responsibility onto legislators when it is in fact the administration’s responsibility to come up with a financing plan,” Pollina said. “It would have given the administration the ability to reject the plan and blame it on legislators for not coming up with a good financing plan.”

The committee would have been comprised of two members from each legislative body as well as two officials from the administration, and the governor and legislative leadership would have chosen the remaining three members.

Questioning the governor’s motives

Shumlin rejects all notions that he is anything less than sincere when it comes to implementing the nation’s first single payer system.

“I am the governor who is committed to passing the first sensible single payer system in America, where health care is a right and not a privilege,” he said in an interview on Tuesday. “We’re going to get it done, and the best financing plan will be one where you pay based on your ability to pay.

“We’re going to be working together with the Legislature — with Democrats, Republicans, independents and Progressives — to develop that financing plan to be ready to be passed at the beginning of the next biennium,” Shumlin added.

But not all lawmakers are on the same page as Shumlin.

Sen. Joe Benning, R-Caledonia, is the Senate minority leader. He equates this undertaking to that of mustering troops and raising capital for the Civil War in 1861. But with Vermont’s aging population, he expects Vermonters to pay much more than $1.6 billion to finance a single payer system.

“I’m beginning to question whether this is something that can actually be accomplished,” he said. “That’s why we have not seen any kind of financing plan out there and probably won’t until they either make a formal decision it’s not going to happen or they’re satisfied they’ve played out the politics of it long enough. … I’m very frustrated we have not gotten answers to the most basic of questions.”

Many of those in favor of a single payer system are frustrated, too. Progressive Party leaders and lawmakers — who take the stance that Vermonters would pay less in taxes than they do in premiums — voiced concern this week that the Shumlin administration is showing signs that it won’t follow through.

This past legislative session, the governor held his line hard on “no new broad-based taxes,” and he brushed aside the Legislature’s recommended reforms to the state’s income tax code [4]— changes that were aimed at raising taxes on the wealthiest Vermonters and lowering taxes on an estimated 200,000 middle class taxpayers.

“The question is: Are we putting off raising revenue to wait for health care reform or is the administration unwilling to raise revenue for any purpose whatsoever?” Pollina asked.

Right now, he said, it appears the latter policy is prevailing.

“This past session, the clearest example would be the unwillingness to raise the relatively small amount of revenue that would have been necessary to hold harmless those people moving from Catamount to the exchange,” Pollina said.

The Shumlin administration set aside $4.5 million in fiscal year 2014 for health insurance subsidies to aid lower income working Vermonters, many of whom are currently enrolled on the state-subsidized Catamount and VHAP programs. The aim was to cushion the blow of rising health care costs associated with the state’s new health insurance marketplace and the Affordable Care Act, or Obamacare.

When the feds refused to match part of the proposed subsidies, the administration held the state allocation at $4.5 million and decided not to make up the difference from its first proposal [6]. The Legislature then followed suit.

“The governor showed that it wasn’t a priority because he was not willing to allocate the money even if it could be raised in a way that was revenue neutral,” Pollina said.

Rep. Chris Pearson, P-Burlington, sits on the House Health Care Committee. He shares Pollina’s concerns about low-income subsidies.

“For many people, this is phase one of the reform efforts,” he said of the exchange. “I worry that we’re not doing enough to give them confidence in the work we’re doing. The most basic way people are going to interact with our health care system is by going to the hospital and paying the bill, and we made it harder (for some people) to pay the bill.”

Pearson did acknowledge that this legislative session, from a health care standpoint, was more focused on policymaking for the health care exchange than it was preparing for a single payer system in 2017.

“This is not to say, ‘Let’s trust these guys. They’re doing great work,’” he said. “It is to say, ‘We should be worried, but they are doing a heck of a lot around health care, and we need to push them to make sure they take it all the way.’”

Middlebury College professor Ellen Oxfeld  was a founding member of Vermont’s Progressive Party and is a leading advocate of a single payer system. She was a strong supporter of Shumlin’s initial bid for governor, advocating in 2010 that he could deliver universal health care.

She said the administration must now focus on creating a financing plan.

“Even though I don’t agree with their approach to taxes this session, I can’t say whether it has anything to do with single payer because the single payer tax is replacing a premium with a tax,” Oxfeld said. “Is the Shumlin administration’s approach to taxation this session indicative of its resolve to follow through on single payer? I hope not.”

Updated at 8:37 a.m. on May 21, 2013 with a quote from Ellen Oxfeld  clarifying her stance.