By: DAVE GRAM 01/23/11 12:13 PM
Associated Press
When Harvard economist and international health care consultant William Hsiao proposed that Vermont become the first state to move to a single-payer system of health insurance, the immediate response from just about every quarter was to ask a question.

The Vermont Medical Society wants to know how it would affect the doctor-patient relationship; Vermonters with out-of-state employers wonder if they’d have to pay a payroll tax to support the Vermont plan; and advocates for low-income Vermonters questioned the effect on Medicaid recipients.

The biggest question of all, however, may be whether it’s an exercise in futility to think one tiny state could overcome federal rules and regulations to make it a reality.

The Vermont Employers Health Alliance, which represents businesses in health care debates, counts no fewer than 14 waivers — or free passes around a law — the state would have to get from the federal government to get a state single-payer plan off the ground.

"I’m not a lawyer, and this list may not be exhaustive," said Craig Fuller, the Alliance’s managing director.

Hsiao, 75, who designed Taiwan’s health system and has worked on those in eight other countries, defines single-payer as "a system that provides insurance to every … resident with a common benefit package and channels all payments to providers through a single pipe with uniform payments rates and common claim processes and adjudication procedures."

Liberals ranging from Gov. Peter Shumlin to the Vermont Public Interest Research Group welcomed the efforts of Hsiao and his 22-member team.

Shumlin said Hsiao’s report showed the way toward trimming $500 million from the state’s more than $5 billion annual health care bill in its first year. "That’s very good news for Vermonters who are being forced to spend $1 million more tomorrow than we did today on health care."

Releasing his draft report Wednesday, Hsiao described an "essential benefit" package that would cover 87 percent of Vermonters’ medical and mental health costs and 77 of their costs for medicines. Medicaid usually pays significantly more than that now, Kerr said. Covering 77 percent of a $200 bottle of pills still would leave a poor person needing to come up with $46.

"We would have concerns about the impacts on low-income Vermonters and that’s something that we would be looking at," said Trinka Kerr, health care ombudsman with Vermont Legal Aid.

Last year’s Legislature commissioned the $300,000 study; this year’s is about as strongly Democratic, and newly elected Gov. Peter Shumlin made a push for single-payer a cornerstone of his campaign. He says the administrative savings and cost controls would save $500 million of the more than $5 billion the state spends each year on health care.

But at least several of the federal waivers Vermont needs would require votes in Congress, where, if Wednesday night’s vote in the U.S. House to repeal last year’s national health care legislation is any indication, the direction in which Vermont appears headed is unlikely to garner support from the new Republican majority in Washington.

The Democrats who controlled Congress through last year never seriously considered a single-payer system for the country; they stopped well short of even a "public option" of government-supplied health insurance for the general public. Even going as far as the bill did, calling on states to set up exchanges in which citizens would be required to buy insurance from a range of private companies, was labeled "socialistic" during Wednesday’s floor debate in the U.S. House.

Shumlin and Vermont’s tiny, three-member congressional delegation are vowing to push ahead nonetheless. The four stood together last week, saying Vermont’s first effort in Washington will be to move from 2017 to 2014 the date under last year’s federal bill when states will get the flexibility Vermont would need at a minimum to experiment with its own plan.

Across the political spectrum, in both Montpelier and Washington, there appears to be agreement that the current health care system needs improvement.

In Montpelier, nine-term Republican Rep. Phil Winters, a member of the budget-writing Appropriations Committee and a Williamstown dairy farmer for 27 years, said he was trying to be open-minded, but sounded skeptical.

"I’m trying not to look at it (as) completely negative, because we’ve got to do something," he said. "But don’t do something just for the sake of doing it."

Read more at the Washington Examiner: http://washingtonexaminer.com/news/2011/01/vt-health-reform-proposal-raises-many-questions#ixzz1By5c2h1m