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.