Vermont bails on single-payer health care

By Sarah Wheaton
12/17/14 6:18 PM EST - POLITICO

Vermont Gov. Peter Shumlin on Wednesday dropped his plan to enact a single-payer health care system in his state — a plan that had won praise from liberals but never really got much past the framework stage.

gThis is not the right timeh for enacting single payer, Shumlin said in a statement, citing the big tax increases that would be required to pay for it.

Shumlin faced deep skepticism that lawmakers could agree on a way to pay for his ambitious goal and that the feds would agree to everything he needed to create the first state-based single-payer system in 2017.

And that was all before Shumlin, a Democrat, almost lost reelection last month in one of the countryfs most liberal states. And it was before MIT economist Jonathan Gruber, the now notorious Obamacare consultant who also advised Vermont until his $400,000 contract was killed amid the controversy, became political poison.

Shumlin had missed two earlier financing deadlines but finally released his proposal. But he immediately cast it as gdetrimental to Vermonters.h The model called for businesses to take on a double-digit payroll tax, while individuals would face up to a 9.5 percent premium assessment. Big businesses, in particular, didnft want to pay for Shumlinfs plan while maintaining their own employee health plans.

gThese are simply not tax rates that I can responsibly support or urge the Legislature to pass,h the governor said. gIn my judgment, the potential economic disruption and risks would be too great to small businesses, working families and the statefs economy.h

And that was for a plan that would not be truly single payer. Large companies with self-insured plans regulated by ERISA would have been exempt. And Medicare also would have operated separately, unless the state got a waiver, which was a long shot.

Shumlin added that federal funds available for the transition were $150 million less than expected.

He also has a lot less political capital than before November. Shumlin, chairman of the Democratic Governors Association, still hasnft even officially won his own reelection bid: The Legislature will settle the outcome of the November race in January because Shumlin failed to win more than 50 percent of the vote. Hefs leading his Republican challenger by just a few thousand ballots.

And the substance of the plan isnft its only politically problematic aspect. Gruber, now infamous for his blunt assessments of the Affordable Care Act and his remarks about gstupidh voters, was until recently a state consultant. Days after the election, video emerged of him dismissing criticism of Vermontfs plan in 2011 by asking, gWas this written by my adolescent children, by any chance?h State officials said they would cut off his contract.

Advocates of a single-payer plan said Shumlin should not be able to cast aside Act 48, the 2011 law that called for the creation of Green Mountain Care, without repealing it. A group planned to hold a rally in front of the statehouse on Thursday to protest his decision.

gThe governorfs misguided decision was a completely unnecessary result of a failed policy calculation that he pursued without Democratic input,h the group Healthcare Is a Human Right Campaign said in a statement.

Rachana Pradhan contributed to this report.