Healthcare

Vermont Abandons Single-Payer Health System

Posted on:

Vermont was the only state to undertake the liberal dream of a state-wide single-payer health care system in lieu of Obamacare (as the Affordable Care Act permitted). After discovering how much it would cost, Vermont has abandoned the idea.

Designed by Jonathan Gruber (of “the stupidity of the American voter” fame), the Green Mountain Care plan enacted in 2011 (to take effect in 2017):

  • abolished all private health insurance except those provided by multi-state employers;
  • offered substantially higher benefits: i.e., the state would pay 94% of health costs, compared to 90% under ObamaCare’s most expensive plan; and
  • was to be funded entirely by tax collections, with no individual premium payments.

But “Vermonters were stunned to discover how much their new free health care was going to cost,” writes Michael Tanner in the New York Post.

  •  Paying for Green Mountain Care would have required a 160% increase in state taxes by 2019, as much as $2.9 billion annually.
  • The state’s top income tax rate would have been raised from 8.95% to an astounding 18%. For high earners that would mean a combined federal-state income tax burden of 56%. Even lower-income Vermonters would have seen a substantial tax hike.
  • Businesses would have been hit with an 11.5% state payroll tax (on top of a federal payroll tax of 15.3% to 16.2%).
  • Payments to doctors and hospitals would have been cut by an estimated 16%, forcing some to leave the state and threatening the viability of local hospitals.
  • And even with all of that, according to numbers released by the governor’s office, the plan would be running in the red within four years.

Although “Vermont Gov. Peter Shumlin, a Democrat, announced that the state was giving up and abandoning its plans for Green Mountain Care, reports Tanner, other states are currently considering legislation similar to Vermont’s, including Illinois, Massachusetts, Ohio, Oregon, Pennsylvania and Washington.

Source: Liberal Dream of Single-Payer Health Care Dies in Vermont, New York Post, January 18, 2015