Why Single Payer in Vermont Isn’t a Game-Changer

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Vermont Gov. Peter Shumlin signed a bill on Thursday authorizing the state to adopt single payer health care – a move some liberals are cheering, saying the state could be a model for single payer on a much larger scale. But not so fast.

Here’s why liberals shouldn’t celebrate just yet and why Vermont’s single payer model, even if it goes into practice, could not be easily converted into a national model or trigger a wave of state action elsewhere.

1. A Vermont single-payer system, in which all state residents would be insured through a one public system, would not go into effect for at least six years. Such a system is not permitted under the Affordable Care Act, so the state will need a waiver from the federal government to proceed and waivers like that won’t become available until 2017. Getting one is possible, but there could be a different governor and a different Administration in Washington by then, which would change the odds.

2. Opposition will have lots of time to get organized by 2017. Even if the current governor and state legislature support a single-payer system, private insurers – who would be mostly driven out of the state – certainly will not. This is a powerful group to reckon with. There is also trepidation among doctors and hospitals that reimbursements from a public single-payer system could be far lower than from private insurers.

3. Vermont is not like the rest of the country. First, the state is home to only about 600,000 people. It’s not clear that the scale is large enough to test out a single-payer system and see if it could be instituted in larger states or nationwide. Vermont’s existing private insurance market is also unlike most other places. The state has very strict insurance regulation that has whittled down the number of private insurers selling policies on the individual market. Turning Vermont’s existing system into single-payer would be a huge change, but it’s not the same as a big state like California making the jump or a far less regulated state like Alabama.

4. Vermont is not sure how it will pay for its single-payer system. Even if overall costs might be less than current costs with administrative savings, for example, state lawmakers haven’t yet divulged how they will collect the revenue needed. New taxes will likely be levied – always a popular sell – which can only happen by an act of the state legislature.