State Watch

Vermont and the Single-Payer Frontier

Beware if Green Mountain Care can hide its red ink.

By 4.18.14

Wikimedia Commons: chensiyuan

These days it seems everyone has a grievance with Obamacare. This includes progressives, who are annoyed that the law isn’t communizing the entire American health care system with sufficient alacrity.

Fed up with the feds, activists are now looking north to Vermont, which three years ago passed a law requiring a single-payer health care system to be in place by 2017 (the first year Obamacare allows states to deviate from the federal model). Dubbed Green Mountain Care, the program would take a page from neighboring Canada and insure the state’s 620,000 residents on government rolls.

As Megan McArdle noted, there’s just one wrinkle in the plan: Vermont doesn’t have the foggiest idea how to pay for it. The law has a $2 billion annual price tag, in a state that takes in $2.7 billion in revenue every year—that would mean a 74 percent increase in the state coffers. The hoary progressive catchall of “Tax the rich!!” wouldn’t quite cut it; to raise the money, Vermont would have to hike its state sales tax from 6 percent to 29 percent, according to State Representative Don Turner. Even in deep-blue New England, that’s a smidge high.

All this has produced headaches for Governor Peter Shumlin, an enthusiast of single-payer but not of paying for it. Shumlin was required by law to release financing plans for Green Mountain Care in January 2013, which he still hasn’t done, stirring up a bipartisan hornet’s nest of state legislators. “We have a governor who is violating the law,” Republican State Senator Joseph Benning told Vermont Watchdog. “I want to make sure that we have a place to go if this doesn’t work out,” said Democrat Senate President John Campbell.

Shumlin seems to understand that the stakes are high. “If we screw it up, it will set back this effort for a long time,” he said recently. Usually bad progressive ideas originate in San Francisco, still trapped in the eddy of seemingly perpetual social revolution. But single-payer is finding its legs in a small rural state with the country's second-oldest median population that’s even been known to elect a Republican now and then. Can Green Mountain Care really work? And will single-payer metastasize if it does?

Obamacare had its origins at the state level too—in Massachusetts, under Governor Mitt Romney. Commonwealth Care, or “Romneycare” as it’s more popularly known, was passed in 2006 and promptly exploded health care costs, requiring the state to shift most of the burden to the federal government. Tim Cahill, the Massachusetts state treasurer in charge of implementing Romneycare, told me in 2010 that if it weren’t for additional Medicare and Medicaid payments, the health law would have bankrupted the state.

Today Romneycare is considered a success, touted by well-pedigreed Republicans as an example of what can be accomplished for the masses when we set aside all that Tea Party nonsense and trick Vicki into inviting us out to the compound for champagne brunch. But the law—and, indeed, the entire Massachusetts state budget—is only possible today because the feds picked up much of the tab. The fiction of successful Romneycare would later be used by Democrats to sell Obamacare.

Could something similar happen with single-payer? There’s no way Green Mountain Care can be sufficiently funded without sending Vermonters stampeding to New Hampshire and New York. But if Shumlin could arrange for Washington to pick up a sizable chunk of the bill, he might be able to create the illusion that Vermont has a self-sufficient, government-run health care system. Meanwhile Obamacare is dumping millions of new enrollees on Medicaid, the closest thing America has to nationalized health insurance.

You can hear the argument now: Single-payer worked in Vermont. Medicaid is expanding anyways. It’s time for Medicare for all!

There are still plenty of obstacles between now and then. Gubernatorial elections are held every two years in Vermont, meaning Shumlin must survive two campaigns before single-payer goes live in 2017. The funding plan, when it’s finally released, will inevitably cause controversy. But nevertheless, conservatives should watch Vermont with a wary gaze. If Green Mountain Care can hide its mudslide of red ink, it might be the perfect laboratory experiment for mendacious progressives.

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About the Author

Matt Purple is an editor at Rare.us.