A MONTH IN THE HILLS

The future of health care in Vermont has taken a sharp turn after Gov. Peter Shumlin abandoned a four-year effort that would have made the state the first to implement a single-payer system of insurance.

Shumlin, a Democrat, had pushed since he was first elected in 2010 to create a Medicare-for-all type of insurance system providing comprehensive coverage for all of the state’s residents. Activists have long argued that a single-payer system, like those in Canada and Europe, would be more efficient and ultimately less costly than the U.S. system of multiple private insurance companies.

But the governor announced Dec. 17 that he was shelving his proposed Green Mountain Care system after a financial analysis concluded the system would have required large tax increases while nearly doubling the size of the state budget.

The Associated Press reported that the governor had asked his health care team for alternative designs, but no one was able to produce a plan to offer quality coverage at a price considered affordable.

“The bottom line is that, as we completed the financing modeling in the last several days, it became clear that the risk of economic shock is too high at this time to offer a plan I can responsibly support for passage in the Legislature,” Shumlin said in announcing the decision.
The announcement came just weeks after an election in which Shumlin, who had been expected to win a third term easily, came within 2,500 votes of losing to his Republican challenger, Scott Milne. Because no candidate received 50 percent of the vote, the governor’s race had to be settled by Legislature, which in January backed Shumlin by a vote of 110-69.

The financing plan for Green Mountain Care, completed nearly two years behind schedule, showed the system would have cost $4.3 billion in 2017, of which the federal government would have picked up about $1.7 billion. (By comparison, the entire state budget for fiscal 2015 is about $4.9 billion.)

The state’s portion of the new health care system’s cost would have been raised through an 11.5 percent payroll tax on businesses as well as sliding-scale premium assessments of up to 9.5 percent of an individual’s income. These premiums would have replaced the fees individuals now must pay to private insurers, however.

Vermont’s push toward single-payer health insurance had been closely watched by the concept’s supporters and opponents around the country, so the governor’s decision to shelve the idea attracted national attention.

The Boston Globe reported that opponents, and even some supporters, saw the move as a big setback, perhaps a death knell, for the single-payer cause.

Henry J. Aaron, a senior fellow at the liberal-leaning Brookings Institution in Washington, told the paper that the idea of a single-payer health care system “has always been a cherished dream for many in the Democratic Party.”

“In truth,” he added, “there had never been a hard, developed plan to implement such a dream. In Vermont, they finally developed a plan, and look what happened.”

But some advocates remained undeterred. In New York, Assemblyman Richard Gottfried, a Manhattan Democrat who for two decades has pushed bills to create a state-level single-payer insurance system, told Politico that Vermont’s decision amounted to a “small speed bump” for the cause.

“New York is a dramatically larger state with a much wealthier economy,” Gottfried said.
Others viewed Shumlin’s decision as a betrayal. At the governor’s inaugural ceremony last month, single-payer advocates disrupted the festivities with a protest that led to 29 arrests.
Some argued that Vermont’s plan wasn’t really a true single-payer system, in part because large companies with operations in multiple states would have been exempt from the program. This reduced the base of funding for the program while adding a layer of administrative complexity.
Meanwhile, under the health insurance exchange the state set up to comply with the federal Affordable Care Act, the number of uninsured Vermonters has been cut roughly in half in the past two years, according to data released in January. The figures show about 3.7 percent of Vermonters were uninsured in 2014, putting the state second only to Massachusetts for the lowest percentage of citizens without health insurance.

In other news from around the region in December and January:

 

State probes Saratoga land deal
The New York attorney general’s anti-corruption team is investigating a land deal in which the city of Saratoga Springs agreed to sell a downtown parking lot to a private company for a sum that critics contended was well below its market value.

The Times Union of Albany reported that the attorney general’s office delivered letters to all five City Council members on Dec. 30 advising them that an investigation was under way. The letter directed city officials to preserve records related to the land deal and be available for interviews with investigators from the attorney general’s Public Integrity Unit.

At issue is deal in which the city agreed to sell a 42-space parking lot next to the Collamer Building on Broadway for $775,000 to a limited liability corporation whose owners simultaneously agreed to sell the city a 14-acre property on Union Avenue for $200,000. The city wants to build a new fire station on the Union Avenue property.

The City Council approved a request for proposals, drawn up in 2013 by Public Safety Commissioner Christian Mathieson, that required bidders on the parking lot property to also be able to sell the city land in the Union Avenue area. The city accepted the only bid that was submitted.

Mathieson told the Times Union he was cooperating with the investigation.
“It’s hard to imagine what misconduct we’re guilty of,” he said.

Earlier in December, three former City Council members filed a court challenge in an effort to stop the land deal. The three former officials, all of whom were involved in the city’s acquisition of the Collamer parking lot in the 1970s, contended that the city could have received far more than $775,000 for the property. They contend the sale process was effectively rigged to attract a single bidder.

 

-- Compiled by Fred Daley