More than 100 economic experts are throwing their weight behind Vermont’s ambitious plans to build a universal health care system — a policy that was put on hold at the end of last year, after Gov. Peter Shumlin (D) said he wasn’t sure how the state could pay for it.
Over the past several years, Vermont has been working on building the first single-payer system in the country, a health care model under which all medically necessary services would be covered by the government. State officials have been dedicated to the reforms because the legislature approved a measure, called Act 48, that required Vermont to implement a single-payer system by 2017.
Supporters hoped that Vermont might prove that universal health care is possible in the United States, potentially inspiring other states to work on similar reforms. But progress stalled last December, when Shumlin announced that that “this is not the right time” to move forward with the state’s proposal, saying it would cost Vermont an estimated $3 billion per year by the end of the decade.
Now, economic professors from across the country are taking issue with the financial arguments against single-payer reform, saying that a government-funded system is “not only economically feasible but highly preferable to a fragmented market-based insurance system.”
In an open letter delivered to Shumlin and the state legislature, the economists argue that health care should be a service that’s provided as a public good, rather than a service that is left up to the whims of the private market. They write that financing health care is actually a more efficient way for governments to ensure their citizens are healthy, which saves money in the long run.
“Evidence from around the world demonstrates that publicly financed health care systems result in improved health outcomes, lower costs and greater equity,” the open letter states. “Public financing is not a matter of raising new money, but of distributing existing payments more equitably and efficiently.”
Shumlin, who only narrowly won re-election last fall, said the liberal state needed to put its single-payer reforms on hold because they will cost more money than initially projected. When he announced he was pausing the plan in December, he said the program would have required businesses to take on a 11.5 percent payroll tax and raised income taxes on individuals by up to 9.5 percent. “Risk of economic shock is too high at this time to offer a plan that I can responsibly support for passage in the Legislature,” the governor said.
Proponents of universal health care predicted that the close election would make it more difficult for the embattled governor to push forward with the ambitious single-payer plan. Activists in the state weren’t pleased when that turned out to be true. After Shumlin abandoned Act 48, Vermont residents gathered at the state house to burn their medical bills, saying that Shumlin’s decision was “a slap in the face of many thousands of Vermont residents who suffer from poor health and financial hardship.”
Other economic leaders have also argued in favor of the long-term benefits of universal health care. Two years ago, the president of the World Bank argued that every country should be working to implement full coverage by 2030, saying it’s an investment that actually ends up spurring growth and development.
The professors’ open letter comes on the heels of a new report released by the Vermont Workers’ Center and the National Economic and Social Rights Initiative in favor of single-payer reforms. Those two groups argue that universal health care can be implemented affordably in Vermont by taxing wealthy residents’ investment income and implementing a graduated payroll tax.