Putting The Health Care Cart Before The Horse Is Even Born

Shumlin's plan in a nutshell

Shumlin’s plan in a nutshell

There’s nothing quite like being late to the party.  Democrats in the legislature are now calling for a “full understanding” of who pays for health care costs.  This is three years after Act 48 was passed, which mandates a transition to single-payer.  Whew.  Just in time.

“Before entertaining any transition to a new health care system, we need to have a full understanding of who pays today, and how well the system is working today.” Lincoln Rep. Mike Fisher, chairman of the House Health Care Committee.

So now, Democrats are finally getting around to learning the funding mechanisms for the industry they voted to completely overhaul, with the goal of removing all the payers in the system and transforming them into one?  This is like like trying to learn how space shuttle engines work 10 minutes before liftoff:  “Well, we’re pretty sure it’ll work – fingers crossed!”.  Out here in the real world, you can’t buy a house or a car if you can’t afford it, which means someone does an analysis of revenues and expenses prior to execution.

The two words missing in Fisher’s statement are “due” and “diligence”, which, much like the federal health care law, were completely and utterly absent in 2011 when Democrats decided they knew better than anybody else how to manage the largest component of state GDP, while simultaneously putting its implementation off to a much more politically convenient date.  Not only have Democrats now admitted they don’t understand the funding mechanism that they voted to completely remake (even though that data is readily available in dozens of different reports, and has been for years – here’s one from 2009), they still don’t have a financing plan for it, a plan that is estimated will exceed the state’s entire annual tax revenue take.  The FY2015 budget estimates $1.438 billion in revenue; the estimated cost for Vermont’s single-payer ranges from $1.8 billion and $2.6 billion.

In fact, the financing plan is so far back in its prototype stages the state of Vermont is only now receiving bids on an RFP to evaluate financing plans for single-payer.  More money spent to see if we can even afford to do the thing which we’re now going to do.

But let’s get back to the legislators’ plans, plans which seem to duplicate existing work that taxpayers have already paid for:

The work that will be done by consultants for the Legislature will in some ways be nearly identical to the analysis being performed by consultants for the Shumlin Administration. They’ll try to determine not just how much individuals and businesses pay in the form of insurance premiums, but also the impact of health care related costs on other household expenses, such as property tax bills.

There are elements of the original analysis done by Dr. Hsaio in 2011 that are not available, which is not an accident, since those elements speak to the funding mechanism (or lack of one) directly.  As others have noted,

Not pictured:  The taxpayers paying for the marbles in the first place.

Not pictured: The taxpayers paying for the marbles in the first place.

the original pitch for single-payer was that it would reduce costs, but now its being conceded that the only reduction likely to occur is a reduction in the rate of cost growth – if even that can be achieved.  Shumlin himself has said “If we can’t get costs under control,” he said, “we’ll pick up our marbles and go home.”, a sentiment that some legislators are now realizing might be the only rational option.

That’s not what was sold to Vermonters in 2011 by our elected representatives.  Nor was it assumed that the legislature and the governor, both of whom have taken oaths to faithfully execute their offices, would send us down into a dark tunnel without at least thinking to buy some flashlights before we all went in. What this really means, though, is that Democrats are searching for political cover to help their re-election chances in the next several years, but more specifically, after Vermont’s single-payer system blooms into its full flower.  Then they will be able to point back to this fine work and claim that they did their job – even if it was three years too late.








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