Legislative Memo Outlines Single-Payer Alternative

Apr 15, 2014

It’s only three and a half pages long. And it’s much more of a conceptual outline than a fully formed plan. But a March 24 memo, authored by a policy analyst hired by the Legislature earlier this year, shows that at least some lawmakers are already considering alternatives to the single-payer proposal Gov. Peter Shumlin will drop on their desks next year.

Shumlin last month decided to put off until next January his proposal for what taxes he’ll propose using to pay for the publicly financed system. But some legislators are already pondering alternatives to the model being pushed by the governor. And a private memo obtained by VPR is helping to shine a light on this behind-the-scenes legislative process.

"I have always expected that there will be alternative provisions that are put on the table. And they will stand on their own merit. I think that the governor's responsibility is going to be to show that what he puts on the table makes the most sense." - House Speaker Shap Smith

“You know, I have always expected that there will be alternative provisions that are put on the table,” House Speaker Shap Smith said Tuesday. “And they will stand on their own merit. I think that the governor’s responsibility is going to be to show that what he puts on the table makes the most sense.”

Smith says he hasn’t seen the concept document that outlines an alternative to single payer. But he says it doesn’t surprise him that members of the House and Senate are mulling alternatives to the approximately $2 billion public financing plan that Shumlin says is needed to replace the premium-based model in place now.

The document was written by Ken Thorpe, an Emory University professor hired in January to provide expert advice to members of the Legislature. And it differs from the vision touted by Shumlin in two fundamental ways: it doesn’t create a single, universal insurance plan; and it doesn’t rely on the multi-billion-dollar tax structure Shumlin wants to use to fund his single-payer system.

The memo details a reform concept that would maintain the premium-based model in place now, and use federal and state subsidies to pay for coverage for uninsured and under-insured Vermonters. The plan would also leave untouched the self-insured companies that would presumably be forced to pay new taxes in whatever single-payer proposal Shumlin comes up with.

Thorpe is working on other concepts on behalf of legislators, and he didn’t respond to requests for comment. Chittenden Sen. Tim Ashe, the Democratic/Progressive Chairman of the Senate Committee on Finance, says that since the Legislature passed legislation in 2011 that put the state on a path toward single-payer, many elected officials have come to better appreciate the difficulties involved.

“The Legislature knew that there were multiple ways to achieve the goals and said, ‘administration, you come up with the best mechanism to make sure we have all those goals met.’ It’s three years later, and the administration has been working on it,” Ashe said Tuesday. “They’re finding that it’s more challenging perhaps than they thought when we set out on this journey three years ago.”

Ashe says the baseline goals enshrined in the single-payer law, called Act 48, are that all Vermonters will have health insurance, that the insurance will be comprehensive, and that it will be financed in a fair and equitable way. And Ashe says there are multiple routes the Legislature could take to achieve those goals.

“In the end, when the administration presents a plan, I think the conversation will be: is that the only way to deliver universal health care, decent benefits, affordable price? Or are there other mechanisms? And what are the relative benefits and costs of taking these different approaches,” Ashe says.

Senate President John Campbell came under heavy fire last month after questioning the political viability of a $2 billion tax plan, and saying that the Legislature ought to consider other ways to realize the promise of Act 48.

Smith says the work being done by legislators now is part of a process to ensure the best possible health care reform plan for Vermonters next year.

“I don’t think that it’s a bad thing to push the administration and the governor to put something on the table that will work better than what the alternatives are,” Smith says.

Smith says the burden of producing a fully fledged proposal remains with the governor.

“My view is that it’s the governor’s responsibility to put a plan on the table, and that it’s not our responsibility to work something up before that happens,” Smith says. “Our responsibility. once a plan is put on the table is to push, pull, poke – figure out whether it works. And if it doesn’t work, perhaps to put an alternative on the table that might work, and that might achieve the same goal.”

Ashe says his committee’s work with Thorpe isn’t about developing a plan per se, but a framework through which it can assess the merits of the possibilities ahead.

“We haven’t asked (Thorpe) to develop a plan, but we’ve engaged him to help us better understand the options before the administration so that when the administration presents us with something, not only can we evaluate it, we can evaluate the alternatives,” Ashe says.

Ashe says there’s reluctance among elected officials in Montpelier to discuss publicly ideas that deviate from the single-payer framework favored by the administration.

“One of the challenges of health care reform is publicly brainstorming becomes controversial very quickly,” Ashe says. “Any idea that breaks from a doctrinaire position in either direction, the messenger sometimes comes back with more scars than when he arrived.”

Thorpe’s contract runs through the end of the legislative session. Smith says the Legislature may decide to extend his contract through the off-session as well.