An economist who helped the Obama administration design the Affordable Care Act is coming to Vermont to help Gov. Peter Shumlin develop a proposal for single-payer health care. And his work will help decide which taxes Shumlin will propose using to raise the $2 billion needed to support the new system.
Jonathan Gruber is an economist at the Massachusetts Institute of Technology, and his most recent claim to fame is as a key advisor in the creation of Obamacare. The Shumlin administration this week inked a $400,000 contract with Gruber, who is being paid to help policy makers here understand how various single-payer financing schemes would impact individuals and businesses.
Robin Lunge, director for health care reform for the Shumlin administration, says Gruber’s analyses won’t necessarily allow people to see precisely how much they’d pay in a publicly financed system.
“But it will help us explain to people … who would be winner and who would be losers,” Lunge says.
The ratio of winners to losers, as well as the severity of the losses for those on the bad end of the equation, will figure largely in Shumlin’s ability to sell his single-payer proposal to the Legislature. The administration continues to hide from the public which financing schemes it’s considering using – a secrecy that has chagrined not only opponents of the reform plan, but some single-payer supporters.
“The governor has said we'll release it when we’re ready, and when we really think that we’ve fully vetted it and have seen all the impacts and can explain it in a way that Vermonters can get a full sense of the work that we’ve done,” Lunge says.
Lunge says the administration doesn’t plan to impose its plan on the Legislature, and that there will be plenty of time for debate after the release of a financing proposal next year.
“We’re not thinking we’re going to come out with a plan that’s going to get rubber-stamped by anyone – that’s when the public debate starts,” she says.
Gruber’s specialty is in “micro-simulation” modeling that shows how different economic variables will impact difference people and businesses. Lunge says the exercise will begin with a baseline analysis examining who’s paying what for health care now, and the forms in which those expenditures are occurring.
Lunge says that will then allow the administration understand how various public financing packages alter the distribution of health care costs, “and also … ensure that in our policy approaches that we are protecting Vermronters and Vermont’s economy.”
The administration will pay Moody’s Analytics an additional $50,000 to analyze how the effects on individuals and businesses will ripple out into the broader economy.
The administration will also consider the merits of various benefit plans, weighing the benefits of lower co-pays or deductibles against the pitfalls of the higher taxes that would be needed to pay for it all.
Shumlin’s critics say it’s irresponsible to commit to single-payer without a deeper understanding of how the tax reforms would impact the economy. Lunge says all the analyses to date have shown the benefits of public financing, and that Gruber’s work will cement the argument.
Gruber is a star in the health care reform world, and was named one of the “100 Most Powerful People in Health Care in the United States” by Modern Healthcare Magazine in 2012.
He was a principal architect of Massachusetts health care reform plan – so-called RomneyCare – which served as a blueprint for the insurance exchanges created by the Affordable Care Act.
The Legislature, meanwhile, signed a $174,000 contract with the Rand Corporation Monday so that it can do its own independent evaluation of the health care reform proposal submitted next year by the governor.
Lawmakers’ contract with Rand isn’t as broad in scope, and calls only for a detailed analysis of how individuals and businesses pay for health care today, rather than a demonstration of how alternate financing schemes would impact various demographics.