By: Lawrence Miller, Robin Lunge, Michael Costa
The decision to not move forward with a public financing system for health care in Vermont was an incredibly difficult one and it was not taken lightly. The charge that we essentially cooked the books for political purposes, is both absurd and insulting. There are many difficult tradeoffs in designing a new health care system that affect the lives of almost all Vermonters. It is neither fair nor borne out by serious scrutiny of our plan and the documents we released with it to say otherwise.
Some say that we could keep costs down by offering a less generous plan. This ignores the fact that the majority of Vermonters have health insurance that is equivalent to or better than our recommended plan. If you look at what most large, private employers offer today, 65% of Vermonters would have worse insurance if we had recommended a less generous plan. This percentage goes up if you include state employees and education employees and their families. To argue for a less generous plan would be to ask Vermonters to support taxes that would require some to pay more than they do now – while asking the majority of Vermonters to also swallow a benefit cut. Doing that would be unfair, impractical and divisive.
More importantly, choosing a lower benefit level – as shown in the plan and the documents we released – would actually be worse for Vermonters, as shown in the economic modeling. What a lower AV level actually does is shift more costs to individual Vermonters in the form of out-of-pocket expenses, while still requiring a sizable individual and business tax contribution. The overall burden on individual Vermonters was shown to be worse, not better, than a higher AV plan. Given the data, we can only imagine the opprobrium that would have been aimed at us had we chosen to recommend the lower AV plan. In addition, a lower AV plan has some real-world consequences – such as individuals forgoing care – that undermine the very notion of universal health care. Lastly, it asks Vermonters who are sickest or have chronic illnesses to bear the burden of more of the costs – shifting to a less fair and equitable financing plan.
Some also argue that we increased cost by deciding to cover commuters at the last second. Commuters were in our thinking from the start. Commuters pay Vermont income tax, and their employers would be asked to pay the payroll tax under Green Mountain Care so excluding them from the program would not be good policy. The documents we released with the plan shows that staff recommended including commuters in June, many months prior to the modeling, though the cost was unknown until the economic modeling was settled in early December. The implied question is why didn’t we drop commuters from the model after learning how expensive it was? Removing commuters would have required employers to not only pay for Green Mountain Care but also to continue offering insurance to commuter employees, or drop them altogether. Overall, excluding commuters would have undercut the basic message to businesses that GMC ought to be simple and allow businesses to focus less on health care and more on their work.
One curious omission is any discussion of the challenge of transitioning thousands of small Vermont businesses into Green Mountain Care. Small businesses fewer than 10 employees who do not offer health care today would pay hundreds million more in taxes. If only such a problem could be ignored. Sending these employers from scant contribution for health care to a large payroll tax with no transition would be reckless to our economy, yet would cost upward of $500 million to solve.
Obviously, we expected criticism of the decision to delay implementation of Green Mountain Care. That’s fair. Yet claiming that we somehow purposefully made the numbers look bad is not. The fact is that the math didn’t add up. Sometimes facts are stubborn things. The fact our current health care system is a mess that makes transitioning to a new system especially difficult seems to be the most stubborn fact of all.