Vermont bails on single-payer health care

Vermont Gov. Peter Shumlin on Wednesday dropped his plan to enact a single-payer health care system in his state — a plan that had won praise from liberals but never really got much past the framework stage.

“This is not the right time” for enacting single payer, Shumlin said in a statement, citing the big tax increases that would be required to pay for it.


Shumlin faced deep skepticism that lawmakers could agree on a way to pay for his ambitious goal and that the feds would agree to everything he needed to create the first state-based single-payer system in 2017.

And that was all before Shumlin, a Democrat, almost lost reelection last month in one of the country’s most liberal states. And it was before MIT economist Jonathan Gruber, the now notorious Obamacare consultant who also advised Vermont until his $400,000 contract was killed amid the controversy, became political poison.

Shumlin had missed two earlier financing deadlines but finally released his proposal. But he immediately cast it as “detrimental to Vermonters.” The model called for businesses to take on a double-digit payroll tax, while individuals would face up to a 9.5 percent premium assessment. Big businesses, in particular, didn’t want to pay for Shumlin’s plan while maintaining their own employee health plans.

“These are simply not tax rates that I can responsibly support or urge the Legislature to pass,” the governor said. “In my judgment, the potential economic disruption and risks would be too great to small businesses, working families and the state’s economy.”

And that was for a plan that would not be truly single payer. Large companies with self-insured plans regulated by ERISA would have been exempt. And Medicare also would have operated separately, unless the state got a waiver, which was a long shot.

Shumlin added that federal funds available for the transition were $150 million less than expected.

He also has a lot less political capital than before November. Shumlin, chairman of the Democratic Governors Association, still hasn’t even officially won his own reelection bid: The Legislature will settle the outcome of the November race in January because Shumlin failed to win more than 50 percent of the vote. He’s leading his Republican challenger by just a few thousand ballots.

And the substance of the plan isn’t its only politically problematic aspect. Gruber, now infamous for his blunt assessments of the Affordable Care Act and his remarks about “stupid” voters, was until recently a state consultant. Days after the election, video emerged of him dismissing criticism of Vermont’s plan in 2011 by asking, “Was this written by my adolescent children, by any chance?” State officials said they would cut off his contract.

Advocates of a single-payer plan said Shumlin should not be able to cast aside Act 48, the 2011 law that called for the creation of Green Mountain Care, without repealing it. A group planned to hold a rally in front of the statehouse on Thursday to protest his decision.

“The governor’s misguided decision was a completely unnecessary result of a failed policy calculation that he pursued without Democratic input,” the group Healthcare Is a Human Right Campaign said in a statement.

Rachana Pradhan contributed to this report.