Why Bernie Sanders' Single-Payer Health Care Plan Failed In Vermont

ARI SHAPIRO, HOST:

Now we're going to hear why Vermont couldn't make a single-payer health system work. In 2011, Vermont Governor Peter Shumlin described what he called Green Mountain Care on PRI's "The Takeaway."

(SOUNDBITE OF RADIO SHOW, "THE TAKEAWAY")

PETER SHUMLIN: Every resident of Vermont would have a Green Mountain health care card. It'll be publicly financed instead of being required by business. And it really is modeled on what everyone else in the world is doing in developed countries except for America.

SHAPIRO: Vermont's legislature passed a framework for the system without any funding. To pick up the rest of the story, Linda Blumberg joins us now. She's a senior fellow in the Health Policy Center at the Urban Institute. Hi there.

LINDA BLUMBERG: Hi.

SHAPIRO: Was the lack of funding the reason that this plan ultimately didn't work?

BLUMBERG: I think there's a combination of causes why it didn't work. So the lack of funding is clearly part of it because once they sat down and assessed what types of taxes they would need in order to make the plan feasible, they were, on the face of them, pretty high. And so they figured that they would not be politically palatable.

But I think part of it aside from just the sheer tax revenue that would be needed to finance a program like this - what they ran into was a real administrative and process problem also because they weren't explaining to people in a clear way over time, here's what the costs are going to be; here's what the benefits are going to be. Here's who's going to pay more. Here's who's going to pay less. This is why it's worth it for us to move from the system we're in to another one. And because this is such a big change, then when you just see the price tag, it's very shocking if you don't have an understanding of what is the core value behind doing this kind of change.

SHAPIRO: In Vermont, Governor Shumlin ultimately backed away from his signature policy after a few years. And having studied it, I wonder whether you see a way that it could easily have worked. Is there a simple fix that would have made it successful, or is the lesson that it's just really, really complicated and difficult to get something like this in place?

BLUMBERG: I think the lesson is it's very difficult. And it's not that it can't be done. We could certainly raise enough revenue to finance a program like this. But the problem is - is that any program like this has to assess what's going to be the role for private insurers? What's going to be the level of benefits and cost-sharing requirements? How are - at what level are providers going to be paid? These are political challenges at every turn.

And then people have to understand much more clearly than I think people did in this circumstance that their private payments, their private spending would go down even though their tax dollars would go up. But that by definition is going to lead to winners and losers depending upon how the financing works.

SHAPIRO: What kind of impact did the failure of this state policy in Vermont have on the national conversation around single-payer health care?

BLUMBERG: Well, I think it was a - an indication for a lot of folks who look at these issues regularly that, you know, the financing part and the face difficulty, the challenges of seeing these large tax increases is really very politically challenging. And that's aside from having a national political resistance from industries like the private insurance industry, the providers and others. So it really I think is a telling example of what the challenges are. Not that they couldn't someday be overcome, but there's a real transition issue between getting from here to there.

SHAPIRO: For people who do support this policy, do you think the shortest way to getting it enacted is on a state-by-state basis or on the federal level as Senator Sanders is proposing?

BLUMBERG: I think doing it on a state-by-state basis is really challenging. You know, there are certain states that are high-income states that have a lot of private health care spending that could be shifted into the public sector already in the system, and those are the states that are most likely to be able to do something like this.

But if you take a state that has a lot of un-insurance, not a lot of employer-based insurance in the system so not a lot of private dollars already that can just be shifted from, you know, one side of the ledger to the other, then there's...

SHAPIRO: It's a lot harder.

BLUMBERG: It's a lot harder to do.

SHAPIRO: Linda Blumberg of the Urban Institute, thanks a lot.

BLUMBERG: Thank you.

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