Vermont Is Waking Up from Its Single-Payer Dream to a Taxpayer Nightmare

By Tyler Hartsfield and Grace-Marie Turner

The citizens of Vermont apparently believe that Obamacare doesn’t go far enough toward government-controlled health care, so the Green Mountain State decided in 2011 to create its own single-payer health-care system.

Vermont’s Act 48 requires the new system to be in place by 2017. Halfway to the deadline, state officials do not have a plan to pay for the utopian dream.

The state’s single-payer system, dubbed Green Mountain Care, is expected to cost $2 billion a year. Vermont collected $2.7 billion of taxes in fiscal year 2013, so paying for the new health-care system could require a near doubling of taxes. Yet Act 48 also requires that the system not do economic harm to Vermont’s economy. Good luck with that!

Before it can proceed, Vermont needs waivers from the federal government allowing it to divert Medicaid and other health-care funding into the single-payer system, and then it needs to find some way to pay the rest of the tab.

Democratic state representative Jim Condon told Vermont Watchdog it’s time for Governor Peter Shumlin to shelve the ambitious plan immediately. “The deadlines for proposing financing have been missed two years in a row now, so to me that’s very disappointing. It’s becoming clearer and clearer that there is no financing plan,” Condon said.

Governor Shumlin won election in 2010 promising he would come up with a plan that equates to promising each of the 620,000 Vermont citizens a gift of $3,225 every single year to pay for “free” health care.

Three years later, neither he nor the legislature can explain how they will do that.

Supporters of a single-payer system argue that the government is better suited to negotiate health prices than health-insurance companies. The government could negotiate lower prices and achieve better coverage than the private insurance market, they say, pointing to Canada and Britain as examples.

Most Americans are rightly skeptical of such utopian promises after Obamacare, which was supposed to achieve near-universal health coverage, reduce premiums for every family by $2,500 a year, and reduce the federal budget deficit.

Single-payer advocates argue that if we could get private insurance companies out of the way, government could save all of the money spent on administrative costs and also force doctors and hospitals to accept lower payment rates.

To be sure, the lack of price transparency in our health sector is preventing a true free market for health care services. But the government cannot simply tell a doctor’s office how much a procedure will cost. Different offices and hospitals have different costs, and they offer different products and services. A procedure at a big hospital in Montpelier simply doesn’t cost the same as a similar procedure at a small doctor’s office in rural Vermont. Government officials would have to navigate the political and pricing shoals their mega-regulatory plan would create.

In the rest of the country, the argument for government control over our health sector is losing support — in November 2013, a record high 56 percent of U.S. adults believed that health care is not the government’s responsibility.

Maybe this exercise will help the left-leaning voters in Vermont and across the country realize that government services — even for something as worthy as health care — aren’t free.

Posted on National Review Online: The Corner, April 14, 2014

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