Déjà vu all over again in Vermont 

Vermont’s  governor recently signed what has been billed as the nation’s first single-payer health care law.

Single payer, for those who aren’t policy wonks, is a Canadian-style system where government pays all the bills, calls all the shots, collects plenty of taxes and hires plenty of bureaucrats to finance and manage it.

But the government sets the budget, so Canadians face long waits for care — an average of 18.2 weeks in 2010 from seeing a primary care doctor to getting treatment by a specialist. Seventeen percent of Canadians are waiting to get a primary care doctor.

Upon examination, Vermont’s new law does little more than what’s already required under Obamacare. Its big accomplishment is the Vermont Health Benefit Exchange, essentially a website already required by Obamacare to sell government-approved private insurance by 2014, and the Green Mountain Care Board, a sort of executive committee that will introduce price controls on health care in Vermont and design the details of the future single-payer plan.

Backers are aiming for a single-payer plan by 2014, but this requires permission from multiple federal agencies, some of which aren’t in operation until 2017. Most important, state legislators punted on financing the undertaking.

It’s not hard to understand why. Harvard University professor William Hsiao, who helped design the plan, places payroll taxes needed to sustain the system at 12.5 percent.

But the state’s economy is stagnant and unemployment is problematic. Slapping a whopping tax on employment will drive the few companies left in Vermont, such as Ben and Jerry’s, to neighboring states.

What’s really happening in this bill, in conjunction with health care provisions in Gov. Peter Shumlin’s budget, is an attempt to comply with Obamacare’s dictate that every state has an exchange at the same time it cleans up its last failed attempt at government health care by shifting the few folks left on the much-heralded Catamount Care to Medicaid. This also sends the bill to federal taxpayers and Vermont’s doctors and hospitals.

Vermont legislators passed Catamount Care in 2006 to much acclaim. Health policy guru Kenneth E. Thorpe claimed in a Health Affairs journal article that this plan would serve as a model for state-based health reform.

It was supposed to meet the demand for affordable, guaranteed-issue health care, leading to near-universal coverage by 2010. It failed. Catamount Care enrollment is a mere 12,000, perhaps because it requires people to pay. The average monthly premium is $527.

Instead of accurately declaring Catamount Care a failure and putting it in the company of other expensive state disasters such as Tennessee’s Tenncare, Maine’s Dirigo Care and ultimately Massachusetts’s Romneycare, the law puts the focus on a utopian dream of health care for everyone with the bill being paid by no one.

The reality is that Vermont’s doctors and hospitals will pay the bill. Medicaid reimburses at 79 percent of Medicare payments. Private insurance reimburses at 125 to 135 percent of Medicare.

Catamount Care reimbursed at 110 percent of Medicare, the deal politicians cut to get the providers to agree with the plan. By shutting it down and moving all enrollees to Medicaid, the government is breaking the deal with doctors and shifting the costs onto them.

According to the Vermont Medical Society, only 44 percent of physicians practicing internal medicine accept new Medicaid patients.

Vermont’s new bill will move the state to a government-run health care system, but it’s not the utopian one advertised by today’s politicians. It’s Medicaid, a federal-state program that over-promises and under-delivers, a program in which everything is free at the point of consumption, but nothing much of value is available — at least not without a long, hard wait.
Sally C. Pipes is president, CEO and Taube Fellow in Health Care Studies at the Pacific Research Institute.

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