October 16, 2019 | Updates

NYT: Vermont’s ‘Failure To Enact Single-Payer System Shows Why National Version Unlikely To Succeed’

WASHINGTON – As presidential candidates touted various new government-controlled health insurance systems on the debate stage last night, Peter Suderman, a columnist for The New York Timesexplains why Vermont’s failure to implement a Medicare for all style system “demonstrates why any similar project undertaken at a national scale is unlikely to succeed as well.” 

The first problem for any single-payer push would be political support: Mr. Shumlin campaigned on a promise to build a single-payer system in Vermont, but the public never quite bought in … One reason the plan lacked strong support was lawmakers were cagey about how to pay for it.  The 2011 proposal included no specific financing mechanism, because Mr. Shumlin’s team worried that might kill its chances …  [B]y 2014, Mr. Shumlin’s own estimates found that employers would have to pay taxes equal to about 11.5 percent of payroll, while families would have to pay as much as 9.5 percent of their annual income to make the financing work.  The plan would have nearly doubled the size of the state’s budget.  For both political and economic reasons, the cost was deemed too high.

… And so, at the end of 2014, Mr. Shumlin admitted defeat.  “I have learned that the limitations of state-based financing, the limitations of federal law, the limitations of our tax capacity and the sensitivity of our economy” make single-payer “unwise and untenable at this time,” he said.  “The risk of economic shock is too high.”  The Vermont plan was done in by high taxes, distrust of government and lack of political support.  Any effort by a Sanders administration to enact a single-payer system at a national level would probably be doomed by similar problems.

Like … Mr. Shumlin, Mr. Sanders has so far declined to lay out a plan for fully financing his Medicare for All system … But if it couldn’t work in Vermont, with a determined governor, an accommodating legislature and progressive voters, Mr. Sanders will have a tough time explaining why it will somehow succeed on a vastly larger scale.  Vermont represents a practical failure on friendly turf, and that is what makes it such a powerful counter to Mr. Sanders’s proposal.

The New York Times editorial board also acknowledged recently that “[i]n Vermont and Colorado, legislators dropped bids for a state-run single-payer system when it became clear that people would not support the tax increases needed to sustain such a program.”

Medicare for all author and presidential candidate Senator Bernie Sanders (I-VT) has refused to address the failure of Medicare for all in Vermont directly, but Roll Callreports that the state’s Democratic former Governor Peter Shumlin, who campaigned on the proposal, admitted that the 11.5 percent payroll tax and 9.5 percent income tax proposed to finance the system were too much for taxpayers: “The final bill was too much for the state to bear, he said.  ‘The biggest problem was money,’ Shumlin said … And he couldn’t promise lawmakers that they wouldn’t need to hike taxes again later to accommodate rising health care costs.  ‘I couldn’t with a straight face turn to them and say, no, we’ve got this figured out,’ he said.”

When it comes to a national Medicare for all system, the nonpartisan Committee for a Responsible Federal Budget (CRFB) finds that even a low-end cost estimate of $30 trillion over a decade “would mean increasing federal spending by about 60 percent (excluding interest)” and “require the equivalent of tripling payroll taxes or more than doubling all other taxes.” And the fact is, “[t]here’s no possible way to finance [Medicare for all] without big middle class tax increases,” Marc Goldwein of the CRFB explained to The Washington Post – a fact that even Sanders acknowledged recently.  And while some proponents try to push the argument that the increase in taxes would be offset by savings, “economists say that most taxpayers would pay more in taxes than they would save from having the federal government absorb the cost of health-care premiums,” The Washington Post reports.

Meanwhile, the Kaiser Family Foundation finds that 60 percent oppose Medicare for all when they learn it would require most Americans to pay higher taxes.  And Voter Vitals – a new quarterly tracking poll conducted nationwide and in 2020 battleground states – finds that a majority of Democratic voters are unwilling to pay any more in taxes for universal coverage while a supermajority of Democrats (69 percent) support building and improving on what we have today over new government insurance systems.



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