Proponents of the single-payer healthcare idea who tout the idea such a system will save money need only look at Vermont to see reality.
Vermont Governor Peter Shumlin, a single-payer advocate, threw the single-payer idea on the ash heap of history admitting what any sensible person knew from the onset:
- The plan would cost far more than estimated
- The plan would quickly become insolvent
- Massive tax increases would be required
- Coverage would decline for many
MainWire explains in Lessons for Maine in Vermont’s Failure.
Last Wednesday, Vermont Governor Peter Shumlin announced that he was abandoning his plan for a single-payer health care system for the state, finally admitting in an unexpected news conference that it is “not the right time.”
As one most liberal states in the nation, Vermont has faced years of internal pressure to adopt government-run health care. Shumlin made single-payer health care a major feature of his recent re-election campaign, and until last week, seemed to be blazing a trail towards the first single-payer system in the U.S.
His plan, which was designed partly by controversial Obamacare architect Jonathon Gruber, would have pushed for a single-payer – the state of Vermont – to pay health care costs, instead of private insurance companies. Nearly every Vermonter would have been required to be insured under “Green Mountain Care,” a state-run agency funded primarily through taxes rather than insurance premiums.
The cost for Green Mountain Care was estimated to be approximately $2.6 billion, an astounding $300 million more Vermont’s entire budget for FY 2015. The state would have needed an overwhelming 11.5% payroll tax on businesses and a new sliding-scale income tax of up to 9.5% just to get the program off the ground. Given that Vermont already boasts a top income tax rate of 8.95%, a 6% sales tax and 8.5% corporate income tax, these new taxes would have made Vermont the highest taxed state in America, by a significant amount.
Even with those new taxes, Shumlin’s administration predicted that Green Mountain Care would be drawing a deficit by at least 2020, meaning additional revenue or tax increases would be needed in the near future.
Supporters assert that despite the huge tax increases, a single-payer system is ideal and could actually save money. They maintain that a single-payer system would lower health care spending by way of decreased administrative costs, discounts for buying bulk insurance, and lower reimbursement rates for hospitals.
However, there’s plenty of evidence to suggest that none of the above would or could happen in America. Medicare and Medicaid (government insurers already in existence) do not have significantly lower administrative costs. Large insurance companies already buy in bulk and purchase more plans than entire countries that utilize the single-payer system. And while slashing reimbursement rates may sound good for taxpayers, it would also mean drastic pay cuts for hardworking doctors, nurses, receptionists, and technicians. No politician in their right mind would ever cut health care reimbursements, or at least not to the point where taxpayers would see any benefit.
Another major issue that Vermont encountered is the level of coverage to provide in a single-payer system. Instead of having consumers purchase health insurance based upon their needs or income, the single-payer model favored by Vermont forces everyone to pay for the same amount coverage, regardless of health care requirements. With all citizens reduced to a single coverage level, Vermont was faced with the catch-22 of choosing between a low or high coverage level, and deciding whether they wanted to decrease or increase coverage for many of their residents.
In the end, Vermont chose platinum level coverage for all, reasoning it wasn’t fair to force anyone to decrease the quality of their insurance plan. While this was a polite gesture, it was nonetheless an expensive compromise, and a definite factor in the plan’s eventual failure.
Proponents of “Medicare for All” Rally
In spite of the obvious ridiculousness of “Medicare for All”, Politico notes that proponents refuse to thrown in the towel.
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.
Gruber Poison
Shumlin’s plan was designed partly by Obamacare architect Jonathon Gruber. Thus, it’s no wonder the plan was overoptimistic in what it could achieve.
Gruber is an admitted liar who will stop at nothing to get universal healthcare. As I noted on November 11, Gruber stated “Stupidity of American Voter” Needed to Pass Obamacare.
For his lies and deceit, he was paid $400,000 by the Obama administration. Vermont also paid the liar.
From Politico ….
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.
Activists in California, Hawaii, New York, Illinois, Washington, Massachusetts, Ohio, Oregon and Pennsylvania still pursue their fantasy.
Vermont’s outcome is a “small speed bump,” said New York Assembly member Richard Gottfried, who’s been pushing single-payer bills for more than 20 years. Gottfried has been introducing his New York single-payer bill every year since 1992. The cause is “not for the faint of heart.”
Why Does Single-Payer “Work” in Europe?
Proponents of single-payer say countries in Europe proves the model works. But what does “work” mean?
The answer is enormous taxes, control of doctors’ salaries, control of nurses’ salaries, control of drug costs, etc., etc. In other words, government-run everything is why the model appears to work.
In the US, control of all of that is impossible, thankfully. When accurate assessments of tax hikes are imputed, no one wants to pay.
Single-payer advocates in the US don’t want any controls even though US citizens are the most obese in the world and the most resistant to “rationing”.
People expect the “free lunch” that liars like Gruber promise.
Live and Let Die
“Medicare for all” cannot and will not work in the US because the US is not willing to become France or Sweden. Meanwhile, government interference in the free markets has given the US the worst of possibilities.
The solution is not “medicare for all” with government controls over everything but to live-and-let-die.
Massive amounts of money in the US are wasted keeping people alive for another six months or less, in great pain. This holds true even for those without insurance.
Heck, it even holds true for the already dead!
Terri Schiavo Case
Let’s not forget the Terri Schiavo Case. By any practical measure, Terri Schiavo was dead. She had no functioning brain. Yet it took a 7 year battle for her husband to get the right to remove her feeding tube.
George Bush signed legislation to keep her alive. in 2003 Florida Governor Jed Bush signed “Terri’s Law” forcing the state to keep a dead woman breathing against the wishes of her husband.
Once someone is terminal, without proper insurance, nothing other than comfort drugs should be given. And in regards to drugs, the US has the highest prescription drug prices in the world because of import restrictions.
Obamacare will not let insurers charge more for smokers or obese. There are many healthcare cost items a free market could solve.
At what point do we say “you get food, comfort care, and pain relievers” but that’s it?
Instead, we suffer with the worst of both systems, unwilling to become France or Sweden for tax purposes, unwilling to ration health-care based on life expectancy, and willing to pay the highest costs in the world thanks to very poorly written legislation.
It’s time to scrap the whole damn thing and start all over.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com