(by Mark McCutchan)
Vermont’s Governor Pete Shumlin signed into law H-202 last Wednesday, a bill that paves the path to a single payer health care system called Green Mountain Care. As Shumlin said at the signing:
We gather here today to launch the first single payer system in America, to do in Vermont what has taken too long — to have a health care system that is the best in the world, that treats health care as a right and not a privilege, where health care follows the individual not the employer.
Vermont’s health care plan is a large positive step forward for fixing America’s broken health care system. More on that later, but first some background on employer-based health insurance in America and health care reform success in another state – Massachusetts.
Employer-Based Health Insurance – A Short History
Insurance offered by employers in the early 20th century was limited to loss of wages due to disability. The link between employers and private health insurance was strengthened by three key government decisions in the 1940s and 1950s. First, during World War II wage and price controls and the lack of male workers at home created worker shortages. The War Labor Board ruled that wage and price controls did not apply to fringe benefits such as health insurance, leading many employers to offer it to entice additional workers. Second, in the late 1940s the National Labor Relations Board ruled that health insurance and other employee benefit plans were subject to collective bargaining. Third, in 1954 the Internal Revenue Service ruled that health insurance premiums paid by employers were exempt from income taxation.
Employer-based health care insurance worked fine when the employee cost after insurance was affordable, and unemployment was under 5% (as it was for most of the quarter-century after World War II). However, as discussed in an earlier Winning Progressive column, health care expenses have sky-rocketed to over 16% of our GDP (over $7,400/person), with corresponding increases in cost to the patient. Rising Medicare costs have motivated Democratic lawmakers to search for methods for “bending the cost curve” to keep coverage sustainable by rationalizing health care spending. Rising costs have also made Medicare a political target for Republicans, as 40 out of 47 of Republican senators and all but four Republic House members voted in favor of Paul Ryan’s “Path to Poverty” budget proposal that would abolish Medicare.
Economic “structural” changes, technology changes, efficiency improvements, job off-shoring, and ruthless corporate job-cutting have raised unemployment rates and weakened the employee-employer relationship to the stage that Americans can no longer depend on their employment status for their health insurance.
Happy Fifth Birthday, “Romneycare”!
In 2006, Massachusetts became the first state in the nation to enact a comprehensive health care insurance reform law, which the state’s overwhelmingly Democratic legislature passed and then-governor Mitt Romney signed into law. It mandates that nearly every resident of Massachusetts obtain a minimum level of health care insurance coverage and provides free health insurance for residents earning less than 150% of the federal poverty level (which comes out to $33,000 for a family of 4) and subsidizes health care insurance for those earning up to 300% of the federal poverty level.
Now that “Romneycare” has reached its fifth birthday, it would be natural to ask, “How is it working for Massachusetts?”
The answer: “Romneycare” has been a success!
- The state has achieved its goal of providing near-universal (98%) coverage of all residents
- The percentage of employers offering insurance has increased
- Per capita payments for low-income enrollees rose an average of 5 percent a year over the first four years, well below recent 7 percent annual increases in per capita health care spending in Massachusetts.
- The average premiums paid by individuals who purchase unsubsidized insurance have dropped substantially, 20 percent to 40 percent by some estimates
- Health care reform has not yet slowed the rise in health care costs, but bills have been submitted to the legislature that would enhance the state’s powers to reject premium increases, allow the state to limit what hospitals and other providers can be paid by insurers, and promote alternatives to costly fee-for-service medicine.
We progressives should thank Mitt Romney for all he has done for the citizens of Massachusetts, and for preparing the way for the Affordable Care Act of 2010. We can also thank the GOP for making their de facto 2012 platform so nonsensical that Multiple Choice Mitt is now waffling on whether he supports what the successful legislation he helped pass in Massachusetts and leading Republicans are pushing Mitt to disavow his greatest accomplishment.
Back to Vermont…
After Governor Shumlin signed H.202, he handed the pen to Dr. Deb Richter, an advocate who has lobbied for a single-payer system for 20 years. In her remarks, Richter noted that health care in Vermont will for the first time be considered a public good rather than a commodity to be sold. She also prepared us for the backlash that the legislation will face and why we should fight to protect it, noting:
“We’re going to hear all kinds of scare stories – that this is a thoughtless experiment or that this is too bold. I want to remind you that every other industrialized country does what we are trying to do. They do it for far less money, they live longer and they do it for far better care. So it’s time for Vermont to join the rest of the industrialized world.”
Health care costs have doubled in Vermont over the last decade to roughly $5 billion a year, taking a toll on small businesses and the middle class. The single payer system promises to reduce such costs while making all of the state’s 620,000 residents eligible for coverage. As part of an effort to rationalize health care spending, a five-member board appointed by the governor is to determine payment rates for doctors, what benefits to cover and other details.
But many decisions and a lot of organizational structure remain to be worked out — so that even under the best political circumstances, Vermont’s single-payer health care system may not be running until 2017. The GOP can put out many roadblocks along the way to try to derail progress, but it is the best interests of all Americans to cheer Vermont’s effort to implement a single payer system, which will:
* ensure universal coverage
* reduce health care system costs and waste
* decouple health insurance coverage from employment
*reduce the financial burden for companies that pay for employee health care insurance
Take action to support Vermont’s step toward single payer health insurance by:
* Write a letter to your local newspaper editor thanking Gov. Shumlin if you live in Vermont, or calling on your own elected officials to establish a single payer Medicare-for-all system in your state