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McQuiston: Everybody Pays

If Governor Shumlin has his way, on January 1, 2017, Vermont will become the first state in the nation to have universal health coverage. But that’s not what he really wants.

Vermont doesn’t have to wait until 2017 to get universal health care; we already have it.

Governor Shumlin has abandoned, usually, the term single-payer, not because there’s some sort of stigma in his mind, but for practical reasons. There will be multiple payers no matter how the system is ultimately set up.

There is Medicare and Medicaid and large companies covered by ERISA. There are also federal employees living in Vermont.

So the accepted term now to describe Green Mountain Care is universal health care.

But in truth, Vermont already has had universal health care for quite some time - because all the hospitals in the state cannot refuse care regardless of health insurance status.

After accounting for all the public and employer-based insurance, the number of uninsured is about six percent of the population. A Vermont Department of Financial Regulation survey conducted in late 2012 found that 6.8 percent of Vermont residents were uninsured. Presumably that number is lower now, since we’re six months into Vermont Health Connect. But exact numbers are not expected until January 2015.

Vermont Health Connect – our version of Obamacare - was intended to take care of those uninsured people. It hasn’t exactly done that because of the hassle of signing up and because for some it’s still much cheaper to opt out and pay a penalty at tax time than pay the premiums. But even so, those people without health insurance will still be able to go to the hospital if they get hurt or sick.

They’d be charged for the service and a payment plan might be set up, but for the most part the actual cost of the care they’d receive would be less than what those with health insurance would be charged. And maybe they’ll never pay. The hospital compensates by cost-shifting. It’s an uneven system, of course, but in the end, the bills are paid by someone.

So while we already have de facto universal care, what we do not have, and what the governor really wants, is universal payment.

The key to Green Mountain Care working is that everyone needs to pay. Maybe not exactly the same amount and certainly not for the same level of service, but everyone needs to have some skin in the game.

As to how to finance universal care, well, my best guess, given how these things go politically, is that several different revenue streams will be tapped, including gross receipts on corporations and a payroll deduction for both employers and employees based on ability to pay.

Vermont funds public education with everything from property taxes, to the sales tax, to the lottery, to sales of cars to pay for it.

And just as in public education funding, some will pay disproportionally more. But if you’re one of those for whom health costs actually go down, my advice is to just look miserable and don’t say a word.

Tim McQuiston is editor of Vermont Business Magazine.
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