VT's single-payer system could cost $2.2B

Lawmakers in Vermont want to make the state the first in the union to have a single-payer healthcare system, but the estimated cost for the program could be as much as $2.2 billion, according to the Associated Press.

The state intends to implement the system later in this decade. But estimates for the program range dramatically. The administration of Gov. Pete Shumlin estimates the cost on the low end of $1.6 billion, while a study by Avalere Health suggests it would cost about a third more than that amount.

Yet another study by the University of Massachusetts suggested that the single-payer system, known as Green Mountain Care, could cost as much as $5.9 billion, although it attributes only $1.6 billion to costs that would have to be borne by the state, according to the Brattleboro Reformer.

Green Mountain is set to launch in 2017, funded in part by a large business payroll tax. Many people in the healthcare sector will closely watch its implementation and long-term outcome. Shumlin began pursuing the single-payer option back in 2010 due to spikes in healthcare costs. His administration has said a single-payer system would cut healthcare costs, keep small businesses in the state and help the middle class.

In preparation for the transition to a single-payer system, Vermont launched the Green Mountain Care Board, which holds purview over payment reform in the state's insurance exchange, premium rate-setting and the authorization of hospital budgets.

There are also a variety of uncertainties regarding existing financing mechanisms and what role they would play with a single-payer system, such as the current provider tax, which provides the state $157 million a year in revenue.

"Where we have the most uncertainty is the implementation, start up and transition," Stephen Klein, chief fiscal officer with Vermont's Joint Fiscal Office, told the Associated Press. "Does this all just appear in 2017, or is it a multiyear transition?"

To learn more:
- read the Associated Press article
- here's the Brattleboro Reformer article

 

Suggested Articles

We take a look back at health insurers' financial performance, including soaring profits, in Q2.

Employment growth in the healthcare industry cooled off in July as the sector added fewer jobs than in June as COVID-19 continues to spread.

Employers are making adjustments to their health benefits in the wake of COVID-19, but workers may not take the time to consider these new options.