Study says health care for all at today’s cost possible

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(Host) According to a new report, Vermont could provide health coverage to everyone in the state, for about the same cost that’s being spent this year on health care, if a single payer system is implemented.

But the study says all Vermont businesses would have to pay a double digit payroll tax to help finance the new system.

VPR’s Bob Kinzel reports:

(Kinzel) The study was conducted by Dr. Kenneth Thorpe, who served as the chief health care consultant to lawmakers during the recent session.

Thorpe looked at a plan where state government would provide a common benefits policy, with a low deductible, to everyone except people enrolled in the federal Medicare program.

Thorpe concludes that it’s possible to provide coverage to all Vermonters without spending any additional money primarily by reducing health care paperwork.

(Thorpe) “It’s administratively more complicated than it needs to be and by simply simplifying the system for positions and for hospitals and for having just one health plan administer it, the administrative costs would go down by an amount more than would cost to provide coverage for people who don’t have it today.”

(Kinzel) Thorpe says the single payer system could be financed by imposing a 13% payroll tax. He thinks it would be fair for businesses to pay a 10% rate while employees would be responsible for the remaining 3 %. He says this new tax has its pros and cons.

(Thorpe) “I think there’d be substantial concern about the new payroll tax obligations that companies that don’t offer benefits today would face. Whether those companies would leave and certainly the ability to attract new businesses into the state potentially would be compromised. But on the other hand, employers that offer benefits today would be up spending less on health care, and to them that would be a very substantial benefit.”

(Kinzel) Chittenden senator Jim Leddy helped lead the effort to pass a health care reform bill at the Statehouse this spring.

Leddy says it’s clear that there needs to be a lot more study about the impact of a single payer system in Vermont.

(Leddy) “There are perceived benefits that we’d like to think are there in terms of lower administrative costs, simplicity in our health care system, but think that there might not be quite the number of benefits or the savings that you would normally expect or would hope to receive in terms of a single payer system.”

(Kinzel) Former House Speaker Walter Freed, who’s also a member of the special Health Care Commission, notes that health care costs are increasing three times as fast as wages.

He says this means that lawmakers will either have to boost the payroll tax or cut benefits in the future if they adopt a single payer system.

(Freed) “There would be the fear that somebody would tell you well, no you can’t have that operation for another 6 months because it’s not in the budget’ or you can’t get space or two or three hospitals get squeezed out, so there’s less beds available because that’s all we’re paying for so therefore you don’t have a place to go.”

(Kinzel) The Health Care Commission will make a formal recommendation about the adoption of a single payer system by the end of the year.

For Vermont Public Radio I’m Bob Kinzel in Montpelier.

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