June 11, 2011

Vermont Establishes Single Payer System

On May 26, 2011, Vermont Governor, Peter Shumlin, signed a bill that will establish a statewide publicly funded single-payer health care system.  The bill will create a “universal and unified health system” called “Green Mountain Care” and all of the state’s residents will be eligible for coverage.

The Governor issued a written statement announcing the signing of this historic health care reform bill.  According to Governor Shumlin, “This law recognizes an economic and fiscal imperative – that we must control the growth in health care costs that are putting families at economic risk and making it harder for small employers to do business.”

The law seeks to immediately control health care costs, create a Health Insurance Exchange and plan for implementation of a single payer system.  Vermont will set up a new health care board with the purpose of controlling the growth of health insurance premiums and health care provider payments.  Importantly, this board will have the power and authority to make these ambitious changes.  Governor Shumlin stated that “there is ample evidence that we can reduce cost growth without compromising health care quality, but it will take a new approach – we can’t simply cut provider fees.”  This new board is expected to be in place by October 2011 and its actions should play a major role in creating the system envisioned by Vermont lawmakers.

While this bill is a major step toward a single payer health care system, with substantial planning still on the horizon and many details yet to be worked out, there will be many difficult decisions and new developments in the State of Vermont in the coming years.  Even Governor Shumlin acknowledges that “people have legitimate questions about how a single payer will be financed and operated.”  Vermont’s answers to these questions will be closely watched by other states, providers, payers and virtually everyone who has an interest in health care.

This post was contributed by Kurt Bratten.