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Vermont takes advantage of a provision in the Affordable Care Act

Teresa Tanoos's picture
Vermont single payer system

Vermont has become the first state in the U.S. to approve a single payer health care system after the disastrous launch of the problem-plagued HealthCare.gov website and the GOP’s efforts to get rid of Obamacare.

Nevertheless, the White House administration persists in promoting the federal law known as Obamacare as if it were the best thing since sliced bread even though it came out of the oven only half-baked, if that.

For a brief time, the administration and private health insurance companies eventually toned down their rhetoric after initially attempting to minimize the disastrous launch of the Obamacare website as nothing more than a glitch. But that attempt backfired, as new problems erupted on a near daily basis.

Toning down the sis-boom-rah for HealthCare.gov made sense. After all, why direct Americans to shop for health plans at a website that doesn’t even work and still hasn’t been fully fixed?

But that’s exactly what Health and Human Services Secretary Kathleen Sebelius did Tuesday when, during a conference call, she urged elected officials to start directing their constituents to use HealthCare.gov to buy insurance.

She even told them “not to hesitate to recommend that people go to HealthCare.gov and get signed up,” while claiming that they “are definitely on track to have a significantly different user experience by the end of this month.”

Let’s hope so because the end of the month is just a few short days away.

While the problems with the Obamacare website may be improving, what went wrong with it – including the president’s broken promise that if you “like your health insurance, you can keep it, period” – continues to make news headlines that are overshadowing any progress at HealthCare.gov.

Combined with the five million Americans who’ve had their private health insurance coverage cancelled, not to mention another 100 million small business employees who are estimated to lose theirs too, there is one state that is stepping up to the plate and taking matters into its own hands.

That state is Vermont, which has opted to take advantage of a provision in the Affordable Care Act that allows states to implement their own single-payer health care system.

What is a single-payer health care system?

Single-payer refers to a type of financing system where one entity – such as a state run organization – serves as administrator, paying out all health care costs and collecting all health care fees.

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Right now, our nation’s current health care system is bogged down with literally tens of thousands of different health care organizations, ranging from billing agencies to HMOs and more. All of these different health organizations create an overwhelming volume of paperwork, including bills and other administrative forms to complete, all of which have different billing systems and different contacts that can be very confusing.

However, with a single-payer health care system, the hospitals and doctors and other health care providers only bill one entity (the administrator) for their services, which greatly reduces the amount of administrative waste while saving money that can be spent instead on those who can’t afford insurance and health care services.

Vermont is the first state in the U.S. to implement a single-payer health care system, which begs the question, “Why haven’t other states done the same thing?”

Thanks to President Obama, the new healthcare law allows for it, providing states with federal funds for an expansion of Medicaid. Those states choosing the expansion are also able to set up their own state exchanges which, for the most part, have not experienced the problems that have plagued the federal website at HealthCare.gov.

The provision in the federal law that provides funds to states for the expansion of Medicaid is what prompted the state of Vermont to move forward while also choosing to set up its own single payer system.

Vermont will have its single payer system up and running by the year 2017. The system will be funded through Medicaid and Medicare, as well as a small raise in taxes and federal money provided through the Affordable Care Act.

The state’s single-payer program will also effectively make all hospitals and other health providers in Vermont non-profit, meaning that the people of Vermont will no longer have to pay their own hospital bills, insurance premiums, deductibles and the like, all of which were designed to make a profit for insurers.

The single payer system is also expected to provide the state with an economic boost, as employees with company-sponsored health plans won’t have to be concerned with paying medical bills or a health insurance premium; thus, they can use the money saved to spend on other things to stimulate the economy.

According to Harvard health care economist Dr. William Hsaio, who has helped create health systems in seven different countries and was brought in by Vermont to make sure its single-payer program is set up correctly from the start, the state will end up saving 25 percent per capita in administrative costs and other expenses, compared with Vermont’s current health care system.

The health care system specialist also made it clear that keeping costs down is absolutely crucial to getting the best health care system possible.

Approximately 45,000 Americans die each year due to their inability to cover health treatments, but a single-payer system would ensure that everyone has access to healthcare.

In this regard, the Affordable Care Act provides a major benefit by helping to prevent deaths stemming from inaccessibility to healthcare, as well as providing federal funds to states for the expansion of Medicaid, which opens the door for states to set up their own single-payer health care system.

It will therefore be interesting to see if other states follow Vermont’s lead by setting up their own single-payer systems as provided for under the Affordable Care Act.

1. American Journal of Public Health, Health Insurance and Mortality in U.S. Adults, published December 2009.
2. Physicians for a National Health Program (PNHP), Single-Payer National Health Insurance



“Why haven’t other states done the same thing?” Possibly because doctors who don't like working for the government but would rather practice medicine for the benefit of their patients and their own personal profit will flee the state?
You think they prefer to work for insurance companies? That's the system we have now.
Good doctors and Good Enough Doctors working for the same rates - I think not. Hello Indian doctors via the new immigration bill. Practice your Hindi and South Asian accents.
My patients love their Asian and Indian doctors. They feel they are getting better care, they are being listened to and their doctors are proactive in ordering their preventive screenings. So far, so good!