New England seems to be the testing ground for health insurance reform. The Affordable Care Act, now often called Obamacare by its critics, was modeled on health-insurance mandates put into place in Massachusetts under the governorship of Mitt Romney, a Republican, who announced last week that he was formally seeking his party’s presidential nomination in 2012. Now Vermont has passed legislation moving the state toward a Canadian-style universal, single-payer health-insurance system, to be phased in alongside national health-care changes. The plan relies heavily on the prospect of waivers that will allow it to reallocate some federal Medicaid funds and on other sources of money that have not yet fully specified.
The new law calls for establishment of a five-member board to set reimbursement rates for health-care providers and streamline administration into a single, unified system called Green Mountain Care that will cover all Vermont residents. In the long run, it aims to replace fee-for-service payment with a system that will pay health-care providers a specific amount of money to care for a specific population, providing incentives for preventive care.
The basic outlines represent a left-wing alternative to the health-insurance changes being put in place under the Obama administration, with a stronger commitment to equitable public financing, a single insurance pool and less reliance on the market.
Why has Vermont moved into the vanguard? The possible explanations range from the structural to the personal.
Single-payer advocates organized effectively around a “health care is a human right” campaign. The Vermont Workers’ Center, affiliated with the national organization Jobs With Justice, played a vital role in building a robust political coalition in support of change.
The current Massachusetts health-insurance system, like that emerging on the national level, requires residents to buy health insurance and provides subsidies only to low-income families. As a result, it leaves many people vulnerable to increases in the cost of insurance and may also create political resentments among those with incomes just above the subsidy eligibility level, who are forced to buy insurance they can ill afford.
As Vermont moves forward with its plan, a fascinating standard of comparison should emerge. The Canadian single-payer system grew out of successful innovations in the province of Saskatchewan, which led other provinces to follow suit. Here in Massachusetts, many of us are looking hopefully over our shoulder at the Green Mountain State.
Nancy Folbre is an economics professor at the University of Massachusetts Amherst.
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