MONTPELIER, VT: A new health care financing plan and a letter signed by over 100 economists make the case for Vermont to establish what would be the first universal, publicly financed health care system in the United States. The plan and letter were delivered to lawmakers at the Vermont State House on Thursday by members of the Healthcare Is a Human Right Campaign.
The financing plan sets out a new, more equitable model for financing Vermont’s health care system that would expand access to care while lowering health care costs for low- and middle-income families. Adding to proposals released by Governor Peter Shumlin in December, the plan, which was published by the Vermont Workers’ Center and the National Economic and Social Rights Initiative (NESRI), provides data and models showing that Vermont could simultaneously guarantee health care access to all its residents, reign in the overall cost of health care, and finance the new health care system, Green Mountain Care, through progressive taxation.
The Healthcare Is a Human Right Campaign says that its financing plan not only shows that universal health care can be financed in Vermont, but that it can be financed far more equitably than the current market-based health care system.
“By moving from private, market-based insurance to public financing of universal care,” Anja Rudiger, NESRI, says, “we flip the way we pay for care: people contribute based on their ability, so that low- and middle-income people pay a smaller share of their income on health care than the wealthy – the opposite of the current system.”
Gerald Friedman, Professor of Economics at the University of Massachusetts Amherst, who advised the campaign, says, “Act 48 promised to establish in Vermont a system of universal health care that would improve the health of its people while shifting the financial burden from the poor and the sick to those able to pay. Building on the Governor’s Green Mountain Care report, the new Equitable Financing Plan shows how this promise can be realized so that Vermont can move forward to a fair and economically efficient health care system.”
The financing plan was delivered to legislators along with an open letter from over 100 economists from across the country including Prof. Friedman as well as Dean Baker of the Center for Economic and Policy Research and Richard Wolff of The New School University, New York. Both the plan and the letter are responses to a sudden announcement in December by Governor Shumlin, who had long backed Green Mountain Care, that he would no longer recommend the legislature move forward with public financing.
“As economists,” the letter reads, “we understand that universal, publicly financed health care is not only economically feasible but highly preferable to a fragmented market-based insurance system. Health care is not a service that follows standard market rules; it should be provided as a public good.” The letter calls on Vermont lawmakers to “move forward with implementing a public financing plan for the universal health care system envisioned by state law.”
According to the plan, low- and middle-income families would pay much less in health care costs if Green Mountain Care was implemented. A family with an income of $50,000 per year, for example, would pay 40% less for health care costs on average under Green Mountain Care. The plan proposes taxing wealthier people’s unearned investment income in order to give a bigger break to low- and middle-income families. It also proposes implementing a graduated payroll tax that requires large employers and businesses with highly unequal salary structures to pay more than smaller and more wage-equitable businesses. The payroll tax takes into account the difference between the top 1% of wages and the bottom half of wages in each company, and lowers the tax rate for companies with more equitable wage structures.
Ellen Schwartz of the Healthcare Is a Human Right campaign says that the financing plan and letter make clear that the economics of universal health care are sound. “This plan shows that financing Green Mountain Care is not just doable, but hugely important for Vermont. It would finally guarantee access to health care for everyone in the state, and would also move us toward a much more equitable society in which we each support public systems according to our ability and each get what we need.”
The Healthcare Is a Human Right campaign is working with legislators to introduce a bill for public health care financing, building on the state’s law for universal healthcare, Act 48, which was passed in 2011 but did not include a financing plan.