Newsletter – July 6, 2012

Vermont Seeks ANOTHER $104 Million to Set Up Exchange

Advocates for government monopoly single payer health care repeatedly claim that the government can reduce system costs through “administrative efficiency” by centralizing the claims processing functions within a government bureaucracy. VHCF and other critics of this view ask for a single historical example of where a government bureaucracy charged with operating a monopoly proved to be anything short of an administrative monstrosity. It appears we now have one more example to bolster our case. The Department of Vermont Health Access issued a press release on July 3rd announcing that they have applied for another $104 million from the federal government to fund planning, technology and the start-up of the Vermont Health Benefits Exchange. They are in the process of exhausting their level 1 grant of $16 million, and while not directly related to the exchange, we note recent media reports of the expenditure of another $18 million to integrate Vermont provider databases, thus far without success.

If we take just the exchange funding, that’s $120 million expended or to be expended on staff, consultants and systems – not a penny to deliver actual health care services. By the way, $120 million works out to $2,553 per uninsured Vermonter.

The press release as published by VTDigger is here:


Governor Shumlin to Violate Act 48 Funding Plan Mandate? 

Little noticed at the very end of Peter Hirschfeld’s Rutland Herald report on the Supreme Court Ruling on the Affordable Care Act was the following:

“Jeff Wennberg, executive director of Vermonters for Health Care Freedom, said now that federal funding is secure and single payer remains on course, Shumlin owes it to Vermonters to tell them how he’s going to finance the publicly funded system.

“We once again call upon Governor Shumlin to release his budget and financing plan for Green Mountain Care before the fall elections,” Wennberg said.

Vermont’s single-payer statute doesn’t require the Shumlin administration to propose a financing plan until January 2013. But on Thursday, Shumlin raised new doubts about whether he’d meet that deadline.

Asked whether his administration would present a financing plan before the end of the 2013 legislative session, Shumlin said, “I don’t know yet.”

“The first challenge is to define a system that makes sense,” the governor said. “The minute we think we’ve got that figured out, we can easily figure out how to pay for it.””

Sec. 9 (a) of Act 48 states, “The secretary of administration or designee shall recommend two plans for sustainable financing to the house committees on health care and on ways and means and the senate committees on health and welfare and on finance no later than January 15, 2013.” The law requires delivery of the plan in January of 2013, but the Governor will not promise to present a plan before the end of the 2013 session.

Speculation is now growing that the Governor intends to ‘kick the financing (tax) plan’ down the road, not simply past the 2012 elections, but all the way past the 2014 elections. VHCF will follow this closely, as we believe it is already a violation of public trust to refuse to release the plan today, and clearly a violation of state law to wait past January next year.

Hirschfeld’s story is behind the Rutland Herald paywall, but our friends at Vermont for Single Payer copied the entire article onto their website. Here is the link to the story:


Surviving Socialized Medicine in the UK 

The Washington Times carried a commentary by a Brit who has bad – and good – things to say about the UK’s National Health Service. The bottom line: while some hospitals are patient-focused and very well run, overall the service is second-rate, bureaucratic and inefficient. As evidence of this he notes:

“ . . . 55 percent of senior doctors pay for insurance for private medical treatment rather than expose themselves to [the NHS’] tender cares.”

Of course, Vermont’s Green Mountain Care is modeled after the Canadian system, which does not allow the sale or purchase of alternative private health insurance (except for pets – we can’t make this stuff up).

The Washington Times commentary is here:


Single Payer Statistics Debunked

The American ran an excellent article explaining “The Healthcare Myths We Must Confront”. The myths are 1) healthcare prices have soared in the recent past, 2) the pre-ObamaCare system was ‘insurance’, 3) stopping insurance companies from charging based on pre-existing conditions is the one good part of ObamaCare, and 4) healthcare costs are very high in the United States compared to socialized countries.

The author does an excellent job of shredding many of the statistics often quoted by single payer advocates. For example: “U.S. life expectancy ranks 19th, well behind nations with socialized medicine.” The statistics include all causes of death, including violent crime and traffic fatalities, so drawing the conclusion that socialized medicine produces longer lives is disingenuous. For the record, when you remove violent crime and traffic fatalities from the statistics the U.S. ranks first in longevity. Also debunked is the often repeated claim of high infant mortality in the U.S.

Read this very informative article in The American, which is the online magazine of the American Enterprise Institute, here:


Vermont Leads Assumes too Much but will Spend Even More 

True North Reports’ Robert Maynard attended the announcement of the formation and funding by an out-of-state union of “Vermont Leads: Single Payer NOW!” and provides an interesting report on the justification and tactics of the group. Maynard found no evidence of dissention within the ranks of Vermont-based union supporters that has been widely speculated in the media. The entire effort is predicated on the assumption that vast sums of out of state money are being spent in Vermont to oppose single payer. At no point was any evidence of this provided, but Newsletter offers the editorial aside that we nonetheless wish it was the case. Maynard describes their tactics as follows:

“The essence of the strategy was to find emotional stories of people who are suffering with healthcare related issues and insist that single payer would solve the problem. Logic, reason and policy needs to be de-empathized in favor of emotionally riveting stories. The fact that some people are hurting and that there is a need for reform is not what is being disputed. The dispute is over the direction of reform.”

The True North Reports article is here: 


Exchange Economics Questioned in Massachusetts

The Columbia Journalism Review carried a story urging reporters to look carefully at the way health insurance exchanges are working in Massachusetts and beyond. The article explains that for the exchanges to succeed financially they need a healthy mix of subsidized and unsubsidized individual purchasers, but in Massachusetts, 82% of participants are subsidized. And of the 18% who are unsubsidized, over half of them are buying the cheapest plans, further challenging the exchange’s economics. To reduce the cost of the state-financed subsidies, heavily subsidized participants are being directed to the two lowest cost insurers in the exchange, which has led to restrictions on which doctors and hospitals are available to these low income participants.

In Vermont the situation is very different since all businesses with less than 51 employees and individuals are being forced to purchase through the exchange, with larger businesses facing the same mandate a few years later. And subsidies will be federally financed, so the state is actually seeking to enroll as many low income folks as possible to maximize the federal cash flowing to Vermont.

The implications for the Affordable Care Act’s finances are huge, as they are for Green Mountain Care if free federal money is jeopardized by a miscalculation of how the exchanges will operate in the real world.

The Columbia Journalism Review article is here:


Rasmussen: Voters Want Choice in Health Care Insurance

In Scott Rasmussen offers his best advice for health care reform that voters would actually support: Put consumers in charge. Rasmussen writes:

“Voters also want to reign in the government bureaucrats. Rather than letting the government define a one-size-fits-all insurance plan, 77 percent think individuals should have the right to choose between plans with a mix of higher deductibles and lower premiums or the reverse. Seventy-eight percent believe everyone should have the choice between more expensive plans that cover every medical procedure and lower cost plans that cover only major medical procedures.” 

Vermont’s single payer reform outlaws the private health insurance market and creates a government monopoly – precisely the opposite of what more than three-quarters of Americans want, according to Rasmussen. His full commentary is here: