Vermont needs $2 billion in new taxes to fund single-payer health-care plan

— A recent report by Avalere Health, commissioned by Vermont Partners for Health Care Reform confirms an ominous projection prepared by Ethan Allen Institute of Vermont board member Wendy Wilton.

Both the report and Wilton report that the state will need roughly $2 billion in new taxes to support a single-payer health-care program.

Both Avalere and Wilton concluded that the Shumlin administration’s estimate of $1.6 billion is too low.

Wilton produced her initial projection in 2011 with updates in 2012 and 2013 as more information became available from the administration through various reports.

Wilton’s projection was done on her own time with information gleaned from the state’s reports and other health care reform sources. Her projection has been largely dismissed by supporters of Green Mountain Care, including Gov. Shumlin. However, the results of the Avalere report make Wilton’s projection more difficult to ignore given the similar conclusions.

Wilton agrees with Avalere that hoped for administrative savings in the conversion to a single payer plan are unlikely and planned reductions in reimbursement rates will have a deleterious effect on the health care system through severe cost pressure on providers, including physicians and hospitals.

Wilton also estimated that the federal subsidies will be lower than expected, putting more cost pressure on state taxpayers.

Wilton remains convinced that implementation of Green Mountain Care will also put the state’s financial health at severe risk.

“The Shumlin administration’s single-payer plan has significant and serious financial risks, likely outweighing benefits. Converting to a government health care system, funded by taxes, will double the size of state government in 2017. At this magnitude, errors or wishful thinking regarding projected costs or revenues could quickly wipe out Vermont’s fund balance. If the state’s balance sheet is deteriorated by adopting this proposal, the state will be unable to provide the basic services of government, such as roads, education and social services we do today and we may be borrowing to cure deficits. It seems like an awful lot of risk to solve a problem for about 4 percent of the Vermont population which is uninsured and not eligible for Medicaid. I would hope there might be other less costly and less disruptive options,” Wilton said in an EAI news release Nov. 18.

Wilton has served as treasurer of the City of Rutland since 2007, and was a candidate for state treasurer in 2012.

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