Lessons From Vermont: What the State’s Successes and Setbacks Should Teach Us About Single-Payer

by Michael Arria, Truthout | News Analysis –

In 2011, Peter Shumlin, the former Democratic governor of Vermont, signed Act 48 into law and the state became the first to enact universal health care.

Act 48 wasn’t just a historic victory, it was a blueprint for successful organizing and effective politics. Activists developed a plan of action years before applying pressure on lawmakers, mobilizing the grassroots support needed to win. “A lot of big, mainstream groups were advocating incremental steps, while not addressing the roots of the problem,” James Haslam, the director of Vermont Workers’ Center told Truthout in 2014. “We made a conscious decision to respectfully walk away from that process and do it on our own.” Third-party efforts are often maligned by liberals for “spoiling” the chances of Democrats, but the reality in Vermont was much different. The state’s Progressive Party was instrumental in the single-payer fight, using its leverage to pressure Shumlin on the issue while he was running for office.

Six years later, Vermont still doesn’t have universal health care. The plan was effectively abandoned in 2014 and now the state has a Republican governor. Vermont’s failure to implement the policy is now cited by some as proof that the single-payer system is virtually unobtainable. The prevailing narrative is that the plan was simply too expensive to implement, with Shumlin himself declaring the taxpayer burden would be too high when he went back on his campaign promise. “The gains would almost surely be bigger than the losses,” admitted Paul Krugman, “but that’s not going to make the very hard politics go away.”

Exactly what were the hard politics of the Vermont fight? A closer look at the movement’s setbacks, and its current fight to finally implement Act 48, provides important lessons for other states that are now battling for single-payer.

What Really Happened in Vermont?

Peter Shumlin ran on single-payer and was presumably elected because of it, but when it came time to evaluate a plan, he didn’t actually assess a single-payer system. In an interview from 2015, Dr. Margaret Flowers explained the crucial differences between single-payer and what Vermont attempted to implement:

[Single-payer] has three kinds of main features, huge cost-saving features. One is very simplified administration. You have one plan, one set of benefits. Everybody’s in it. Makes it very simple to use. We have a hugely burdensome administrative system here in the United States. And that’s one of the prime reasons why we’re the most expensive.

They also use something called global operating budgets. So hospitals don’t have to have a whole floor of administrative staff trying to work out the billing. The hospital gets a check every month. And that’s how they pay for the things that they do. So that is also a much better way to manage your finances.

And then a third thing is bulk purchasing, being able to purchase the pharmaceuticals and medical devices and other things. You have — as a single system — you have a lot of negotiating power to get the best price for that.

So the Vermont system really had none of those. It was designed to be the closest to a universal health care system and to be, ultimately, a universal health care system for the state of Vermont. But they were not using a single payer.

Shumlin eventually declared that the state lacked the funding needed to put this plan into practice. This is why conservatives, and liberal skeptics like Krugman, have been able to frame Vermont’s failure as an economic one. “By admitting that single payer will make health care both more expensive and less efficient,” the Wall Street Journal explained, “[Shumlin] has shown other states what not to do.”

The actual economics tell a much different story. In 2015, the Vermont Workers’ Center, a grassroots organization that helped lead the fight for single-payer, released a financing program that was endorsed by 100 economists. The system of progressive taxation would have provided relief for low and middle-income people, while lifting Vermont’s cap on what its wealthiest citizens pay. Economist Gerald Friedman summed it up succinctly: “Peter Shumlin was scared of raising taxes on business and the rich.”

In this sense, Vermont serves as a cautionary tale for states like California, which recently passed a Senate bill aspiring to establish single-payer, only to have it shelved by the State Assembly. “The corporate interests aren’t any different in California,” Vermont Workers’ Center President Ellen Schwartz told Truthout. Schwartz said that California activists shouldn’t take politicians at their word and continue to apply pressure during every part of the process. The Republican State Leadership Committee, a major Koch brothers’ benefactor, invested heavily in Vermont during the 2014 elections. These efforts paid off, as Republicans gained a number of seats.

Schwartz explained that, while the media has declared Vermont’s single-payer push dead, health care advocates continue to organize in the state. Schwartz believes that the GOP’s recent efforts to destroy the Affordable Care Act (ACA) have actually created a new political space for Vermont’s single-payer activists. “The ACA never fulfilled the human right to health care,” said Schwartz. “Here in Vermont, we’ve spoken with many people who remained uninsured or underinsured…. That creates the space for those of us organizing for universal health care to propose a replacement that would actually enable people to access needed care and put people, rather than profits, at the center.”

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Reprinted with permission from Truthout