Vermont Nixes Single-Payer Plan Under O-Care To Avoid Crushing Tax Hikes

Vermont is abandoning its plan to establish a single-payer health care system under the Affordable Care Act, its governor announced Wednesday, a blow to reformers who hoped the state could set a national example.

Gov. Peter Shumlin (D) said that he was nixing the plan because it would require large tax increases to fund. The state had been working for years on a plan to institute a single-payer system in 2017, when Obamacare allows states to propose alternative reforms to extend health coverage and control costs.

“I am not going (to) undermine the hope of achieving critically important health care reforms for this state by pushing prematurely for single payer when it is not the right time for Vermont,” Shumlin said, according to the Associated Press.

His administration has recently concluded its analysis of what it would take to fund the government-run health care system, according to the AP. They found that it would require a 11.5-percent payroll tax increase for businesses as well as a new income tax of up to 9.5 percent.

A number of factors contributed to the dour financial outlook. Vermont has recently downgraded its revenue forecast by $75 million, and state officials estimated that the state would lose $150 million in Medicaid dollars under the plan while also receiving significantly less money from the federal government to help implement it.

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“The bottom line is that, as we completed the financing modeling in the last several days,” Shumlin said, “it became clear that the risk of economic shock is too high at this time to offer a plan I can responsibly support for passage in the legislature.”

The state was unable to find alternative models that would achieve the same goals, the governor said.

Some progressives, including Vermont Sen. Bernie Sanders, the only self-proclaimed socialist in Congress, had believed that a successful single-payer experiment in Vermont could be a model for the rest of the country.

“If Vermont can pass a strong single-payer system and show it works well, it will not only be enormously important to this state, it will be a model,” Sanders said in 2013. “If we do it and do it well, other states will get in line and follow us.”

But, for now, those hopes are on hold.

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