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The “State” of Health-Care Reform: Activists Push for Universal Primary Care in Vermont

Single-payer proponents in Vermont hope achieving universal primary care will be a step toward public health care for all.

(Image: Lauren Walker / Truthout)

When Vermont’s plan for a public, universal health-care system died in late 2014 it was a major blow to single-payer activists everywhere. Conservatives tap-danced on the proposal’s grave, and wrongly claimed that its death was proof that single-payer could never work. Progressives were put on the defensive, dealing with the pain of losing an extended, promising battle, plus an influx of even more misinformation about the economics of public health care.

The woeful state of health care in the United States, however, has kept the dream of joining the rest of the developed world in having universal public health care alive as an urgent priority for activists in Vermont and elsewhere. And so, advocates of health-care justice in Vermont, not inclined to disengage from the process, have advanced a new proposal: statewide “universal primary care.” The plan would offer primary care – including some mental health and substance abuse treatment – to every single Vermonter regardless of their ability to pay.

Supporters of this proposal know it falls well short of reforming the state’s entire $5 billion health insurance industry, but hope it offers a new path toward that goal. Advocates for the policy point to the history of Canada’s universal system, which is rooted in the Saskatchewan policy that made hospital care universal in 1947. Moreover, according to a recently published study commissioned by the Vermont Legislature, the plan would be affordable and cost-effective, ultimately saving the state money that is now wasted due to the woefully inefficient nature of private insurance.

Vermont’s continued reform efforts reflect an important trend in health-care reform; states are trying to succeed where the federal government has failed, in terms of paving a path toward universal coverage. As Truthout reported in October 2015, activists in Colorado recently put a single-payer plan on the ballot in 2016 via a statewide referendum. Other states, including New Mexico, New York, Maryland and Oregon, are also fighting for single-payer in a variety of ways. But most Washington, DC, politicians are toothless on this issue, lacking the political will to stand up to the powerful drug and insurance industries while also placing many logistical barriers in the way of statewide reform efforts. As a result, the battle for universal health care in the states is an important part of the much larger fight for social justice.

“Salvaging Something” From Failed Reform Efforts

When Vermont Gov. Peter Shumlin announced that he would no long pursue a major overhaul of his state’s system, “the single-payer movement sort of crashed and burned in Vermont,” said Dr. Deb Richter, a longtime local advocate of single-payer legislation, in an interview with Truthout.

Richter certainly had her fair share of skin in the game. Richter, according to Vermont journalist and policy analyst Hamilton Davis, “has been one of the leading proponents of single-payer health-care reform for two decades.” She was so committed to the issue that she toyed with the idea of running for lieutenant governor of Vermont in 2008 to push the issue forward, before deciding against it. In the 2010 gubernatorial campaign, she was among many doctors who endorsed Shumlin, saying he was “the only candidate who has shown unwavering support for a publicly financed universal health-care system in Vermont.” Her engagement didn’t skip a beat when Green Mountain Care hit the wall – she was testifying for other means to improve health care at the State House within two months of its demise.

“Despite the setback we felt there was something salvageable from this process. We could take just one sector of the health-care industry – instead of the whole thing – and make that universal,” Richter said. “This is the way single-payer became a reality in Canada.”

“We could take just one sector of the health-care industry – instead of the whole thing – and make that universal.”

Indeed, the Canadian health system – which covers everyone, costs thousands less per person and gets better health outcomes – emerged out of the actions of one province. Canadian law professor Elaine Bernard, the director of the Labor and Worklife Program at Harvard Law School, wrote about the origins of the health system in Canada and its Saskatchewan roots in the journal New Politics in 1992. “The general principles of the National Health System,” Bernard wrote, “came from the prairie province of Saskatchewan by Canada’s social democratic party and … the Cooperative Commonwealth Federation,” who in 1947 “introduced a province-wide public hospital insurance plan.”

In fact, conservative critics in Vermont who oppose single-payer have expressed fear that universal primary care is, in fact, a potential path to a government-run plan. “I think it’s single-payer lite,” John McClaughry, vice president of the Vermont-based free-market think tank the Ethan Allen Institute, told Truthout. He added that he sees Richter’s proposal as a stripped-down version of single-payer. “It goes after some of the low-hanging fruit,” he said. “I think … these kind of plans are unmanageable.”

While the Saskatchewan model started with universal hospital care, Richter said it “would make more sense to try to go for primary care in Vermont.” It is not as large of a sector as hospital care, which may help provide support from legislatures still scarred by the recent reform battle.

“Primary care is the most important sector of health care. It is the backbone of any health-care system, without which the system will fail patients,” Richter said during testimony in front of the Vermont Legislature, urging lawmakers to fund the study that would assess the cost of this plan. “It is the sector of care that all of us need whether we are sick or healthy.”

Richter and others spent much of 2015 engaging in this kind of advocacy. The Vermont House Committee on Health Care was compelled to act. The committee quietly allocated a line item for a $100,000 study on the issue, buried in H.481, which announced numerous initiatives, including information about a tax on sugared beverages. Off the heels of the dramatic battle over single-payer, legislators did not make a lot of noise about this appropriation.

Study Shows Plan to be Affordable, Plausible

The report was released in December 2015. Richter said she was “very encouraged” by its results. One piece of good news is that under the law “primary care” included both mental health and substance abuse treatment, which are crucial areas given the increasing amount of people in need of these kinds of treatments. Governor Shumlin devoted his State of the State speech in 2014 to address Vermont’s opiate problem. “That was a real positive to see that these would be included as part of primary care,” Richter said.

But, while Richter and others were excited that mental health and substance abuse treatment were covered at all, it is important to note that there are significant limits to what is covered. Under universal primary care, outpatient counseling and treatment is covered, but inpatient treatment and prescriptions are not. In fact, under universal primary case, prescriptions are not covered to people who do not have other forms of insurance.

Some will fall through the cracks when only one sector of health care is made universal, as opposed to the entire system.

This is an example of why more broad reform is ultimately needed. Many seeking treatments for substance abuse would need inpatient care for detoxification at a minimum. Many would also require medication, such as Suboxone, which would cost a patient more each month than many insurance plans. Now, Vermont does offer programs to insure low-income residents, and did benefit from Medicaid expansion under the Affordable Care Act. But, invariably some will fall through the cracks when only one sector of health care is made universal, as opposed to the entire system.

In addition to its partial coverage of mental health, the study revealed a promising financial incentive to pursue this deal. Under the status quo, the average cost for primary care per insured Vermonter is about $40 per month. Under the study, the entire state could have primary care – with no co-pays or “cost sharing” – for under $45 per person per month. So for an additional $4 per person the state would have everyone covered and benefit from all the savings associated from giving primary care to the uninsured, including a reduction in expensive hospitalizations and ER visits and increased preventative care.

This screenshot from Vermont Health Care for All displays these findings from the study commissioned by Vermont.

(Chart: Vermont Health Care for All)(Chart: Vermont Health Care for All)

These savings pale in comparison to the kind of savings single-payer would provide the state; when Harvard’s William Hsiao was commissioned to study the issue he concluded the state would save hundreds of millions of dollars if it switched to a single-payer plan. But to accomplish single-payer, legislators need to have the courage to raise taxes knowing that it ultimately saves the state and its residents money, which they often lack. “Politicians hate taxes, and that continues to be an obstacle,” Richter said. Green Mountain Care, according to Hsiao, required a payroll tax of 11 percent. Further, state officials projected a need for about $2 billion in initial financing, which scared off legislators, despite the overall savings the plan would have created.

The scale of the investment for primary care reform is much smaller. Universal primary care, the study concluded, can be financed for as low as $187 million in 2017 – about the same amount the state is considering financing for one new building at Fletcher Allen Hospital. These numbers may seem more inviting to nervous politicians who are up for re-election every two years.

“A Partial Measure”: Inching Toward Universal Care

The downsides to this plan are simple enough. To begin, the proposal is just in its infancy. No one expects the state legislature to take up the issue in the 2016 legislative session, an election year, where the state must deal with a budget shortfall for the ninth straight year.

Further, universal primary care is just one slice of health care, and even if it is passed and implemented – which would take years – Vermonters will be left vulnerable in many other ways. The study states as much. “Uninsured Vermonters would be covered under universal primary care, but would potentially remain uninsured for other services,” the report concludes.

“Access to primary care is extremely important, and something that many people in Vermont and across the country struggle to afford because of high deductibles or an inability to afford health insurance premiums,” said Megan Sheehan, co-director of the Vermont Workers’ Center. “At the same time, we recognize that this is a partial measure and does not address all needed care.”

If a primary doctor refers an otherwise uninsured patient to a specialist, for instance, they could be exposed to massive medical debt, said Sheehan, whose organization helped spearhead the fight for single-payer in 2008.

The sad reality is that the ACA does not come close to fixing the US health-care system.

But politicians and activists insist that staying active is important. “When Shumlin put single-payer off the table we had to accept that some more incremental improvements may be our most realistic path,” said State Rep. Chris Pearson, vice chair of the Health Committee and a member of the Progressive Party, in an interview with Truthout. “We will be discussing this idea and others in the coming session. Now is a time for exploration. We are not going to be content to accept the status quo.”

Another proposal, Pearson said, has been to commission a study that would expand Dr. Dinosaur, a plan that provides coverage to needy children, to cover everyone under 26. Richter argues such a plan would have the unintended consequence of taking “all of the healthy people out of the risk pool,” and therefore increase health insurance costs for Vermonters who are older than 26 but too young to receive Medicare. But many progressive-leaning legislators think it is worth considering.

“Given the incredible bars to reform at the federal level, we are left to investigate whether we can inch our way toward universal care,” State Rep. Tom Stevens, a Democrat, told Truthout. “We have high hopes for this evolutionary bill [on universal primary care], as we do for providing universal care for all children up to the age of 26 – an extension of our existing law that would save families in Vermont thousands of dollars every year.”

If Vermont insured everyone under 26, coupled with Medicare’s coverage of senior citizens, half of Vermont’s population would have access to guaranteed health insurance. But, unlike the proposal for universal primary care, there has not yet been a study into the specifics of expanding coverage to young people.

But overall, there is sincere hope that Vermont can still be an innovator in attempting to solve a health-care crisis, which has simply not been solved by federal reform.

“These studies are important to continuing the conversation about universal access to health care,” said Sue Minter, a Democrat running for governor of Vermont in 2016, in a statement to Truthout. “It is the rising health-care costs that are crushing Vermont families and businesses and addressing those costs will be my priority as governor.”

Why State Reforms Matter Across the Country

It is ironic, and a bit tragic, how much sleep, sweat and money has been spent trying to fix health care in Vermont and other states, when just a few years ago, the Democrats in Congress passed the Affordable Care Act (ACA). The ACA was presented as a measure that would make insurance affordable for everyone. Yet, more than 30 million Americans remain uninsured, costs continue to rise at an unsustainable rate, and the insurance and drug industries see increased profits as they spend millions in donations and lobbying. Even many Americans with insurance are exposed to bankruptcy and financial ruin; a 2014 Commonwealth Fund study revealed that 31.7 million Americans with health plans are underinsured.

In Washington, most prominent Democrats – including progressive icons like Sen. Elizabeth Warren – have publicly resisted endorsing Medicare for All. This resistance comes despite its widespread appeal to the public and the fact that it would save Americans billions. Instead, Democrats ignore the issue or spend their political capital defending the ACA, a deeply insufficient half measure that greatly benefited insurance companies, but has been sold by some liberals as some kind of grand solution – or “the greatest social achievement of our time,” as a hyperbolic Jonathan Chait called it in the New Republic.

The sad reality is, however, that the ACA does not come close to fixing the United States’ health-care system and never will. Not only does it leave 30 million people uninsured, but also it significantly expands the role of private insurers. Insurers like Aetna and WellPoint, contemptible companies that treat health care as just another commodity, are now doing better than ever as Americans are now forced to patronize them or face a tax penalty. While Republicans make the ridiculous claim that the ACA is some kind of government takeover, if anything, it has only further placed the health sector under the firm grip of insurers and drug companies, whose employees helped draft the ACA in 2009 and 2010.

Moreover, the ACA does not do enough to curb the growing costs of health care, which now account for about 17 percent of the country’s GDP, about twice as much as the average wealthy nations, many of which have better health outcomes, according to the World Health Organization. Currently, almost a third of all money spent on health care is administrative waste, which is one of the key reasons why single-payer health care would save the country billions in its first year, according to University of Massachusetts, Amherst economist Gerald Friedman.

Given these realities about the US health-care crisis, states have little choice but to try and act. But, as the Vermont case shows, it isn’t easy. Not only is Washington totally compromised by enemies of reform, but they also add, what Dr. Don McCanne of Physicians for a National Health Program described as “federal restrictions” that are “simply overwhelming and make single-payer impossible without major federal legislative action.”

Indeed, as Truthout has reported, uncertainties about the state innovation language in the ACA, as well as ERISA laws, are among the many obstacles that Washington places on states that attempt to fix their own health-care system. The ACA does allow state innovation waivers for states to create their own health system, as long as the plans meet the requirement of qualified ACA plans and do not increase costs. But since applications for waivers are not allowed until 2017 and the language is rather vague, there are uncertainties as to how the process will work.

Further, the Employee Retirement Income Security Act of 1974 (ERISA), which was enacted to encourage employers to sponsor benefit plans and minimize conflicts with existing state laws, has prompted some to worry if ERISA could dismantle some attempts at making reform using state innovation waivers. The UMass Law Review published an article in 2015 suggesting that ERISA laws be “waived, amended or repealed” to prevent them from suppressing state innovation efforts.

However, there is debate as to the extent to which these issues impede attempts to pass statewide single-payer plans. Hsiao told Truthout in 2010 that the ACA “left quite a bit of room for state innovations,” and Shumlin said he was not deterred by ERISA before his reform effort died in Vermont.

In any event, as the current efforts in Vermont, Colorado and elsewhere demonstrate, so long as Washington fails to fix a health-care system in which a lack of insurance is responsible for as many as 26,000 deaths annually, advocates of universal, public health care will continue to look to the states for potential solutions.

Whether or not they will succeed is uncertain. When Shumlin was asked if he was taking the Richter plan for universal primary care seriously, according to journalist Hamilton Davis, he said “absolutely.”

But this is a song we have heard before, and, to date, health-care justice, on the state and federal level, continues to remain just out of reach.

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