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Obamacare is radical? Vermont thinks even bigger, with single-payer plan.

Vermont plans to become the first state to adopt a single-payer health-care system. Its backers say it will cut costs and create jobs, but critics say the centralized control will drive away doctors.

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The Vermont program would cost between $8.2 billion and $9.5 billion a year by 2020, according to a report released in November by the Legislative Joint Fiscal Office and the state Dept. of Banking, Insurance, Securities, and Health Care Administration. That compares with the estimate for what the existing system would end up costing by 2020: $10 billion.

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State health-care spending currently stands at $4.7 billion as of 2009, or about $7,460 per capita. That compares with about $7,681 per capita in health spending nationwide.

Backers, including Gov. Peter Shumlin and most Democrats, say single-payer care will hold down costs by changing the way doctors or hospitals are paid, and simplify the entire system of medical billing.

A report by William C. Hsiao, an economist at the Harvard School of Public Health who consulted for the Vermont Legislature, estimates it would create 3,800 jobs, result in annual savings of 25.3 percent, cut employer and household spending by $200 million, and boost the state's overall economic output by $100 million.

That’s little consolation to a growing number of skeptics like Jeff Wennberg, a former Republican mayor and state environmental commissioner who now runs a nonprofit group called Vermonters for Health Care Freedom. Mr. Wennberg argues that lawmakers have rushed through the legislation without considering the potential fallout, or even how to finance it.

“It’s a stem-to-stern, top-to-bottom takeover of the insurance market. They’re blowing up the entire system,” he says. “You want to set up a practice? The Green Mountain Care Board will control it, will control all compensation, whether you can work in town A or town B, the number of procedures you will be allowed to perform. It’s crazy.”

Many critics insist single-payer systems end up rationing care, letting government officials make medical decisions rather than doctors. They argue that Vermont’s existing shortage of physicians will be only worsened as payments to doctors are capped, and as the state’s aging population gets even older and needs even more care.

“We’ve married ourselves to the single-payer model without looking at other models that might be doing the same thing,” says Rutland dermatologist Dan McCauliffe, an outspoken critic. “There’s better ways of getting universal access. Universal access does not have to follow from single-payer.”

Many of the details are still being worked out, most importantly how it will be paid for. By January, the Shumlin administration is supposed to submit a financing plan to the legislature. Last week a top administration official quashed a 14.2 percent payroll tax proposed by the Hsaio report, and said it was unlikely a plan would be ready by the deadline.

In an interview, Governor Shumlin says a mix of payroll taxes and other revenues, including federal, will help fund the system, which he wants in place even earlier— by 2016.

“You will be eligible for the Green Mountain health-care system by virtue of your residency, no mandate needed,” he says. “Your health care will be paid for by all, by a publicly funded system.


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