Over 100 economists call on Vermont to move forward with universal health care

From the National Economic & Social Rights Initiative website.

Publication Date: February 26, 2015
Author: Healthcare Is a Human Right Campaign
Organization Title: NESRI and the Vermont Workers' Center

MONTPELIER, VT: A new health care financing plan and a letter signed by over 100 economists make the case for Vermont to establish what would be the first universal, publicly financed health care system in the United States. The plan and letter were delivered to lawmakers at the Vermont State House on Thursday by members of the Healthcare Is a Human Right Campaign.

The financing plan sets out a new, more equitable model for financing Vermont’s health care system that would expand access to care while lowering health care costs for low- and middle-income families. Adding to proposals released by Governor Peter Shumlin in December, the plan, which was published by the Vermont Workers’ Center and the National Economic and Social Rights Initiative (NESRI), provides data and models showing that Vermont could simultaneously guarantee health care access to all its residents, reign in the overall cost of health care, and finance the new health care system, Green Mountain Care, through progressive taxation.

The Healthcare Is a Human Right Campaign says that its financing plan not only shows that universal health care can be financed in Vermont, but that it can be financed far more equitably than the current market-based health care system.

“By moving from private, market-based insurance to public financing of universal care,” Anja Rudiger, NESRI, says, “we flip the way we pay for care: people contribute based on their ability, so that low- and middle-income people pay a smaller share of their income on health care than the wealthy – the opposite of the current system.”

Gerald Friedman, Professor of Economics at the University of Massachusetts Amherst, who advised the campaign, says, "Act 48 promised to establish in Vermont a system of universal health care that would improve the health of its people while shifting the financial burden from the poor and the sick to those able to pay. Building on the Governor’s Green Mountain Care report, the new Equitable Financing Plan shows how this promise can be realized so that Vermont can move forward to a fair and economically efficient health care system."

The financing plan was delivered to legislators along with an open letter from over 100 economists from across the country including Prof. Friedman as well as Dean Baker of the Center for Economic and Policy Research and Richard Wolff of The New School University, New York. Both the plan and the letter are responses to a sudden announcement in December by Governor Shumlin, who had long backed Green Mountain Care, that he would no longer recommend the legislature move forward with public financing.

“As economists,” the letter reads, “we understand that universal, publicly financed health care is not only economically feasible but highly preferable to a fragmented market-based insurance system. Health care is not a service that follows standard market rules; it should be provided as a public good.” The letter calls on Vermont lawmakers to “move forward with implementing a public financing plan for the universal health care system envisioned by state law.”

According to the plan, low- and middle-income families would pay much less in health care costs if Green Mountain Care was implemented. A family with an income of $50,000 per year, for example, would pay 40% less for health care costs on average under Green Mountain Care. The plan proposes taxing wealthier people’s unearned investment income in order to give a bigger break to low- and middle-income families. It also proposes implementing a graduated payroll tax that requires large employers and businesses with highly unequal salary structures to pay more than smaller and more wage-equitable businesses. The payroll tax takes into account the difference between the top 1% of wages and the bottom half of wages in each company, and lowers the tax rate for companies with more equitable wage structures.

Ellen Schwartz of the Healthcare Is a Human Right campaign says that the financing plan and letter make clear that the economics of universal health care are sound. “This plan shows that financing Green Mountain Care is not just doable, but hugely important for Vermont. It would finally guarantee access to health care for everyone in the state, and would also move us toward a much more equitable society in which we each support public systems according to our ability and each get what we need.”

The Healthcare Is a Human Right campaign is working with legislators to introduce a bill for public health care financing, building on the state’s law for universal healthcare, Act 48, which was passed in 2011 but did not include a financing plan.

Financing plan: http://www.nesri.org/resources/equitable-financing-plan-for-vermonts-universal-healthcare-system
Economists' letter: http://www.nesri.org/economists-support-universal-healthcare

Keith Brunner: keith@workerscenter.org, (802) 363-9615
Anja Rudiger: anja@nesri.org, (212) 253-1710 ext. 305 or 917-455-9544

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Senate Bill 631 (Health Care for ALL Oregon) Summary

Summary of SB 631

Purpose of the Act: The purpose of the Act is to ensure access to comprehensive, quality, patient-centered, affordable, and publicly funded health care for all Oregonians, to improve population health, and to control the cost of health care for the benefit of individuals, families, business, and society.

Who is covered: All persons residing or working in Oregon.

Covered services: Services that are medically necessary, and/or appropriate for the maintenance or rehabilitation of health or the prevention or diagnosis of health problems, excluding elective cosmetic surgery, and including: Primary and preventive care, including health education; Specialty care; Inpatient care; Outpatient care; Emergency care; Home health; Prescription drugs; Durable medical equipment; Mental health services; Substance abuse treatment; Dental services; Women's health services; Chiropractic, Acupuncture, and Naturopathic services; Ophthalmic services, as well as basic vision and vision correction; Diagnostic imaging, laboratory services, and other diagnostic and evaluation services; Inpatient and outpatient rehabilitative services; Emergency transportation; Language interpretation and translation services; Palliative and hospice care; Podiatry; Dialysis; and telemedicine as it becomes available and effective. In 2019, The Board shall submit a plan to the Legislative Assembly to include Long Term Care in the Plan. (The Board will determine which services will be covered under each of the above categories.)

The Plan will cover all services previously covered by Oregon Educators Benefit Board (OEBB), Public Employees Benefit Board (PEBB), Medicare, Medicaid and Medicare Advantage Plans unless strong medical evidence indicates such services should be discontinued.

Choice: Participants are free to choose any state licensed health care providers practicing within the scope of their licenses.

Affordability: No co-payments and deductibles. Providers must accept payments from the Plan as payments in full and may not bill participants for services covered by the Plan.

Financing the Plan: In lieu of premiums, co-payments, co-insurance, and deductibles, the Health Care for All Oregon Plan will be funded primarily by a progressive income tax and a progressive employer payroll tax, which will be collected by the Oregon Department of Revenue and deposited in the "Health Care for All Oregon Fund." The intent is that:  

• The revenue raised by the progressive income tax will be approximately equal to the total currently paid by Oregonians for co-payments, co-insurance, and deductibles, with no new income tax on those below about 150% to 200% of the poverty level. (details TBD)
•  The revenue raised by the employer payroll tax on public payrolls will be smaller than what is currently paid for employee health insurance. (details TBD)
•  The revenue raised by the employer payroll tax on private sector payrolls will be less than the average currently paid for employee health insurance by firms of similar size. (details TBD)

Following arrangements for necessary waivers, exemptions, and agreements, the Legislative Assembly shall enact legislation necessary to assure that all payments for health care services provided to participants from federal, state, county, and local government sources will be paid directly to the "Health Care for All Oregon Fund."  
Fund for displaced workers: The Board will provide in the budget funds for up to two years of training and extended unemployment benefits, if necessary, of workers displaced as a result of this Act for the first four years that the Plan is operational.

Health Care for All Oregon Fund: All money in the Fund shall be used only for payments to health care providers, administrative costs, approved "capital expenditures for major facilities and equipment, independent Ombudsman offices for both health care providers and Plan participants, training for workers displaced by the Plan, extended unemployment benefits to workers displaced by the Plan if needed, and incentives/training to ensure an adequate number of health care providers in Oregon.

Governance: The Plan will be governed by a Board of Directors of nine voting members, appointed by the Governor and confirmed by the Senate. Two of the appointed members shall be licensed health care providers, at least one of whom is other than an MD or DO, two shall have significant education and experience in public health, two shall have extensive demonstrated experience in health or
consumer advocacy, and one each shall be from labor and business. There shall be at least one board member from each of Oregon*s congressional districts.

Responsibilities of the Board: The Board is responsible for the development and implementation of the Plan and oversight of Plan management, including, but not limited to: Seeking all waivers, exemptions, and agreements from federal, state, and local government sources that are necessary to provide funding for the Plan; Determining policies and adopting administrative rules; Adopting a biennial budget; Determining the specific benefits package; Overseeing management of the HCAO Fund; Ensuring that health services reimbursed by the Plan are evidence-based and cost-effective; Ensuring access to quality health services; Emphasizing disease prevention and health promotion; Establishing a process to evaluate proposed capital expenditures for major facilities, equipment and services to ensure equitable distribution of facilities and services; Partnering with public health agencies to improve population health; Submitting the Plan budget to the Oregon Legislature; Ensuring that implementation of the Act is equitable for Plan participants, regardless of health status, age, disability, gender, employment or income; Reporting at least annually to the Legislature and the public on the performance of the Plan; Recommending needed amendments to this Act and related legislation; Establishing cost containment mechanisms; Ensuring that Oregon's health care workforce is sufficient in numbers and adequately trained to meet the increasing demands of health care expansion and transformation, possibly using funds to attract or train providers if necessary; Working with Oregon's congressional delegation to change federal legislation or policy to support Oregon's health care expansion and transformation.

Advisory Committees: The Board shall apportion the state into regions for advice and planning purposes with at least one such region in each congressional district. Each region will have a Regional Advisory Committees to solicit input, receive complaints, conduct public hearings, facilitate accountability, and assist the Board. Each region shall also have a Regional Planning Board to identify health care facility and service needs in order to achieve optimum population health and equitable distribution of health services throughout Oregon. The Regional Planning Boards will review both privately and publicly funded major capital projects, and may recommend capital expenditures by the Plan towards health care facilities or equipment.

Oregon Health Authority: The Oregon Health Authority shall implement and administer the Health Care for All Oregon Plan under the general direction, policies, and oversight of the Board. This Act repeals the Oregon Health Insurance Exchange, Oregon Medical Insurance Pool Board, Oregon Medical Insurance Pool, Office of Private Health Partnerships, Family Health Insurance Assistance Program, and the private health option under Health Care for All Oregon Children program when the Plan becomes operational.

Thank you Roberta Hall for this summary.

To follow the progress of this or any other bill, or to read the entire text, click here

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