Single-Payer Health Insurance Tanks in Vermont

The people who pushed Obamacare actually wanted single-payer health insurance, at least originally. Single-payer insurance means one policy, one plan run by the federal government for all. Think of it as Medicare for all, but with even more sweeping and comprehensive coverage than Medicare (which usually requires a secondary, back-up policy). Proponents of single-payer health insurance, such as (then House Speaker) Nancy Pelosi, called it “the public option.”

Why did the public “option” never pass? Two reasons. One, it would mean a complete, immediate and total takeover of all things medical by the federal government. Two, it would be way too expensive. While there are many politicians, including the current President, who likely have no problem with this, it forced Congress at that time to propose a compromise. That compromise was Obamacare, which hampered the already hampered and restricted marketplace for medicine and health insurance with still more  regulations and mandates.

If you believe that health care is a right — regardless of what this does to the rights of the doctors who provide it and the taxpayers who pay for it — then single-payer health insurance makes the most sense. If health care is a right you’re born with, then how can you argue against government simply covering you the minute you’re born (or the minute the President decides to declare you a U.S. citizen)?

Of course, I would argue that health care isn’t a right. If it were, then that means the doctors and hospitals who provide health care are morally and legally obliged to provide health care under any terms the government names. That’s slavery. It also means that patients have no right to determine, in a free marketplace, what they wish or do not wish to purchase in pursuit of their health. Instead, it’s all up to the government to decide what to fund, not fund and under what circumstances to fund it. If you don’t want government owning every house or car in the country, determining whom should purchase which house or car and when, then why in the world would we want this for health care?

The state of Vermont, where there is no opposition or need to compromise when it comes to laws like socialized medicine, provides a fascinating case study of what single-payer insurance would have looked like — or may yet look like, since our current health care “market” or system is progressively moving towards it. The reality? It tanked before it even took off.

If ever there were a state in the U.S. that would enact a single-payer health care system, it would be Vermont, the left-leaning, mostly rural, demographically homogeneous state that gave us U.S. presidential candidate and ardent single-payer advocate Howard “The Scream” Dean.

But that all blew up last week after Vermont Gov. Peter Shumlin announced that the state’s long-planned single-payer system is being abandoned. The reason: It just costs too much.

Calling his decision “the greatest disappointment in my political life,” the Democrat was honest about why he took his action. “It was clear to me that the taxes required to replace health-care premiums with a publicly financed plan that would best serve Vermont are, in a word, enormous,” Shumlin said.

Shumlin and his number crunchers ran the data and found that single-payer wouldn’t work even in his tiny, low-cost, picturesque state. They originally estimated that they would have to take in about $2.2 billion in revenues to fund the plan, called Green Mountain Care.

But when the numbers got crunched, that figure shot up to $2.6 billion in needed new revenues, according to Bruce Parker at the Heritage Foundation’s Daily Signal blog. Total cost for the program was put at $4.3 billion.

To pay for it all in a state of just 627,000 citizens would have required an 11.5% payroll tax on all businesses, plus an income tax reaching as high as 9.5% for individual taxpayers. The taxes required to fund Green Mountain Care would have bankrupted its residents and sent hundreds of businesses fleeing to other states. [Source: 12/19/14]

For decades, advocates of single-payer health insurance have been able to blame others for the failure to implement it. “Mean” Republicans or stubborn moderates are the reason we don’t have single-payer insurance, according to the prevailing narrative. Even Obamacare, while it mandates unprecedented control over health insurance decisions by doctors and patients, represents something of a compromise, from the point of view of single-payer advocates. Under single-payer, there’s no real red tape. Government simply mandates and commands, and you live with it (or die with it, if necessary).

Yet Vermont tells a different story from the utopian narrative of single-payer health insurance, from the financing issue alone. And given the obviously unsustianable level of debt and deficits now faced by the federal government — mostly caused by entitlement programs we already have — don’t think that more taxes and debt will solve the problem, either. If unlimited and infinite debt spending could solve such problems, we could all quit working and producing tomorrow and simply live off the always rising federal debt “limit.”

The problem with single-payer insurance is — in a more obvious way — the same problem with the Obamacare pseudo-marketplace monstrosity we have recently created. It means using government edicts, manipulations and machinations to force people to act a certain way and to absolve them of the requirement to think, judge, assess and plan ahead in a marketplace. It’s exactly the wrong solution, and it’s completely at odds with the way we approach so many other things in society such as buying houses, cars, haircuts, smart phones and computers.

A private, unregulated marketplace (aside from the need to punish fraud) is considered a cruel and unthinkable alternative to government mandates and coercion. However, a free marketplace involves two things that government-run systems never permit: individual choices and rational decision-making.

In a marketplace, thousands or millions of people are selecting from available options offered by hundreds or thousands of suppliers at competing prices. This is true whether you’re talking groceries, smart phones, haircuts, computers or medical procedures. At the core, a real private marketplace — something we have never seen in medical care in the modern era, by the way —  involves choice and thought. Choice and thought — manifesting as self-determination and self-responsibility — are at the core of what make us human, and what describes humans at their moral best. For that reason, a free market for medicine is not only the most economic solution, but the most moral solution.

On the surface, Vermont’s short-lived attempt at single-payer insurance tanked because it’s fiscally impossible. But look a little deeper. The reason it’s fiscally impossible is because it’s morally unsustainable — even in a small, self-contained place like Vermont where the overwhelming majority appear to support socialized programs.

If single-payer insurance can’t work in Vermont, it can’t work anywhere. And it shouldn’t. True health care reform would consist of privatization and opening up of a free marketplace for medicine. Nobody has yet proposed an unhampered free market for medicine, but it’s our only solution.

Be sure to “friend” Dr. Hurd on Facebook. Search under “Michael  Hurd” (Rehoboth Beach DE). Get up-to-the-minute postings, recommended articles and links, and engage in back-and-forth discussion with Dr. Hurd on topics of interest. Also follow Dr. Hurd on Twitter at @MichaelJHurd1