When Vox profiled Vermont’s attempt to create a single-payer system this past April, Sarah Kliff noted that “about half of countries [that] attempt to build single-payer systems fail.” According to Politico, we can now add Vermont to that count: Governor Peter Shumlin’s attempt to create a single-payer-like system is dead. The culprit is the tax hikes that would be required to pay for the system:
The model called for businesses to take on a double-digit payroll tax, while individuals would face up to a 9.5 percent premium assessment. Big businesses, in particular, didn’t want to pay for Shumlin’s plan while maintaining their own employee health plans. […]“These are simply not tax rates that I can responsibly support or urge the Legislature to pass,” the governor said. “In my judgment, the potential economic disruption and risks would be too great to small businesses, working families and the state’s economy.”
This development will put a chill on the single-payer pivot for the foreseeable future: If it can’t be done in Vermont, it’s not likely to be done elsewhere (though New York will still try). Of course, the proposal could always get taken up again later in Vermont or elsewhere, but when it does, it will run up against the same problem: high costs. Instead of pursuing expensive and unsustainable top down reorganizations of health care, it would perhaps be better for states to bring down costs by picking the low-hanging fruit right in front of their faces.