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Could a Single-Payer Healthcare System Work in the U.S.? Vermont Could Lead the Way…

While 20 states are challenging the constitutionality of President Obama’s healthcare reform, the state of Vermont is going in a completelydifferent direction.  And by different, we mean completely different.  Vermont has engaged two of the biggest guns in healthcare economics, Harvard economist William Hsiao and MITeconomist Jonathan Gruber, to study how a single-payer healthcare system could work in Vermont.

Hsiao and Gruber have plenty of practical experience in designing healthcare systems. Hsiao was the architect of Taiwan’s single-payer healthcare system and Gruber worked on Massachusett’s near-universal healthcare system and the federal healthcare reform.

Governor-elect Shumlin and a Democratic state legislature are hoping that a single-payer healthcare system can help contain healthcare costs in the state which they feel are on the way to spiralling out of control. However, whether a single-payer healthcare system can work in one state out of fifty is a new question that Hsiao and Gruber will have to examine. As Stateline.org explains:

Till points out all the different entities that provide health insurance to Vermont patients. There are the state’s private insurers. There’s the state itself, through Medicaid and through its coverage of state employees. There’s the federal government, separately through Medicare and the Veterans Health Administration. There are some larger companies, such as IBM, that self-insure. And there are many people whose health insurance isn’t even based in Vermont. “At the hospital that I work for, we deal with 14 different insurers from New York,” says Till, who is a doctor.

Due to those complications, what Vermont is trying to do is, at its heart, a test of the power of state government. Can a state wrest total control of health insurance from the federal government and private companies?

The simple answer is that it can’t without federal permission. Companies that insure their own employees at their own expense are exempted from state health care regulation under the federal Employee Retirement Income Security Act, known as ERISA. Medicare and the VA, of course, fall under federal purview. The new federal health care law forbids states from receiving waivers from its provisions until 2017, although some senators are working to change that date to 2014, when the law’s most consequential provisions kick in.

If those efforts succeed, states would gain a lot more freedom to do what they please. For now, though, the definition of single-payer is in doubt, even among the people who are designing Vermont’s programs. “The last thing we want to do is create the perfect policy that can’t be implemented,” says Steven Kappel, a Vermont-based health care researcher who is part of the Hsiao-Gruber team.

In Vermont, single-payer health care in a single state

Hsiao and Gruber’s study on a single-payer healthcare reform isn’t due until next month, but we’re sure that Vermont is not going to be the only state anxious to hear what Hsiao and Gruber have to report.

Do you think a single-payer healthcare system could work in Vermont? Tell us about it!

Related posts:

  1. Healthcare Reform: Obama Administration Names Joel Ario to Oversee Health Insurance Exchange System
  2. Healthcare Reform: A Doctor's Perspective
  3. Healthcare Reform: Pre-existing Conditions and the Federal Health Insurance Pool
  4. Kaiser Family Foundation Poll on Healthcare Reform Out: Americans Divided, Confused About Healthcare Reform
  5. Don’t Look Now! British Start to Overhaul National Health

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