Dec 17, 5:50 PM EST

Governor abandons single-payer health care plan


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MONTPELIER, Vt. (AP) -- Calling it the biggest disappointment of his career, Gov. Peter Shumlin said Wednesday he was abandoning plans to make Vermont the first state in the country with a universal, publicly funded health care system.

Going forward with a project four years in the making would require tax increases too big for the state to absorb, Shumlin said. The measure had been the centerpiece of the Democratic governor's agenda and was watched and rooted for by single-payer health care supporters around the country.

"I am not going (to) undermine the hope of achieving critically important health care reforms for this state by pushing prematurely for single payer when it is not the right time for Vermont," Shumlin said to reporters and two boards advising him on health care changes.

Legislation Shumlin signed in 2011 put the state on a path to move beyond the federal Affordable Care Act by 2017 to a health care system more similar to that in neighboring Canada. Shumlin adopted the mantra that access to quality health care should be "a right and not a privilege."

The legislation called for the administration to produce a plan for financing the Green Mountain Care system by 2013 but it wasn't completed until the last several days. Shumlin said it showed the plan would require an 11.5 percent payroll tax on businesses and an income tax separate from the one the state already has of up to 9.5 percent.

Shumlin said small business owners would be hit with both, and he repeatedly expressed concern about whether those businesses, many of which now don't offer health insurance or offer much less costly insurance, could cover the new expense.

The governor said he had asked his health care team for alternative designs, but no one could come up with a plan to offer quality coverage at an affordable cost.

"The bottom line is that, as we completed the financing modeling in the last several days, it became clear that the risk of economic shock is too high at this time to offer a plan I can responsibly support for passage in the Legislature," the governor said.

He said that was especially true at a time when the state has not fully recovered from the recession and has seen recent revenue forecast downgrades of $75 million. In addition, Shumlin's health care team concluded the state would get $150 million less in federal help with the health care changes than anticipated earlier, and an additional $150 million less in Medicaid assistance.

The decision was welcomed by some members of a Business Advisory Council that Shumlin had appointed to provide feedback on proposed health changes.

"My health care costs would have gone up by 61 percent if that plan had gone through," said Win Smith, president and owner of the Sugarbush ski resort. "If there were that 9 percent (income tax) on employees, many would have been paying more than they're paying now. It would have been a lose-lose. So I'm not unhappy that that plan is not going forward."

A leading single-payer advocate, James Haslam of the Vermont Workers' Center, called the announcement "a slap in the face" to thousands of Vermonters who had supported the proposed changes.

Dr. Deb Richter, leader of Vermont Health Care for All and a member of Physicians for a National Health Plan, said single-payer advocates nationally were bound to be disappointed. But she added, "Vermont is still going to lead the way. We're just not going to get there as fast as we had hoped."

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