MONTPELIER -- After two years of pressure to say how it was going to pay for its single-payer health care plan, Gov. Peter Shumlin's administration on Thursday released a new accounting of what Vermont's universal health care system might cost, but left for later how it would be paid for.
Reports released by the governor's office say Vermonters would have to pay $1.6 billion in new taxes to pay for their share of a single-payer system that can't be implemented until 2017. But that would be more than offset by the fact that most individual and employers would no longer be buying private health insurance, a savings of $1.9 billion, the report said.
Exactly what kinds of taxes would provide that $1.6 billion will be decided in a public discussion process whose details are to be announced next month, administration officials said.
A state law passed in 2011 with strong legislative support called for Vermont to move well beyond the federal health overhaul of 2010 to something closer to what Canada has in place: a universal health insurance system in which the government ensures everyone has coverage. Shumlin's administration estimates the total cost of universal health care to be $3.5 billion, with much of that being covered by federal contributions.
A group critical of the state's health care plans, Vermonters for Health Care Freedom, said the cost is simply too high.
"$1.6 billion is over two and one half times what Vermonters pay in income taxes, and nearly five times what the state collects in sales and use taxes," the group said.
One section of the law set a deadline of Jan. 15, 2013, for the administration to make a proposal for the legislature providing what the new system would cost and how it would be paid for.
At the time, it was thought the state might get a special federal waiver allowing it to start up its new system in 2014, but Congress has taken action a waiver. Under the federal Affordable Care Act, that means 2017 is the earliest Vermont could implement its system.
Administration officials have been saying for months there's no point in deciding how to pay for the universal system four years before it starts.
Robin Lunge, Shumlin's director of health care reform, and Vermont Department of Health Access Commissioner Mark Larson said the legislature won't be asked to endorse a financing plan this session.
"We need to gather broad input on financing. Publicly financed health coverage will make sense to most Vermonters, but we have to explain it and we need input on how best to spread the cost burden," they said in a statement.
While missing the Jan. 15 deadline for a financing plan appeared to violate the 2011 law, a key lawmaker said he had no objection.
Rep. Mike Fisher, D-Lincoln and chairman of the House Health Care Committee, said it would be premature to produce a financing plan now for a system that won't be up and running for four years.
The Vermont system would not be truly universal. The report estimated that some employers and individuals would fall outside of it, including those working for the federal government and covered by its health plans, as well as those who work for companies that are "self-insured," assuming the financial risks of their employees' health coverage.