Vermont Psychiatrists Back State's Single-Payer Insurance Plan

The Vermont Psychiatric Association (VPA) is supporting legislation in its state to create a "single-payer" system covering all Vermonters for general medical and mental health and substance abuse services.

At press time, the legislation, which originated in the Vermont House of Representatives as "an act relating to a single-payer and unified health system" (H 202), had passed in the House and Senate. Gov. Peter Shumlin (D), who has championed the bill, has said he will sign it.

Credit: Kate McAllister, State Legislative Field Representative, APA

The proposal requires a federal waiver for the state to pursue its own alternative health reform proposal in place of the federal Patient Protection and Affordable Care Act (ACA), signed by President Obama last year. Three new organizations would be created to help control health care costs and increase health insurance coverage: a new Green Mountain Care Board to oversee cost-containment strategies, the Vermont Health Benefit Exchange as required under the ACA for helping to achieve universal insurance coverage, and the evolution by 2017 of the Health Benefit Exchange into Green Mountain Care as the state's single-payer plan.

In testimony before the state legislature in March, VPA President Alice Silverman, M.D., told lawmakers that members of the association support the effort.

"Every day our members witness the suffering of their patients and devastating consequences of the lack of access to psychiatric care as a result of aggressive insurance practices that unfairly limit and deliberately create obstacles to care," Silverman testified. "They have watched as a nonprofit insurance company, Blue Cross/Blue Shield of Vermont, ‘carved out’ the benefits for their most vulnerable and stigmatized patients to a for-profit, out-of-state managed care company called Magellan, whose primary fiduciary responsibility is to stockholders and not patients. They have watched their patients struggle to meet high copays and deductibles and forgo needed tests and treatment. And they have watched too many of their under- and uninsured patients suffer an unexpected illness and have to declare bankruptcy. And all this has occurred while the CEO of Vermont Blue Cross/Blue Shield retired with millions of dollars, as have other executives from insurance companies all over the country.

"Our members believe that a single-payer health care system that provides comprehensive care with full parity for the treatment of psychiatric [disorders including substance abuse] is the best way to accomplish this, and we commend the legislature and Gov. Shumlin for your hard work thus far," Silverman said.

Though the effort appears to enjoy wide public support, political jockeying around the measure is intense, and even before the House approved the legislation, the phrase "single payer" was stricken from the title of the bill.

A statement from Physicians for a National Health Program (PNHP), which has long advocated for a Canadian-style single-payer health care system, argued that the Vermont legislation was not a true single-payer system because it would preserve the private insurance market alongside any universal public system that might emerge.

"We appreciate the enthusiasm for progressive health reform shown by Gov. Shumlin and the many dedicated single-payer supporters in Vermont," PNHP said in a statement in April. "However, it is important to note that the bill passed by the Vermont House falls well short of the single-payer reform needed to resolve the health care crisis in that state.... Indeed, as the bill moved through the House, the term ‘single payer’ was entirely removed, and restrictions on the role of private insurers were loosened.... The Vermont plan promises a public program open to all residents of the state in 2017, but even then it would allow a continuing role for private insurance. This would negate many of the administrative savings that could be attained by a true single-payer program and opens the way for the continuation of multitiered care."

Vermont's proposal was designed by Harvard economist William Hsiao, Ph.D., the principal investigator of the team who developed the Resource-Based Relative Value Scale. Hsiao was commissioned by the legislature to conduct a detailed examination of the health care system in Vermont. Hsiao was involved with development of the new single-payer health care system in Taiwan that covers everyone and includes comprehensive benefits.

Hsiao was charged with developing three options for reform. These are the three options:

• A state government-administered and publicly financed single-payer health benefits system.

• A state government-administered, public option that would allow Vermonters to choose between public and private insurance coverage.

• A public/private single-payer system, which would provide an "essential" benefits package, would be administered by an independent board with diverse representation, and would employ a competitively selected third party to manage provider relations and claims adjudication and processing.

In a lengthy and detailed January 11 report to the legislature examining the advantages and disadvantages of each proposal, including political ramifications, Hsiao concluded that the third option—the public-private system—would be optimal.

"If Vermont implements the structure contemplated under Option 3, it will set in place a policy that controls the long-range escalation of health care costs, affords every Vermont resident coverage with an essential benefits package, creates jobs by allowing employers to better plan for the costs associated with their workers' coverage, attracts new workers to Vermont with better health care and higher wages, and, finally, creates a healthier and more productive citizenry," Hsiao stated in his report.

Information about the bill, H 202, and its current status can be accessed at <www.leg.state.vt.us/>. Hsiao's report is posted at <www.leg.state.vt.us/jfo/healthcare/FINAL%20VT%20Hsiao%20Written%20Statment%20for%20Jan1911_1.pdf>. The statement by PNHP is posted at <www.pnhp.org/news/2011/april/vermont-health-bill-mislabeled-single-payer-doctors-group>.