by J. Thomas
In December, Vermont Governor Peter Shumlin (D) shockingly announced a delay in implementation of one of his most public, long-term political promises: guaranteeing health insurance for all Vermonters under a universal, publicly funded system. Governor Shumlin ran on this platform for many years, including during his reelection in November so it was extremely disappointing to see this policy turnaround.
Four years ago, the legislature passed a historic bill calling on the governor to develop a financing mechanism for universal health care for Vermont.
The governor’s preliminary plan contained an 11.5 percent across-the-board payroll tax in addition to a graduated 9.5 percent income tax, with the highest rates beginning at 400 percent of the poverty line and capped at $27,500 per year. Another 4 percent payroll tax and a 50 percent graduated income tax increase would be required for transition costs over the first few years of the program, for a total of $2.6 billion in new revenue.
Effectively, Vermonters’ taxes would have been doubled. Furthermore, funding for the system would have to be front-loaded and offsets would be delayed because it takes years to see the cost benefits of better health.
Vermont is a part of a national movement to establish commonsense health care. America spends more money on health care as a percentage of its gross domestic product (GDP) than any other country in the world – rich or poor. A Harvard study estimated that 45,000 Americans die every year because they don’t have health insurance. A publicly-funded universal health care system in Vermont is estimated to save 25 percent of total health care costs over the course of the first decade. The financial estimates for the first five years are detailed in an article from the New England Journal of Medicine.