Galbraith: Shumlin could have given Vermonters gold for the price of silver

Posted By Bruce Parker On January 2, 2015 @ 4:00 am

Photo courtesy of Peter Galbraith and the United States Holocaust Memorial Museum [1]

SILVER AND GOLD: Outgoing state Sen. Peter Galbraith, D-Windham, said Shumlin overlooked a health care plan that would have given Vermonters gold for the price of silver.

By Bruce Parker | Vermont Watchdog 

MONTPELIER, Vt. — An outgoing Vermont senator says the health care plan he formulated is the only one left standing after Gov. Peter Shumlin ditched his single-payer agenda in December.

Peter Galbraith, a two-term state senator and former U.S. ambassador, spent the past legislative session working to provide Vermonters with universal health care.

Despite his work and pragmatic approach, the Windham County Democrat was pushed aside as Shumlin endorsed a now-defunct dummy plan used largely to rally supporters in the lead-up to the election.

In an interview with Vermont Watchdog, Galbraith criticized Shumlin’s approach, saying the governor bypassed a workable, affordable health care plan to pursue a flawed proposal based on Act 48.

“The problem with the Shumlin proposal and the Act 48 approach is that it was coerced on the 60 percent of the population that already has health care that works for them, instead of focusing on the 7 percent who are uninsured and the 20 percent to 30 percent who are inadequately insured,” Galbraith said.

The demise of Shumlin’s proposal “makes the plan I put forward the only viable option to achieve the goal of universal coverage,” he said.

According to Galbraith, single-payer advocates frequently dismissed alternatives in their quest to back the Shumlin plan, which was dumped unceremoniously on Dec. 17 [2].

“The guys who were pushing this were so ideological. Even when there was already government provided health care for federal employees, military and Medicare recipients, they wanted to force those people into the system as well. In the case of Medicare and Tricare, these are single-payer systems,” he said.

Had Galbraith’s work been adopted, the plan would have provided Vermonters a Gold Plan at a fraction of the $2.6 billion associated with the Shumlin plan.

“What you would do is take the Silver Plan on the exchanges that get federal subsidies, and the state would build it up to a Gold Plan. It would actually provide subsidies to everybody who signed up,” Galbraith said. “The cost of providing people a Gold for the cost of a Silver, and having subsidies, would be about $350 million, which would be covered by a 2 percent payroll tax. That’s much less disruptive.”

Galbraith said he would start with Blue Cross Blue Shield’s Silver Plan because it’s the only one eligible for federal subsidies. Then, since that plan has a low actuarial value of just 70 percent — meaning patients pay 30 percent out-of-pocket when receiving care — Galbraith would add wrap-around coverage to create an 87 percent actuarial Gold Plan. The approach offers Vermonters gold for the price of silver.

As for the subsidies, Vermonters earning up 400 percent of the federal poverty level or less would receive federal money for the plan, covering most of the cost. The state would provide the remaining subsidies by enacting a 2.2 percent payroll tax and eliminating the pass-through of itemized federal deductions on the Vermont income tax.

That scenario, Galbraith said, provides universal coverage for anyone who wants it. Moreover, people who like their current insurance plans can keep them, since individual participation is optional.

“Everybody who likes their health care could keep it — seniors, federal employees, people on ERISA plans, people who otherwise like their health care,” Galbraith said.

“It would be a strong incentive for people to go to a single plan — like, say, the Blue Cross Blue Shield plan — because they would be getting a Gold for the price of a Silver plus subsidies. … That’s an alternative way to go, which to my mind makes much more sense.”

Galbraith said the plan works for businesses as well.

“Businesses might find this benefit to be cheaper than providing it on their own. And businesses that didn’t provide health care, their employees would be able to get health care without doing great harm to the business. A 2.2 percent tax is something almost every business can absorb.”

“It would get you as close as possible to having a single-payer system at a cost of about 11 percent of what the Shumlin proposal was. It does not force anybody to give up the health care they like, and it doesn’t impose any income tax — it doesn’t impose mandatory premiums.”

The now-defunct Shumlin plan called for an 11.5 percent payroll tax on employers and up to a 9.5 percent income tax for individuals.

Vermont Watchdog asked MIT professor Jonathan Gruber for his thoughts on the Galbraith Plan. Gruber said, “Sorry, no comment.”

Galbraith put forward his plan in May but withdrew it. However, with health care back at square one in Vermont, the senator’s work might see renewed interest in the upcoming legislative session.

A former U.S. ambassador to Croatia and an adviser to the Kurds in Iraq and Syria, Galbraith is leaving the Vermont Senate to seek solutions to the Syrian civil war. In light of Shumlin’s actions on health care, one wonders if the senator also had a mind to get out while he could, to find more dependable partners elsewhere.

Shumlin’s decision to abandon single-payer led to angry protests at the Capitol and was viewed by many as a betrayal of his supporters.

Deborah Richter, president of Vermont Health Care For All, told Vermont Watchdog after the election, “I think the governor will do as he promised and release a financing plan in January. … From what I understand he’s instructed his people to continue their work.”

She later told Vermont Watchdog she learned of the governor’s decision to dump single-payer just hours before his Dec. 17 news conference.

State lawmakers this month will get a chance to tell the governor how they feel about his leadership. Because Shumlin failed to win 50 percent of the vote in the election, lawmakers will appoint the next governor. They can appoint Shumlin, or they can appoint Republican Scott Milne or Libertarian Dan Feliciano, the other top vote-getters.

Milne told Vermont Watchdog he was “naïve enough” to believe Democrat and Progressive lawmakers would not simply vote the party line.

“They’re going to do what the Constitution requires, which is to vote for who they think is going to be the best governor for the people of Vermont for the next two years,” he said.

Feliciano said Shumlin needs to use his health care failure to change course and fix the economy.

“Hopefully he takes the opportunity to listen to the voters and focus-in on the key things that are driving the economy,” Feliciano said.

“He needs to home-in on things like property taxes, cutting spending and restoring businesses’ faith as a whole. If he comes in with a budget that’s equal to or greater than the existing budget, in my mind he’s damaged himself irrecoverably.”

Contact Bruce Parker at [email protected]


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URL to article: http://watchdog.org/189693/galbraith-gold-plan/

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[1] Image: http://watchdog.org/wp-content/blogs.dir/1/files/2014/12/galbraith-museum-credit.jpg

[2] dumped unceremoniously on Dec. 17: http://watchdog.org/188196/single-payer-dead/

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