Single-payer cost nobody talks about

Whenever supporters of single payer are challenged about the workability of such a system, they invariably point to Medicare. Single-payer health care is really just “Medicare for All,” they say. But, most Medicare recipients require some form of supplemental insurance coverage. According to a Kaiser Family Health report released in April 2013, 88 percent of Medicare recipients had some form of supplemental insurance, either a privately purchased MediGap plan, an employer-based retiree plan, or through Medicaid. The average cost of a MediGap plan in 2010 was $183 per month ($2,196 per year).

To put this in perspective, if Green Mountain Care is truly an “everybody in” policy (excepting 107,000 Vermonters over 65 covered by Medicare), and we apply the Kaiser statistics for supplemental coverage, we’re looking at as much as a billion dollars in additional health care expense. Even taking into account a younger, healthier demographic needing less supplemental coverage, we still have to anticipate expenses at least in the tens of millions of dollars. So far, this very large tab appears to be off everyone’s radar.

Who will be expected to pay? Individuals? Businesses? Taxpayers?

Under the Medicare single-payer example, 14 percent of users receive supplements through Medicaid and 14 percent through Medicare Advantage. But, under Green Mountain Care, Medicaid will be part of the single-payer system, not a supplement to it, and there can be no Medicare Advantage-like program in a system with no private insurance market.

Twenty-five percent receive supplements through an employee retirement arrangement, but Green Mountain Care beneficiaries are not retired. So, despite the goal of severing the relationship between employment and health care, you can expect to see serious pressure on Vermont businesses to supply “wrap around” policies, particularly for employees experiencing a decrease in quality of coverage under Green Mountain Care. Unionized teachers come to mind here.

It’s impossible to know exactly what kind of supplemental policies Vermonters will need under Green Mountain Care or what they will ultimately cost because we don’t know exactly what Green Mountain Care will cover. This is a problem. Will dental and vision care be part of the package? Mental health? Long-term care? Travel outside of Vermont? We need answers to these questions, and the sooner we get them the better.

But there are some things we do know.

Dr. William Hsiao’s 2011 report to the Legislature specifically mentioned the need for “wrap around” policies. Gov. Shumlin and Anya Rader Wallack (then chair of the Green Mountain Care Board) said supplemental insurance policies would be allowed under Vermont’s single-payer system, so these policies are expected to be part of the landscape. Dr. Hsiao also warned that a comprehensive benefits package would be unaffordable for the state, hence his recommendation for a “basic” benefits package.

One thing 2013 taught us is that we can’t afford to be surprised by known but unsung aspects of grand health care reform plans. Individuals, employers and taxpayers have a right to know if, in addition to the billions of dollars in new taxes Green Mountain Care will cost, we will also need to plan for spending even more for supplemental health insurance policies. The only way to find out is to ask hard questions and demand clear answers.

How’s that for a New Year’s resolution?

Rob Roper, of Stowe, is president of the Ethan Allen Institute.