Shumlin waves the white flag

The governor’s number-one public policy goal is no more.

At a news conference today, Governor Shumlin pulled single payer health care off the table, saying the numbers simply don’t add up. Instead, he promised a continued effort to improve access to, and lower the cost of, health care in Vermont.

“This is the greatest disappointment of my political life,” he said, and that nails it. Single payer was one of the foundations of his initial run for governor in 2010. His promise to push for single payer set him apart in a crowded Democratic field and helped overcome doubts about his liberal bona fides.  That promise kept the Progressive Party on the sidelines in 2012 and 2014.

And now, it’s not gonna happen.

Oh, he promised a continued fight for a fairer and more accessible system, starting with the 2015 legislative session. But single payer is out until further notice. When asked, “If not in 2017, when?” he only answered in generalities.

As for the timing of the announcement, only six weeks after the election, Shumlin claimed that his team had just finished working the numbers last Friday and confirmed the bad news on Monday.

The numbers were unacceptably bad. Morgan True of VTDigger had reported that the financing mechanism would be based on an 8% payroll tax and a consumer premium imposed on a sliding scale. But the way the numbers shook out, the actual payroll tax would have to be more like 11.5%, and the premiums would have to be higher than expected. The result could punish the economy and leave many Vermonters with higher health care costs.

He cited several factors that moved single payer out of reach. Federal subsidies were not going to be as generous as hoped. The sluggish economic recovery meant fewer dollars coming into the treasury. That had led to state cuts in Medicaid payments that reduced federal support.

Also, the administration had decided a three-year phase-in for small businesses that don’t currently provide insurance was necessary to cushion the shock of a payroll tax. That phase-in meant substantially lower payroll tax revenue for the first three years.

Shumlin was clearly sensitive to the concerns of the business community. That, and his woodshedding in the November election. He saw single payer as a huge gamble that he was unlikely to win, and now is not the time to stick his neck out.

He also acknowledged that the troubled rollout of Vermont Health Connect cost him credibility on building a new health care system. “We must show we can deliver,” he said. “Vermonters have reason to question us, given the troubles with Vermont Health Connect.”

He emphasized all the hard work that’s been done to create Vermont Health Connect, bend down the cost curve, and lay the groundwork for a better system. And he promised a continued, all-out effort to improve the system. But single payer was his signature deal, and now he’s had to forego it.

Even if the delay is relatively brief — say, two years — single payer is almost certainly unattainable during his tenure in office.  The failure of single payer will be a big part of his legacy, and will significantly hamstring his ability to win back liberal and Progressive voters who’ve been skeptical of him.

Fair or not, today’s announcement confirms that skepticism. Let’s accept that the numbers are honest and the timing was just the way things worked out. Even so, the optics are bad.

There are many liberals who never believed Shumlin was serious about single payer. They will see their cynicism as confirmed.

This retreat will also lend great comfort to the foes of health care reform. A determined Democratic governor, with all the resources he could want, spent three years researching single payer, only to conclude that it wouldn’t work. The revised cost estimate for single payer — $2.6 billion a year — is almost exactly what Wendy Wilton, then-Republican candidate for Treasurer, estimated two years ago.

And the abandonment of single payer strips the governor of his signature issue. Aside from Tropical Storm Irene, his administration has been marked by incremental gains on a number of issues and blocking tax hikes. There haven’t been any high-profile accomplishments — which is why one of Shumlin’s re-election ads focused on GMO labeling, an issue he didn’t support until the last minute. And why a recurring theme in other ads was Irene recovery, something that happened in his first term.

Now we can now look forward to more incremental gains and belt-tightening. His downsized proposals for the 2015 legislature on health care were purely incremental in nature. None will generate headlines or fuel a grassroots movement.

The governor’s gonna have to pull a rabbit out of a hat somewhere to restart his political career. And his biggest hat is now empty.


9 thoughts on “Shumlin waves the white flag

  1. Patricia Crocker

    Wendy Wilton’s cost estimate cost the tax payer $0. Liberals always want to spend other peoples’ money.

  2. Cynthia Browning

    If the Governor and his team only just figured this out now they were wearing ideological blinders. The weakness of previous studies that indicated that “single payer” was either economically or politically feasible depending on very favorable assumptions about cost savings, federal funding, health care costs, and so forth. As soon as any of those assumptions were made less rosy, the viability was questionable. As the only economist in the legislature, I endeavored to point this out to my colleagues repeatedly to little effect…. I am very glad that the Governor has now joined the reality party, but I cannot help but be bitter at the denial that led to the spending of so much time, money, and effort on a project that has not helped a single Vermonter. I hope that we can now focus on moderate, reliable, and sustainable reforms focused on immediate help for Vermonters. Rep. Cynthia Browning, Arlington

  3. Robert Maynard

    “This retreat will also lend great comfort to the foes of health care reform. A determined Democratic governor, with all the resources he could want, spent three years researching single payer, only to conclude that it wouldn’t work. The revised cost estimate for single payer — $2.6 billion a year — is almost exactly what Wendy Wilton, then-Republican candidate for Treasurer, estimated two years ago.”

    We have been there at least twice before and we still got to this current push for single payer. Community Rating and Guaranteed Issue was a compromise after then Governor Dean backed off from a single payer push for almost the exact same reasons. (The numbers did not add up) Catamountant Health was enacted as a compromise after then Governor Douglas vetoed a single payer apporach because the numbers did not add up. The financing part of the Hasio-Gruber plan was rejected and the Green Mountain Care Board was put in place to come up with better numbers. Then we paid the Universtiy of Massachussetts $400,000 to come up with better numbers. Finally, we entered into a contract with Gruber for $400,000 to come up with better numbers and now Shumlin is telling us that there are no better numbers.

    The “foes of health care reform” need to push a patient centered alternative and not just oppose Shumlincare, or go along with the incremental steps in the same direction that has gotten us in this mess to begin with. Vermonters want a reform of the system and conservatives/libertarians agree with them. We just think that the direction of the “reform” that we have been taking is part of the problem. It is like starting a fire and offering to throw gasoline on it to put it out.

    John, I know we are probably not going to agree on the direction that health care reform is taking, but we can agree that single payer will be back again if its foes do not offer a plausible alternative that does not inch us along the same path that leads to single payer. In terms of pure political strategy, we can look at the past and predict this.

    1. Cynthia Browning

      Thanks for the historical background, because I think it is a key factor. In my opinion, the only reason that Act 48 passed with a commitment to single payer was that the tax financing mechanism was left out. This was incredibly irresponsible and almost cruel: to promise Vermonters a benefit without acknowledging and gathering support for how to pay for it. Dr. Hsaio’s report had recommended taxes in it, but those were omitted from the bill. So, it seems that what single payer supporters learned from the past efforts was not that SP might not be the most effective and feasible way to improve conditions for Vermonters because support for the tax financing needed was not there, but that they could maintain support if they just didn’t deal with the financing upfront. However, as we see, sooner or later it must be dealt with if the promised benefits are to actually be delivered…. To my mind this irresponsibility led to delays in actually helping the uninsured and underinsured Vermonters with their very real problems as all administrative resources focused on plans for single payer. I hope that we can move forward with practical, reliable, and sustainable reforms to help Vermonters.
      Rep. Cynthia Browning, Arlington

  4. Sen. Joe Benning

    Now Robert, let’s not get too far ahead of ourselves. Let’s just briefly savor this precious moment in which John has just acknowledged that Wendy Wilton was right all along. [Enter the sound of a smug-supported deep breath and visualize a wry smile.] There now, didn’t that feel good?

    Okay John, your momentary lapse in judgment is over. Republican bashing may recommence in 5…4…3…2…….

    1. John S. Walters Post author

      Oh, c’mon, Senator Joe. I have a long track record of bashing anyone who deserves it. But you’ve gotta admit the VTGOP has been mired in a years-long struggle and has shot itself in the foot many times.

      And so has Shumlin. As a liberal, I want to see his agenda succeed, and that sometimes clouds my judgment; but also as a liberal, I’m upset when he falls short of the mark and I say so.

    2. Robert Maynard

      LOL! Yes Joe, savoring the moment feels good and I certainly am doing so. I hope we can get together later and discuss a patient centered alternative that moves away for the “government by bureaucratic decree” approach, which we have been following for decades.

      Sorry John, that is where we are going to disagree. We all want health care reform, but some of us beleive that we have been going in the wrong direction for decades and that is how we got into the mess we are in now. There is an old saying that: “the first thing you need to do when you have dug yourself into a hole is to stop digging.” Opposing Shumlincare is our attempt to stop digging. It is hard to offer a vialble alternative when you are outmanned politically and have all you can do just to slow down the digging.

  5. Cairn Cross

    I read the Hsaio report almost as soon as it came out, and wrote a piece for the now defunct Vermont Tiger in early February 2011 which was republished here: One could see from reading the report that single payer was dead on arrival. It should not have taken three plus more years to figure out. However remember that while Shumlin will bear the brunt of the public’s ire all Vermont legislators who aided and abetted him for the past several years either by doggedly waving the flag and not digging into the numbers themselves or simply by ducking and ignoring the issues should also bear the pain. Only those legislators who spoke up early, often and vociferously should get a free pass. As the Democrats start maneuvering to knock Shumlin off in a 2016 primary, they should remember that unless they were in vigorous opposition to single payer they deserve to be called out and cast out.


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