Authors: William C. Hsiao, Steven Kappel, Jonathan Gruber et al.
Published: February 17, 2011
Financed by: Vermont State Legislature
Legislation analyzed: Act 128

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We designed three options for health system reform in Vermont. The impacts above indicate that Option 3, the Public/Private Single Payer, would provide the greatest cost-savings to the state, savings that stem from the unique governance structure and management of the single payer entity. Unlike Option 2, which maintains the current multi-payer system, and Option 1, which creates a strictly government-administered program, Option 3 proposes a single payer structure overseen by an independent board with representatives from employers, patients, providers and responsible government agencies. Board members would be charged with establishing a budget for the single payer, recommending updates to the payment rates and benefit packages based. Option 3 further proposes that claims administration and provider relations be awarded through competitive bidding process.

Option 3 proposes to cover only the Standard Benefits Package. This benefit package was designed to provide at least as good coverage as the average Vermonter has now and to promote primary and preventive care. Unlike the Comprehensive Benefit package, however, it provides for limited coverage of vision and dental benefits. We recommend that when and if savings are realized in sufficient quantity, Vermont should consider expanding coverage for these benefits. Long-term care, however, is a more difficult issue that would require detailed and comprehensive study in its own right. International experience suggests that successful social models of long-term care insurance are constructed as separate programs from health benefits program, for example those of Germany and Japan, as long term care provision is so fundamentally different from medical services.