Vermont’s Single Payer Failure

Avik Roy:

Last week, Vermont Governor Peter Shumlin (D.) announced that he was pulling the plug on his four-year quest to impose single-payer, government-run health care on the residents of his state. “In my judgment,” said Shumlin at a press conference, “the potential economic disruption and risks would be too great to small businesses, working families, and the state’s economy.” The key reasons for Shumlin’s reversal are important to understand. They explain why the dream of single-payer health care in the U.S. is dead for the foreseeable future—but also why Obamacare will be difficult to repeal.

Leading left-wing economists worked on Vermont plan

Shumlin’s predecessor in Montpelier was a Republican, Jim Douglas. In 2009, Douglas announced that he would not be seeking a fifth two-year term; five Democrats joined the contest to replace him. Progressive activists demanded that each candidate promise to enact single-payer health care if nominated; all five complied. Shumlin got the nod, and assumed office in January 2011.

Shumlin got right to work. In Feburary 2011, a trio of health economists, including Harvard’s William Hsiao and MIT’s Jonathan Gruber, sent Vermont a203-page report describing the feasibility, and the alleged virtues, of single-payer in the state. Gruber signed a $400,000 contract to work with Vermont on the project.