IQ expert Jason Beans: Will other states follow Vermont’s lead in universal health care coverage?

Q: Legislators in Vermont have approved something call a “single payer” health care system? What is “single payer”? Is this something that other states might adopt?

A: Vermont Gov. Peter Shumlin has signed the legislation that will create provide universal health care coverage to all of its 620,000 residents through a single-payer system called Green Mountain Care.

This didn’t happen overnight. Vermont has been slowly building toward the single-payer system for the past decade and is the nation’s first state to adopt universal access to health care. This system may be new in the United States, but it’s really just the same old system that Canada and Europe have embraced.

In an ideal world, Vermont will pave the way for other states to follow suit and ultimately achieve a fairer, more efficient, less expensive health care system that’s socially just.

However, Vermont faces a number of hurdles. One such hurdle already has been addressed: Vermont added a last-minute provision that bars illegal immigrants from being covered under its state-run insurance program. So right now, the Green Mountain State must contend with four other major hurdles before the single-payer system moves from pipe dream to reality:

1. Establish a board to create a plan by Jan. 15, 2013.

2. Set up a new health care exchange. This is required by the new federal health care reform law.

3. Get a waiver under the federal health care reform law in 2017 to shut down the state’s health care exchange and adopt a single-payer plan.

4. Identify a reliable funding mechanism.

It’s complicated, and certainly not as straightforward as you’d think. However, if there’s any state that’s in a good position to adopt the single-payer system at this point in time, Vermont would be it.

Vermont is of the country’s healthiest states, according to the Kaiser Family Foundation. Plus, 90 percent of the state’s population already has health insurance. Furthermore, the state has more doctors per capita than the national average.

However, many of those physicians may no longer practice after the single-payer switch is made. According to the Vermont Physician Legislative Survey, about one in every four doctors will stop practicing if the single-payer system goes into full effect. Meanwhile, the biggest health insurance provider in the state — Blue Cross Blue Shield — supports it.

Proponents say the single-payer system will curb costs and boost quality in health care. One such proponent is Dr. William Hsiao, a Harvard economist who helped design health care systems in seven countries. Hsiao expects Vermont’s single-payer plan will be about 25 percent cheaper for consumers, businesses and the government than the current private health insurance system. That translates to $500 million in savings in the first year alone.

Opponents argue there’s no clear funding source, no control costs in place and no respect for federal authority. Also, wait times to be seen by a physician in a single-payer system can be staggering. Canadians report waiting a month to see medical specialists. In Saskatchewan, it can take up to 22 months to get an MRI.

Watching Vermont’s single-payer system take shape over the next few years will be interesting and even inspiring for other states. If Vermont can navigate the hurdles and pull off universal health care successfully, then the single-payer system could be adopted in other states.

Jason Beans is CEO of Chicago-based Rising Medical Solutions, a medical cost containment/care management company serving the workers’ compensation, group health, auto and liability markets. Beans founded Rising in 1999. Since then, Beans has received a number of honors, including Business Council Advisory Man of the Year and Midwest finalist for Ernst & Young Entrepreneur of the Year. Rising has appeared several times on the Private Company Index’s Top 10 Growth list and Inc. magazine’s Inc. 5000 list.

Beans earned a master’s degree from MIT’s Entrepreneurial Masters Program and a bachelor’s degree in finance from Boston College.

For more information, visit www.risingms.com.

If you have a health insurance question for Jason Beans, please send it to john.egan@insurancequotes.com.