Folbre Friedman

VT moves toward single-payer health insurance

Nancy Folbre

Nancy Folbre, UMass Amherst economics professor, writes in the Economix blog about how Vermont is bucking the national trend and creating a Canadian-style, single-payer health insurance system for its citizens. She notes that Gerald Friedman, economics, estimates Massachusetts could see savings of 17 percent in its health care costs under a similar system. (New York Times, 6/6/11)

June 6, 2011
Vermont’s Move Toward Single-Payer Health Insurance

My University of Massachusetts Amherst colleague Gerald Friedman, active in efforts to promote a single-payer system in this state, estimates that similar changes in Massachusetts could sharply reduce the cost of billing and processing insurance claims, generating savings of 17 percent. As he puts it, a universal single-payer approach is not just more affordable; in the long run, it may be the only affordable option.

The current Massachusetts health-insurance system, like that emerging on the national level, requires residents to buy health insurance and provides subsidies only to low-income families. As a result, it leaves many people vulnerable to increases in the cost of insurance and may also create political resentments among those with incomes just above the subsidy eligibility level, who are forced to buy insurance they can ill afford.

The system is not “wildly unpopular,” as some conservatives assert, but it’s not wildly popular either.

As Vermont moves forward with its plan, a fascinating standard of comparison should emerge. The Canadian single-payer system grew out of successful innovations in the province of Saskatchewan, which led other provinces to follow suit. Here in Massachusetts, many of us are looking hopefully over our shoulder at the Green Mountain State.