Today, Vermont Governor Peter Shumlin signed H.202 into law, which puts his state on a path toward creating the first single-payer health care system in the nation. H.202 was passed in Vermont with the strong support of both the House of Representatives (a 92-49 vote) and the Senate (a 21-9 vote). Importantly, the law ensures that the state will be in compliance with the basic coverage framework established by the Affordable Care Act (ACA) and then authorizes the state to build on this foundation in order to create a single-payer system, pending the necessary federal approval. It also creates a structure to help the state to address the issue of health care cost containment.

For those of you keeping score at home, the law has three major components:

  • — Vermont Health Benefit Exchange: The Exchange — established as a division within the Vermont Department of Health Access (the state Medicaid agency) — will facilitate purchase of affordable, qualified health plans in the individual and group markets and will meet all other requirements specified in the ACA for state Exchanges. Upon the implementation of Green Mountain Care (the name for the new single-payer system), the Vermont Health Benefit Exchange will cease operation.
  • — Green Mountain Care: Upon receipt of the necessary federal waivers and approval of a financing plan by the legislature, Green Mountain Care will be implemented to provide comprehensive, affordable, high-quality, and publicly financed health care coverage for all Vermont residents. Assuming that the necessary waivers are granted, the federal funding previously provided in the form of premium tax credits, cost-sharing subsidies, and small business tax credits under the ACA would be used to partially finance Green Mountain Care. The state will also seek to use Medicare, Medicaid, and CHIP funds as a financing mechanism.
  • — Green Mountain Care Board: A board will also be created to oversee the development and implementation of health care payment and delivery system reforms designed to control health care costs and maintain health care quality in Vermont. The board will have five members, nominated by a new Green Mountain Care Nominating Committee and appointed by the governor with the consent of the Senate.
The major policy question left to be resolved by the law is how Green Mountain Care will ultimately be financed. However, the law does set up a timeline for this to be resolved. In January 2013, financing plans for both the Exchange and Green Mountain Care must be submitted to the legislature for consideration. Another important question is whether — and when — Vermont will be able to obtain the various federal waivers it needs (including ACA, Medicaid, and Medicare waivers).

Vermont’s single-payer law demonstrates just how far the ACA’s coverage framework could take us in terms of reforming our health care system. While a single-payer system certainly isn’t required by the ACA, the law is potentially flexible enough to allow this as well as other approaches to increasing access, bending the cost curve, and improving quality of care.

For some additional commentary on the provisions of H.202, check out this post by our partners at the Vermont Campaign for Health Care Security Education Fund over at Say Ahhh and this interview conducted by Ezra Klein. For the latest updates on the single-payer effort in Vermont as implementation moves forward, check out the Vermont Public Interest Research Group’s campaign site.

—Patrick M. Tigue, Children’s Health Care Coordinator New England Alliance for Children’s Health