Gruber Contract Analyzes Only 2 of 6 Financial Conditions Required By Law to Launch Vermont Single-Payer System

Gruber Contract Analyzes Only 2 of 6 Financial Conditions Required By Law to Launch Vermont Single-Payer System

The well choreographed exercise in political theater orchestrated by the architects of the Affordable Care Act (Obamacare) to force feed a single-payer health care system on residents of Vermont hit a speed bump recently when Vermonters for Health Care Freedom revealed flaws in the scope of work in Jonathan Gruber’s contract with the state.

Gruber, the controversial MIT economics professor who bragged about the “stupidity” of American voters, is being paid $280,000 to assist the administration of Governor Peter Shumlin (D-VT) in preparing a report to be delivered to the state legislature on January 15, 2015. That report will analyze whether the plan to implement single-payer meets the six required financial conditions identified as necessary to be met prior to the implementation of the system.

Unfortunately for single-payer proponents, only two of these six conditions, called “Mullin triggers” after Republican State Senator Kevin Mullin, the legislator who pushed for their inclusion in the law, are addressed in the scope of work of Gruber’s July 2014 contract with the state of Vermont.

Breitbart News has asked Lawrence Miller, Vermont’s health care reform chief, if the state has a plan to address the other four required financial conditions with a contractor other than Professor Gruber but has yet to receive a response.

Section 1822 of Act 48, the 2011 state law designed to launch the Green Mountain Care single-payer system in Vermont, states that “Green Mountain Care shall be implemented 90 days following the last to occur of . . . [a] determination by the Green Mountain Care Board that each of the following [six] conditions will be met:

(A) Each Vermont resident covered by Green Mountain Care will receive benefits with an actuarial value of 80 percent or greater.
(B) When implemented, Green Mountain Care will not have a negative aggregate impact on Vermont’s economy.
(C) The financing for Green Mountain Care is sustainable.
(D) Administrative expenses will be reduced.
(E) Cost-containment efforts will result in a reduction in the rate of growth in Vermont’s per-capita health care spending.
(F) Health care professionals will be reimbursed at levels sufficient to allow Vermont to recruit and retain high-quality health care professionals.

“The Contractor and his subcontractor shall assist the state,” Gruber’s contract reads, “in analyzing the triggers set forth in Act 48 for future consideration by the Green Mountain Care Board: [1] When implemented, Green Mountain Care will not have a negative aggregate impact on Vermont’s economy. [2] The financing for Green Mountain Care is sustainable.”

Not addressed in the Gruber’s contract are these four triggers also required by law: (1) Each Vermont resident covered by Green Mountain Care will receive benefits with an actuarial value of 80 percent or greater. (2) Administrative expenses will be reduced. (3) Cost-containment efforts will result in a reduction in the rate of growth in Vermont’s per-capita health care spending. (4) Health care professionals will be reimbursed at levels sufficient to allow Vermont to recruit and retain high-quality health care professionals.

In an exclusive interview with Breitbart News, Vermont State Representative Mary Morrissey, a Republican, called on the state to cancel Gruber’s contract.

“I can’t imagine with the two triggers that he’s working on anything will be honestly reported in this report. There’s no honesty. There’s no transparency. There’s no following the language of the law,” Morrissey told Breitbart News.

The lack of the additional four triggers in his contract “should be reason to cancel the Gruber contact,” Morrissey said.

“The Republican caucus has called for the cancellation of the Gruber contract. I don’t see how he could possibly put an honest real time plan forward. We won’t get a financial plan I could actually feel was honest. Not much of anything has been straightforward in this going forward,” Morrissey added.

In its November 20 newsletter, Vermonters for Health Care Freedom noted that the single-payer system simply should not go forward, especially without answering these four “Mullin triggers” specified in the 2011 enabling legislation:

What happened to the evaluation of the ‘80% medical costs’ level plan?  Or any medical plan? Any single payer analysis of the overall cost and whether it will be affordable and not have a negative impact on the economy,  must, by definition,  include an analysis of the underlying medical plan that will be the basis of single payer.

What happened to Act 48’s assurances about reduced admin costs?  About cost containment resulting in reduced health care spending?  And perhaps most importantly, about single payer’s ability to attract and retain high quality providers so our health care won’t suffer?  Any response, Mr. Gruber? Governor Shumlin? Senator Ayer? Anyone? 

Vermont is one of the few states that have set up their own state-run health care exchanges to implement Obamacare. To date that state-run exchange, Vermont Health Connect, has not performed well.

“We’re already seeing an 8 to 10 percent increase in premiums in Vermont Health Connect,” Morrissey noted.

Act 48 instructs Vermont’s secretary of administration (currently Jeb Spaulding, one of the most well-connected members of the Shumlin administration) to request an Obamacare waiver from the Department of Health and Human services that will allow the state to shut down Vermont Health Connect, its health care exchange, but will simultaneously apply the premium insurance tax subsidies available under the exchange to single-payer Green Mountain Care system after it is implemented. 

Section 1822 (b) of the law states that “[a]s soon as allowed under federal law, the secretary of administration shall seek a waiver to allow the state to suspend operation of the Vermont health benefit exchange and to enable Vermont to receive the appropriate federal fund contribution in lieu of the federal premium tax credits, cost-sharing subsidies, and small business tax credits provided in the Affordable Care Act.”

Lacking that waiver, Green Mountain Care would not be economically viable.

But Jim Condon, a Democratic State Representative, says Governor Shumlin should not request the Obamacare waiver.

In March, Condon told Vermont Watchdog “[t]he deadlines for proposing financing have been missed two years in a row now, so to me that’s very disappointing. It’s becoming clearer and clearer that there is no financing plan.” 

“The Shumlin administration] wouldn’t be able to ask for [the Obamacare waiver] until the economic analysis is done, and we cannot do an economic analysis until we have a financing plan. So, right now I suppose it’s in limbo,” Condon added.

Vermont Health Connect, by many accounts, has been a disaster. The state website was shut down over the summer because it was unable to function properly. Restarted several weeks ago, it continues to perform poorly.

“My phone has been ringing off the hook,” Morrissey told Breitbart News.  “The people that are having premiums and deductibles going up are calling me.”

“This has been a failure from the day we passed the bill because we haven’t met too many benchmarks. They say it’s cost $70 some million so far, but it’s probably greater than $100 million on a system that doesn’t work.”

There’s also a real danger that under both Vermont Health Connect and Green Mountain Care there simply won’t be enough doctors in Vermont.  “We’ve lost quite a number of doctors in our hospital in Bennington who have gone to Maine,” Morrissey added.

Breitbart News asked Representative Morrissey how Professor Gruber’s report can be used as the launching pad for the single-payer system, given that it only addresses two of the six required financial conditions specified in the law.

“That seems to be the million dollar question,” Morrissey said. “We have not met many if any benchmarks that were put out in the law.”

“Dr. Hsiao, in his 2011 report that preceded the passage of the law, said that in order to float this boat economically we needed to have 1 million citizens enrolled in the health care system,” Morrissey noted. “Vermont has about 640,000 people. I don’t know how we’re going to tax our way to pay for this. We’re already a very tax burdened state on many levels,” she added.

At the end of the day,” Morrissey concluded, “we’re going to need $3 billion to $4 billion to support this single-payer thing.”

But the state, Morrissey said, is already running out of money. “In May we started the revenue shortfall,” she noted, and added Vermont’s precarious financial situation can only get worse under a single-payer system.

On Monday, Governor Shumlin called for a 2-cent increase in state property taxes to pay for a public school deficit.


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