Universal Health Care For Young Vermonters Could Become The Next Big Reform Initiative

May 13, 2016

Hopes for single-payer health care in Vermont were sidelined at the end of 2014, but lawmakers haven’t given up on the concept of publicly-financed medical system. And a coming study could lay the groundwork for universal care for all Vermonters under the age of 27.

Money was tight in the state budget that lawmakers passed last week, and plenty of worthy initiatives failed to make the cut. So it’s noteworthy that legislators were willing to spend $100,000 in taxpayer money to study raising the age limits, and eligibility thresholds, for a children’s health care program known as Dr. Dynasaur.

“And if we could guarantee people who were up to 26, that they had health care coverage just for living in Vermont, I think that would be a pretty attractive enticement to people coming out of college,” House Speaker Shap Smith said last week.

Smith says the potential economic benefits of offering publicly-funded care to young adults merit the expenditure. The state money will draw down roughly an equal amount in federal funds for the approximately $200,000 study.

"If we could guarantee people [health care] who were up to 26 ... I think that would be a pretty attractive enticement to people coming out of college." - House Speaker Shap Smith

Dr. Dynasaur in its current form is available to income-eligible kids in Vermont up to age 19. The proposal to expand it would do away with those income limits, and extend benefits to all Vermonters age 26 and below. 

Stephanie Hainley is chief operating officer at White and Burke, a Burlington firm that offers commercial development services across the state. She’s also chairwoman of the board of Main Street Alliance, a business group that advocates for progressive policy reforms.

Hainley says the high cost of living in Vermont makes it a tough place to recruit talent.

“I’ve hemorrhaged friends to places like Portland, Oregon and Austin, Texas and Boston,” Hainley says.

But Hainley says the promise of high quality, publicly-financed health benefits could be a real draw for young professionals just out of college.

“That’s a huge offset to cost of living that isn’t available in other parts of the country,” she says. And with publicly financed care for children, Hainley says employers won’t have to pay for family plans that are the most expensive on offer from insurance companies. 

"Looking at yet another Medicaid expansion ... is difficult for us to accept when we can’t afford the Medicaid system that we have today." - Betsy Bishop, Vermont Chamber of Commerce executive director

There is a cost, however. And paying for an expanded Dr. Dynasaur would likely require a new payroll tax of around 1.5 percent. Betsy Bishop, executive director of the Vermont Chamber of Commerce, says that’s a nonstarter for many business owners she works with. 

Bishop also says that Dr. Dynasaur is a Medicaid program, and that Vermont already faces persistent Medicaid deficits.

“Looking at yet another Medicaid expansion with estimates that might look good is something that is difficult for us to accept when we can’t afford the Medicaid system that we have today,” Bishop says.

Peter Sterling, an advocate spearheading the push for expanding Dr. Dynasaur, says the biggest financial danger for Vermont companies is the rising cost of health care. 

“By 2025, the premiums alone for a platinum plan on Vermont’s health exchange will be over $41,000 – just the premiums,” Sterling says, citing projections from the Green Mountain Care Board.

Sterling says he thinks the study will show that businesses will save far more by avoiding high-cost family plans than they’ll lose in the payroll taxes needed to support the expansion.

Sterling says childless adults will probably be the biggest financial losers in the deal.

The study is due back before next year, so that lawmakers can begin considering it in the 2017 session.