Universal Healthcare Would Slow VT Cost Growth

John Commins, November 3, 2011

Vermont's yet-to-be-defined leap into state-sponsored universal healthcare could cost as much as $9.5 billion by 2020, about double the $4.7 billion the state now spends on healthcare. That's roughly $14,000 for every person in the state.

But the state plan will still cost less than maintaining the current system of private plans, which could add an additional $550 million to $1.8 billion to the cost of healthcare in the state, according to new estimates released this week.

The 45-page report, Costs of Vermont's Health Care System Comparison of Baseline and Reform System, was mandated by Vermont lawmakers this spring after they passed Act 48, a universal healthcare bill. Lawmakers have until early 2013 to finalize the plan and figure out how to pay for it.

Whatever plan emerges will at best only slow the 7% annual increases in healthcare costs that are projected until 2020 under the status quo. Vermont, with an aging population and already aggressive coverage for the poor and under-insured, has seen some of the fastest growth in healthcare costs of any state in the nation. In 1992, healthcare represented 10% of the Vermont economy. In 2009, it represented nearly 19% of the state's economy.

"Achieving savings in healthcare spending is a difficult process. In this context, success is measured as reduction in the rate of growth—achieving absolute savings (spending less than in the prior year) is extremely unlikely," according to the report.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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