Socialism in One State Doesn’t Pan Out

Some folks think Obamacare didn’t go far enough. They praised Vermont’s intention to introduce a single-payer health care system as the way to go. Unfortunately (for them), Vermont finally did the math and realized they couldn’t afford it.

In what he called the “biggest disappointment of his life so far” Governor Peter Shumlin announced Vermont was abandoning their planned single-payer health care. Despite a $45 million Federal grant and the active support of HHS, the Treasury and the White House, Vermont couldn’t make the numbers work. (Perhaps because of MIT’s Jonathan Gruber‘s help. Remember him? The one who thinks you’re so dumb?) But Shumlin was smart enough to wait until after the election to admit it.

With a pay roll tax of 11.5% and a worker contribution of up to 9.5% of earning, the burden would have sunk the state’s economy. Yes, you read that correctly: 20% of wages just for universal health care. Can you imagine being taxed 20% of your total wages on top of Vermont’s already high sales and personal and corporate income taxes?

By demonstrating that single payer makes health care both more expensive and less efficient, Vermont has done us a service. They’ve shown other states (and the nation) what not to do.

What will learn from their experience?