Commentary

Maine taxpayers cannot afford the costs of universal health care

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Among the many harebrained schemes that will be considered in the Maine Legislature this year is one to establish universal health care, an idea that – in some form or another – has been rejected by lawmakers in Augusta year after year since the 120th Legislature (and perhaps longer – the state’s legislative website only provides information back to 2001).

This year, the bill appears as LD 52, “An Act To Provide an Affordable and Accessible Health Care System for All Residents of Maine” sponsored by Sen. Geoffrey Gratwick. In the 126th, 127th and 128th Legislatures, Sen. Gratwick sponsored or co-sponsored LDs 1385, 815, and 386, respectively, all of which were either vetoed, placed in Legislative Files (meaning the bill was dead) or reported out of committee as “Ought Not to Pass.”

LD 52 proposes to establish a health care trust that will have the authority to “determine essential health care benefits, to negotiate with providers, to reimburse providers for the costs of providing care at negotiated rates and to manage the financing mechanisms for the trust.” To pay for the cost of establishing the trust, the bill proposes to use “several funding sources….including payroll taxes, transaction taxes and available federal funding.”

All Maine people would be eligible to enroll, though the bill, a concept draft, says enrollment is voluntary.

The reality is that a universal health care system, whether it be through a single-payer scheme or by other means, is too costly a burden for the state to bear. Those who have tried have failed, and it would be no different in Maine.

In 2011, the Vermont Legislature enacted a law establishing universal health care in The Green Mountain State. The law required the state to submit a financial plan backing the proposal by 2013, however the state failed to meet its deadline. The plan was eventually scrapped once state officials, including longtime single-payer advocate and Democratic Gov. Peter Shumlin, realized the full price tag of the proposal.

Vermont’s single-payer system collapsed on itself because the state had no way of funding the proposal. The Boston Globe reported the plan “would nearly double the size of the state’s budget in the first year alone and require large tax increases for residents and businesses.” The estimated cost of implementation was $4.6 billion in 2017 and would have forced Vermont taxpayers to pick up a $2.6 billion tab. It would have also required an 11.5 percent payroll tax increase and an income tax hike of up to 9.5 percent. Even with these taxes in place, the system would have started running a deficit in excess of $100 million by 2021.

Colorado voters, who have supported Democratic candidates in the last three presidential elections, rejected a similar scheme at the ballot box in 2016, where 79 percent of Coloradans opposed the measure.

Colorado’s failed ballot initiative proposed 6.67 and 3.33 percent payroll tax hikes on employers and employees, respectively, and assessed a 10 percent tax on nonwage earnings, self-employment and social security benefits.

Payroll and income tax increases of this magnitude would cripple Maine’s small business economy and put taxpayers on the hook for potentially billions of dollars in future tax increases. There is no viable mechanism for Maine to fund a proposal that even partially resembles either of these failed, unworkable models.

Rather than government run health care systems that balloon state budgets and burden taxpayers and business owners, Maine should look to develop and expand free-market solutions that reduce costs and provide higher quality care.

The direct primary care (DPC) model, which reduces costs by abandoning the third-party fee-for-service insurance system, offers patients affordable care and greater access to their primary care physician. DPC patients pay a flat monthly fee for coverage of all primary care services and receive medications and vaccines at wholesale costs.

The model is proven to reduce preventable hospitalizations by providing quality preventative care and chronic illness management services. These services best fit the health care needs of Maine, a state where 41.5 percent of state health care expenditures go to hospital care.

Any funds spent to increase access to health care services in Maine should go toward the development of Maine’s direct primary care industry, which will be far more affordable for an individual than the collective costs the state and its taxpayers would incur as a result providing universal coverage.

About Jacob Posik

Jacob Posik, of Turner, is the director of communications at The Maine Heritage Policy Center and the editor of The Maine Wire. He can be reached at jposik@mainepolicy.org.

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