5-13-16 – A $400 million hidden healthcare tax

by Rob Roper

VPR ran a piece on the rising costs of health insurance in Vermont – BCBS and MVP are requesting 8% increases in premium prices – despite all the healthcare “reform” efforts that were supposed to get these costs under control. In this article, Green Mountain Care Board chairman, Al Gobeille, noted that, “Every year, about $400 million in private insurance premiums are used to prop up government-subsidized insurance programs that don’t cover the cost of care for patients covered by them.”

Think about that for a second. $400 million in private premiums are being used to subsidize government run healthcare programs. This is a tax. A really big tax

It’s just not called a tax, so politicians don’t have to take the heat for these massive rate increases. We all hate the greedy insurance companies, right? The politicians are just trying to make things better! It’s truly diabolical.

When politicians suggest a $500 million Carbon Tax that will make gasoline and home heating fuel – two pretty important things for daily life – more expensive Vermonters are ready to run every elected official out of town on a rail. Yet here we have a $400 million hidden tax that makes private healthcare premiums – also pretty important to daily life — unaffordable, and… meh.

VPR also quotes Chief of Healthcare Reform, Lawrence Miller, as saying we need to eliminate the “perverse incentives” that are driving up cost. This is true. So how about we start with the perverse incentive created by allowing politicians to levy a nearly half a billion dollar a year tax on people who are doing the right thing and purchasing health insurance and escaping all accountability for doing so. Let’s eliminate the $400 million cost shift “tax” on healthcare premiums and replace it with an actual tax on Vermonters, the revenue from which will be used to subsidize the healthcare of those who can’t or won’t pay for it themselves.

Who wants to bet that if this sort of transparent public healthcare funding policy were put into place, subject to an annual roll call vote just like the transportation fund or the education fund, if politicians wouldn’t be a little more active and creative in controlling costs.

Rob Roper is president of the Ethan Allen Institute 

{ 4 comments… read them below or add one }

Valerie Mullin May 13, 2016 at 5:03 pm

Politicians getting involved with healthcare = higher cost, higher deductibles & fewer people being able to afford health care. Currently just for my husband, my son and me, we pay $1,800. per month, add the 8% proposed increase, it will be just under $2,000. How many family’s can afford $2,000. per month just for heath insurance? It’s sad when Vermonter’s need to choose between health care insurance or saving for your son’s college education. Montpelier’s super majority say they are so concerned about college loans. $2,000 a month would go a long way toward him not having college loans.


Jim Bulmer May 13, 2016 at 10:06 pm

Higher costs??? I’m confused. As I clearly recall, our esteemed President Barry promised that his pet project, Obama Care would protect us from rising costs. Actually, I’m kidding beause Obama lied through his teeth. He knew full well that premiums had to rise, and this snake oil salesman conned the American people. Fool me one poo on you fool me twice poo on me.


Jim ackerman May 14, 2016 at 11:59 am

First off, I’d be willing to bet that if we could ever get any truth out of Shumlins mouth, we’d find that there are less “working families”!with health insurance now then prior to the inception of “health disconnect”.. Many self employed or small biz people I know have dropped their instance due to the out of control increases in cost.. 2nd. Why is health insurance in Vt so costly compared to other states?? Lack of competition due to the fact we only have 2 carriers that have a.monopoly on the industry. In other states with multiple carriers the rates are considerably lower..


Paul Hudson May 25, 2016 at 12:08 am

Hello All,
I agree that VT has bought the proverbial “pig in a poke”. It was done for the best of reasons: to be sure all Vermonters are insured and to save on healthcare costs. But remember Jonathon Gruber, the guru from MIT who put this all together for us? He was the “brain” who designed Obamacare and consider where that is today, and where it will be in the future.
I’m not sure what, if any, benefit is derived for VT citizens to have only two carriers, but I’m sure the deal for the vote may then have looked very sweet. It is not. Competition is the best deal for the buyer. A monopoly of two is only half as as a monopoly of one.
I am a retired VT State employee. I have the benefits the General Assembly enacted. They are fine, but my sons, also VT state employees, have a fairly tough time making it in our native state today. My wife & I left; the Boys didn’t. But neither of them feel they have a voice in Montpelier. Their representatives and senators listen politely and then go to the capitol and do just what they wish. Too bad that “We, the People are left out.”
Paul F. Hudson


Leave a Comment

Previous post:

Next post:

About Us

The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.

Latest News

VT Left Wing Media Bias Unmasks Itself

July 24, 2020 By Rob Roper Dave Gram was a long time reporter for the Associated Press, is currently the host of what’s billed on WDEV as a...

Using Guns for Self Defense – 3 Recent Examples

July 24, 2020 By John McClaughry  The Heritage Foundation’s Daily Signal last week published eleven news stories about citizens using a firearm to stop a crime. Here are...

FERC ruling on solar subsidies could help Vermont ratepayers

July 21, 2020 By John McClaughry Last Thursday, the Federal Energy Regulatory Commission finalized its updates to the Public Utility Regulatory Policies Act (PURPA), in what the majority...

The Moderate Left’s Stand for Free Speech

July 17, 2020 By David Flemming Harper’s Magazine, a long-running monthly magazine of literature, politics, culture, finance, and the arts, is hardly what you would call a ‘politically...

Trump’s Regulatory Bill of Rights

July 16, 2020 by John McClaughry “President Trump [last May] issued an executive order entitled  ‘Regulatory Relief to Support Economic Recovery.’ The executive order includes a regulatory bill...