The intent of Bill H.524 in the Vermont Legislature is to establish a universal single payer health care system for "all essential medical services". The specifics of these “services” will be determined at some future date by a committee of legislators.
Vermont’s twelve hospitals will be restricted to a binding "global budget” that they will not be allowed to exceed. Doctors, nurses, and other providers of health care will be compensated on a "reasonable" and "sufficient" basis regulated by the legislature. Any and all private health insurance for medical services will be abolished in Vermont. A new state agency will be created to manage all of Vermont’s health care needs at an annual cost of TWO BILLION DOLLARS to be funded by a “health care” payroll tax and an increase in the personal income tax.
If enacted, H.524 will have a disastrous impact on business owners in Brattleboro. If you are an employer [or a medical professional who does not want their income restricted by a state agency] and dread the thought of having the cost and quality of your health care controlled by a legislative committee in Montpelier, then consider the tax advantages of relocating your business or employment to New Hampshire. These are the reasons why.
(1). The State of Vermont can not impose a health care payroll tax on a New Hampshire company whose employees live in Brattleboro and work in NH. Furthermore, the Vt. Dept. of Taxes can not require a NH. employer to withhold Vermont health care income taxes on their New Hampshire employees who reside in Vt. These two simple facts negate the entire funding mechanism in Bill H.524.
(2). The State of Vermont has no legal jurisdiction over out-of-state insurance providers who pay claims in Vermont. A Vermont resident with New Hampshire employer provided health insurance can not be “mandated” into a state single payer system. Nor can the state of Vermont prohibit a physician from billing an out-of-state insurance provider for payment.
(3). Under Federal Employment tax laws (that supersede Vermont income tax laws) an employee’s taxable income can be structured in a defined benefits plan. Any additional health care income tax the employee is “mandated” to pay as a Vermont resident can be offset with a corresponding reduction in their Vt. income tax. This will allow the New Hampshire employee living in Vermont to rob Peter (by paying less Vt. income tax) to pay Paul (the new health care tax).
(4). When a Vermont resident relocates their business to New Hampshire, the cost to move their business out-of-state is deductible on their Vt. income tax return. (I kid you not!) This screw-up in Vt. tax law was made several years ago by the very same legislators who wrote the proposed health care reform Bill H.524.
(5). New Hampshire is more business friendly than Vermont. NH. has no personal income tax and no sales tax. New Hampshire unemployment taxes are lower than in Vermont. The NH. business enterprise tax (BET) is substantially less than Vermont’s tax on business profits. Workman’s compensation expenses are lower in NH. And most importantly, health insurance premiums are substantially less in NH. because unlike Vermont, New Hampshire allows insurers to compete for subscribers.
The central fallacy in H.524 is the presumption by its authors that everyone in Vermont will pay their “fair share” of health care costs by state mandate. Not with New Hampshire on our border.
Vermont is not an island.