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Obama backs health care waivers in 2014

February 28, 2011

Staff Writer
BENNINGTON — President Barack Obama told the nation’s governors Monday that he supports legislation that will allow states to design their own health systems beginning in 2014, providing a boost for a hybrid single-payer system sought by Vermont Gov. Peter Shumlin.

Federal health care reform legislation signed into law in 2010 already permits states to design and seek approval for their own plans, but not until 2017. Obama, who spoke to the National Governors Association at the White House Monday, said he is backing the “Empowering States to Innovate Act” submitted by a bipartisan group of senators.

“I think that’s a very reasonable proposal. I support it. It will give you more flexibility more quickly while still giving the American people reform,” the president said.

(Official White House Photo by Pete Souza)

Most of the main components of Obama’s health care reform law take effect in 2012. Among the most divisive are provisions that require most individuals to obtain health insurance coverage, and companies with a certain amount of employees provide coverage to workers, or pay penalties.

But under the legislation now backed by the president — and Vermont’s three-man Congressional delegation — states could be granted waivers to implement individual health systems, as long as they meet or exceed federal requirements.

“If your state can create a plan that covers as many people as affordably and comprehensively as the Affordable Care Act does — without increasing the deficit — you can implement that plan, and we’ll work with you to do it,” Obama said. “I’ve said before, I don’t
believe that either party holds a monopoly on good ideas. And I will go to bat for whatever works, no matter who or where it comes from.”

The proposed law allows states to submit a single application that also includes Medicaid waiver requests, which will be required for the plan proposed in Vermont.

Shumlin, a Democrat who assumed office in January, promised during his campaign for governor that he would seek a universal health care system in Vermont. He has put forth legislation this year that lays out the first steps of a hybrid single-payer system designed by
Harvard professor and health care expert Dr. William Hsiao.

Shumlin said the first step of his plan is to establish a board to develop a cost-containment plan. A financing system — some have suggested a payroll tax —  and necessary waivers will be hashed out later, according to Shumlin. The plan advocated by Hsiao, when implemented, will provide comprehensive coverage to all Vermont residents and be administered by a private entity, not state government.

The president’s support for waivers in 2014 keeps Vermont’s efforts on track, Shumlin said in a telephone interview following Obama’s remarks. “I’ve always said that our biggest challenge is not Washington, it’s developing the first cost-containment plan that actually works,” he said.

“It’s incredibly exciting that he has endorsed the plan,” Shumlin added. “All they’re saying is don’t reduce standards.”

Shumlin said he is “incredibly grateful” to Obama and Health and Human Services Secretary Kathleen Sebelius for their support. He also lauded Vermont Sens. Patrick Leahy and Bernie Sanders and Rep. Peter Welch, for their efforts to lobby the White House.

“Vermont has helped to move the needle on this development,” Shumlin said. “The fact of the matter is we’ve been encouraging the [Obama] administration to allow this type of flexibility and I’m just delighted the president is willing to support our efforts here in Vermont.”

Vermont’s delegation introduced its own legislation earlier this year at a Vermont Statehouse press conference with Shumlin seeking waivers for states in 2014. Like the legislation introduced last year by Sens. Ron Wyden, D-Ore., Mary Landrieu, D-La., and Scott Brown, R-Mass., the Vermont delegation’s bill calls for waivers in 2014. But it also contains a provision that would make it more difficult for future administrations to revoke waivers.

The waivers available would last five years. Under the Vermont delegation’s bill, waivers would be renewed unless the federal government could demonstrate that state’s are not meeting the required standards.

“While some in Washington want to turn the clock back and repeal the new health reform law, Vermont and other states want to move ahead,” Leahy, a Democrat, said. “Vermont has already been working hard to improve the state’s system of health care, and passage of the delegation’s waiver bill will move our state one step closer to that goal.”

Sanders, meanwhile, said he is hoping Vermont “will lead the nation in a new direction through a Medicare-for-all, single-payer approach.”

“I am delighted that President Obama announced today that he will, in fact, support allowing states to innovate with health coverage models sooner rather than later,” said Sanders, an independent who caucuses with Democrats.

The push for waivers should receive bipartisan support because it allows states to develop a system that suits them, Welch said, a third-term Democrat. “I’m hopeful that Democrats and Republicans alike will support this practical step to give states flexibility to achieve progress their own way,” he said.

Obama signaled a willingness Monday to entertain ideas from all factions. He made clear, however, that he does not intend to revisit the squabbles that marred the health care reform debate before its passage.

“I am not open to re-fighting the battles of the last two years, or undoing the progress that we’ve made. But I am willing to work with anyone — anybody in this room, Democrat or Republican, governors or member of Congress‚ to make this law even better, to make care even better, to make it more affordable and fix what needs fixing,” Obama said.

Citing the increasing pressure that Medicaid costs are placing on state budgets, the president asked governors on Monday to create a bipartisan group to work with the administration on ways to lower costs in the state-federal program. “If you can come up with more ways to reduce Medicaid costs while still providing quality care to those who need it I will support those proposals as well,” Obama said.

Contact Neal P. Goswami at

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