Watching the events of the past several weeks in Washington has been sobering. Decades of failed fiscal policy have finally come home to roost and Congress is tied in knots trying to find a compromise solution and avoid American default. Americans rightly are scared that our leaders can’t find a way out of this muddle. But the really sobering part is this: the solutions under consideration don’t fix the problem. Even if Congress enacts the most draconian spending cuts advanced by the Tea Partiers, and all of the tax increases advanced by the liberals, we will not be out of the mess. The crisis will still loom. Why? Because health care costs continue to increase at an unsustainable rate, and health care spending is the single largest category of federal spending. Without real, sustained health care cost control, we still face a crisis, no matter what package of cuts and revenues the new “gang of 12” develops.
As a Governor, I can’t ignore this problem. Health care spending more than tripled in Vermont between 1992 and 2009. Between 2000 and 2009, health care spending as a share of our gross state product rose from 12.9 percent to 18.5 percent.
We come face to face with the impact of growing health care costs every year in our state budget process. Health care squeezes out all sorts of other priorities, and we (state government) aren’t even paying our fair share of the increase. The state can’t afford to sustain a rate of growth that far exceeds growth in our economy and growth in our tax revenues. So we shift costs from state health care programs to the private sector. The private sector can’t sustain the growth, either, so they cut jobs and reduce insurance coverage for their employees. That’s why, despite aggressive efforts to expand government-sponsored insurance coverage in Vermont, nearly one in ten Vermonters is uninsured, and nearly a quarter of our population is underinsured — they have coverage, but could still go bankrupt if they had a major illness.
