Research & Commentary: Vermont Single-Payer Health Care

Published November 4, 2014

Vermont is the first state to attempt to establish a completely government-run health care system, financing and administering health care services and health insurance coverage.

The origins of Vermont’s single-payer health care system emerged in 2010, when at the legislature’s request Harvard economist William Hsiao, along with Steven Kappel and Jonathan Gruber, presented three health insurance proposals, the third of which became the foundation for Green Mountain Care, the state’s single-payer program. Act 48, the bill creating Green Mountain Care, requires Vermont to create a single-payer system by 2017, but major obstacles will make implementation difficult, if not impossible.

The program’s creators greatly underestimated the costs of implementing and maintaining a single-payer health insurance system. A central problem is the failure of the legislature to establish a revenue source to cover the huge costs of Green Mountain Care. A University of Massachusetts study, commissioned by the state legislature, estimated Vermont would have to raise $1.6 billion in new revenues each year to support Green Mountain Care. In fiscal year 2012, Vermont collected only $2.7 billion in total tax revenues.

Supporters of single-payer contend health care is a natural right of all citizens and a government- controlled system would make health insurance available to everyone. Single-payer systems, however, have proven unsuccessful when tried elsewhere. Vermonters need only look to the experiences of nations that have implemented it; single-payer does not necessarily lead to better health care. The National Center for Policy Analysis points to the U.S. Department of Veterans Affairs (VA) as a perfect example of the failure of government-run health care.

A single-payer system like VA controls its costs based on a budget determined by the government, not what consumers need and are willing to spend. When resources inevitably run low, single-payer systems must ration care. It is often difficult for patients in such a system to access specialized services and testing. Even when a patient receives care, claims can take months to process. Despite receiving billions of dollars in increased funding (the VA’s funding was increased 13 percent between 2007 and 2013), the VA continues to run short of money.

In a report examining single-payer systems, John C. Goodman and Devon M. Herrick note single-payer systems across the world have shown largely negative results: “When health care is made free at the point of consumption, rationing by waiting is inevitable. Government control of the health care system makes the rationing problem worse as governments attempt to slow the use of services by limiting access to modern medical technology. Under government management, both efficiency and quality of patient care steadily deteriorate.”

In its issue suite on health care, The Heartland Institute explains the best way to preserve individual freedom, improve the quality of health care, and enhance the efficiency of the nation’s health care system is to empower individuals by giving them more control over the dollars spent on their behalf. Single-payer systems do the exact opposite. Vermont legislators should resist completing their transition to Green Mountain Care and instead pursue policies emphasizing consumer-driven health care.

The following documents offer additional information about single-payer health systems.

Research & Commentary: The Dangers of a Single-Payer Health System
Kendall Antekeier of The Heartland Institute argues single-payer systems do not benefit patients but instead subject them to the whims of government bureaucrats and force them to accept inferior health care.

Green Mountain Care Could Cost Vermonters Nearly $10 Billion a Year
Writing in the Heartlander digital magazine, Sarah McIntosh discusses a report to Vermont lawmakers that raised concerns about the costs of implementing Green Mountain Care, a proposed universal single-payer health care system for the state: “The report, ‘Costs of Vermont’s Health Care System Comparison of Baseline and Reformed System,’ was issued in November. According to its projections, Green Mountain Care would cost as much as $9.5 billion a year.”

Twenty Myths About Single-Payer Health Insurance: International Evidence of the Effects of National Health Insurance in Countries Around the World
Health policy experts John C. Goodman and Devon M. Herrick identify 20 myths about single-payer health care and provide evidence single-payer is inferior to our admittedly flawed current system.

Issue Brief: Healthcare & Single Payer
The Ethan Allen Institute examines recent developments in health care reform in Vermont, including the state’s single-payer health care proposal. The author concludes the plan may not work as well as its supporters claim.

Vermont Continues Push Toward Single Payer System Without Funding Clarity
Loren Heal reports on the push in Vermont to implement the nation’s first single-payer health insurance program. Heal reports its main flaw is funding. It remains unclear how the state plans to pay for the $1.6 billion annual cost of the program.

Ten Hard Questions about Single Payer Health Care
The Ethan Allen Institute outlines ten important problems with Vermont’s single payer health care plan, in the form of ten questions about the program’s structure, funding, and prospects for long term success.

Vermont Single-Payer Plan Full of Holes
Joshua Archambault of the Pioneer Institute discusses Vermont’s single payer plan and argues it has many serious, fundamental problems that should not be lost in the excitement that seems to arrive whenever a state tries something big: “Many of the issues that a single payer system is attempting to address can be dealt with by greater consumer engagement, a federal tax policy change to delink insurance from employment status, and greater transparency in the health system.”

Decoding the Language of Green Mountain Care
John McClaughry of the Ethan Allen Institute discusses Vermont’s single payer plan and argues it is likely to fail and result in “rationing, waiting lines, maddening bureaucracies, demoralized doctors and nurses, shabby facilities, obsolete technology, declining quality of care, and of course much higher taxation.

Vermont Is Waking Up from Its Single-Payer Dream to a Taxpayer Nightmare
Tyler Hartsfield and Grace-Marie Turner of the Galen Institute argue against Vermont’s single-payer system and conclude Vermont’s experience may act as a cautionary tale. “Maybe this exercise will help the left-leaning voters in Vermont and across the country realize that government services—even for something as worthy as health care—aren’t free,” they write.


Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Health Care News at, The Heartland Institute’s website at, and PolicyBot, Heartland’s free online research database at

The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state; or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact Logan Pike, Heartland’s state government relations manager, at [email protected] or 312/377-4000.