Vermont seeks to become first state offering single-payer health insurance Posted: May 31st, 2011

On May 26, Vermont Governor Peter Shumlim signed into law a bill that paves the way for Vermont to offer a single-payer health insurance system to residents. The legislation creates Green Mountain Care, a health insurance exchange mandated by federal health reform that includes plans to convert the system to a single-payer model in the future.

Under the new law, a five-member board will develop reimbursement rates for health care services. In addition, the board will be responsible for creating a plan to transition the health insurance exchange to a single-payer system. Under a single-payer system, the government essentially acts as insurer for all residents, including setting reimbursement rates for health care services and paying claims.

Proponents hope the new system will be in place by 2017 but the future is uncertain. Before Vermont can begin paying for health care for all 620,000 state residents, it must receive a waiver from the federal government. In addition, last week's legislation requires a financing plan to be in place by 2014 that ensures the new system will cost less than the current fee-for-service model.