Executive Summary 

• Colorado recently enacted legislation that commissioned a study to evaluate the coverage and cost implications of implementing a single-payer system in the state. 
• A similar endeavor was attempted in Vermont in 2011, when the legislature passed a bill instructing the state to implement a single-payer system; the project was suspended after the state’s government failed to create a broadly acceptable financing plan. 
• Colorado should learn the lessons from Vermont’s attempt at single-payer: Even in a state as demographically similar as Vermont, funding sources, system designs, and political realities prevented any serious movement toward implementing a single-payer system. 

Introduction 

While recent health news has focused on federal government happenings – from reconciliation to executive orders and regulations –there is also much policy action occurring at the state level. One of these recent state actions, in Colorado, is the initiation of work to study (and potentially implement) a single-payer health care system for the state. This is concerning for several reasons, covered extensively in the Reality Check-up series. But Colorado could simply look to Vermont to discover the difficulty in designing and implementing a single-payer system. 

Vermont’s attempt to implement a single-payer health care system, known as Green Mountain Care, stands as a significant case study in health policy reform. Initiated with high aspirations, the plan ultimately faltered before implementation. While not representative of the U.S. population more broadly, even a state with the demographics of Vermont (small, healthier, lowest rates of uninsured residents) couldn’t design and implement an acceptable system. Colorado, and certainly the federal government, should learn the lessons of Vermont’s experience. 

Colorado 

On May 14, 2025, Colorado enacted legislation that requires the Colorado School of Public Health to assess how to implement a single-payer health care system. The legislation begins with an assessment of “draft model legislation for implementing a single-payer, nonprofit, publicly financed, and privately delivered universal health-care payment system for Colorado that directly compensates providers.” 

This model legislation is intended to assess several factors, including: 

• Estimated operational costs over 1, 2, 5, and 10 years; 

• Reimbursement rates for health-care providers; 

• Potential funding mechanisms based on individuals’ ability to pay; 

• Impacts on existing health-care facilities, insurance companies, and socioeconomic groups; 

• Legal considerations related to federal laws and programs; 

• Feasibility of implementing such a system in Colorado. 

 This commission is intended to comprehensively design an implementable single-payer system, and these are just some of the incredibly complex and thorny policy items that must be worked out. 

This recent legislation isn’t the first time Colorado has tried to implement a single-payer health care system. In 2016, lawmakers proposed Amendment 69 – an initiative to establish ColoradoCare, a system in which all Coloradans would gain insurance through a tax-funded government program. When put to a vote, however, nearly 80 percent of Coloradans voted no – largely due to the significant costs the system would incur for residents and the state. While ColoradoCare would have broken even in the first year, by year 10 it would have created a $7.8 billion deficit. Thus, due to Colorado’s balanced budget amendment and its Taxpayer Bill of Rights, the state would have had to raise taxes, cut services, raise copayments, lower health care provider payments, or some combination of all to cover the difference.  Clearly this was not a trade the state’s voters were eager to make. 

The commission’s report is due to the Colorado legislature by December 31, 2026 – not a lot of time to overhaul a state’s health care system. Before attempting this feat, Colorado should look to Vermont’s attempt at such an ambitious policy transformation. By exploring the Vermont case study, Colorado may not only save time, money, and effort, but also avoid the disastrous policy that is single-payer health care. 

Vermont 

In 2011, Vermont passed legislation (Act 48) aiming to establish the nation’s first state-level single-payer health care system. The system, dubbed Green Mountain Care, sought to provide universal coverage to all residents, decoupling health insurance from employment and reducing administrative costs.  

Act 48 established the Green Mountain Care Board (GMCB), an independent body tasked with overseeing the design and implementation of the new health care system. Akin to the collaborative body set up in Colorado, the GMCB’s responsibilities included controlling costs, improving quality, and ensuring access to health care for all Vermonters. In a sign of the voracity to implement a system, the initiative was informed by a study led by national and international experts on single-payer systems. This study projected a single-payer system could save Vermont up to $1 billion annually in a decade.  

These savings – which the study projected would phase in over the observed period – did not mean that financial costs would be avoided. A significant hurdle for establishing the new single-payer system was how to fund it. Initial proposals to generate revenue to establish and begin to offer coverage under Green Mountain Care included an 11.5-percent payroll tax on employers and a 9.5-percent income-based premium for individuals. Those proposed taxes and their corresponding spending would have nearly doubled the state budget at the time and faced resistance from businesses and the public. Estimates for the system’s cost varied, with projections ranging from $1.6–$2.5 billion in the first year alone.  

Vermont anticipated substantial federal support, including waivers to redirect funds from existing federal programs. The state faced challenges in securing these waivers, leading to a projected shortfall of $300 million in federal funds, $150 million less in federal funds for the program than had been expected, on top of another $150 million less in federal Medicaid funds. Even if this federal support had manifested, the governor couldn’t promise that taxes wouldn’t need to have been raised in the future. As has been previously discussed in the Reality Check-up series, support for single-payer health care plummets when individuals learn that it may lead to higher taxes. 

While there was initial enthusiasm, support waned as financial uncertainties grew. In 2014, reflecting public apprehension about the plan’s feasibility, then-Governor Shumlin announced the abandonment of Green Mountain Care, saying: “Pushing for single payer health care when the time isn’t right and it might hurt our economy would not be good for Vermont and it would not be good for true health care reform. It could set back for years all of our hard work toward the important goal of universal, publicly-financed health care for all.”  

In short, even Vermont – with its heterogeneity and desire to implement a single payer system – couldn’t create a feasible plan to design and fund single-payer health care. As previously discussed in this series, single payer health care is expensive.  

Conclusion 

Vermont’s attempt at single-payer health care provides valuable insights into the complexities of health system reform. In addition to its myriad other problems, single-payer is difficult to design, incredibly expensive, and challenging to fund. Both state and federal policymakers should learn from failed attempts at single-payer systems and instead focus on reforms that improve health and lower costs for all.