Vermont Single Payer Healthcare: Act 48, Collapse, and Lessons

Vermont’s single-payer healthcare plan was a 2011 law, Act 48, that set out to cover every resident under one publicly financed system called Green Mountain Care. It never launched. Governor Peter Shumlin abandoned the effort in December 2014 after state analysts concluded that paying for it would require roughly $2.8 billion in new state taxes, a 151 percent increase in total state tax collections, and that the resulting economic shock was more than Vermont could absorb.¹²

What Act 48 Actually Created

Shumlin signed Act 48 in July 2011 after campaigning on universal coverage. The law established Green Mountain Care, a system that would cover all Vermont residents regardless of income or health status, paid for through a single Green Mountain Care Fund drawing on state appropriations, federal waiver dollars, and other revenue.³ It also created an independent, five-member Green Mountain Care Board appointed by the governor and charged with setting provider payment rates, defining benefits, and overseeing the transition.

The design replaced fee-for-service medicine with global budgets: providers would be paid to care for defined populations rather than billing per visit or procedure. Delivery of care would remain private; only the financing would be public. The intellectual framework drew on the work of Harvard economist William Hsiao, who had helped design Taiwan’s single-payer system and projected several hundred million dollars a year in administrative savings for Vermont, along with a warning that full integration could take up to twelve years.⁴

Crucially, Act 48 did not fund itself. It listed five preconditions before Green Mountain Care could launch: a federal waiver from the Affordable Care Act’s exchange requirements (unavailable until 2017 at the earliest), a financing law passed by the legislature, an approved benefit package, and a specific determination of economic impact by the Green Mountain Care Board.³ Vermont’s congressional delegation tried to move the waiver window up to 2014 and did not succeed.⁵ The administration was supposed to recommend a financing plan by January 2013. That deadline passed with no specific proposal.

Why It Collapsed

By 2014, the numbers were on paper and they were staggering for a small state. Green Mountain Care would cost an estimated $4.3 billion in its first year, growing past $5 billion by 2021.¹ Paying for it required roughly $2.8 billion in new state tax revenue. The mechanism the administration examined: an 11.5 percent payroll tax on businesses combined with a sliding income-based premium of up to 9.5 percent on individuals.²

The projected savings were real but had shrunk. A 2014 study projected only 1.6 percent savings over five years, well below the more optimistic 2011 estimates.⁶ A $2.5 billion cost gap would need to be filled from state financing, a 45 percent increase over Vermont’s $5.6 billion 2015 state budget. Federal funding also came in below expectations, with a projected shortfall of $300 million.⁷

On December 17, 2014, Shumlin held a press conference and killed the plan. “It is not the right time for Vermont,” he said, warning that the required taxes “might hurt our economy.”² The New England Journal of Medicine reported that he cited “limitations of state-based financing,” “limitations of federal law,” “limitations of our tax capacity,” and “sensitivity of our economy,” concluding that the “risk of economic shock is too high.”⁶

Politics narrowed his room. Shumlin had barely won reelection in November 2014, edging his Republican opponent by a single percentage point (46 to 45 percent) in a race that had to be decided by the state legislature.⁶ An April 2014 poll showed support for single-payer at 40 percent, opposition at 39 percent, and 21 percent undecided. The administration had never persuaded voters that the new taxes would replace their existing insurance premiums rather than stack on top of them. The NEJM analysis put it directly: the tax plan would have been “glaringly evident on every Vermonter’s tax bill,” making people feel like they were losing rather than gaining.

Single-payer supporters felt betrayed. Politico described a “sense of betrayal” among advocates, and Andrew Coates, then president of Physicians for a National Health Care Program, called the reversal political expediency.² Some advocates argued that the abandoned framework was never a “true” single-payer plan anyway, because it would have exempted large multistate employers and left Medicare and TRICARE integration unresolved. Protesters disrupted Shumlin’s inaugural address in early 2015.⁸

The Federal Legal Walls

Even if the financing had penciled out, federal law stood in the way. Vermont needed waivers from multiple federal agencies covering Medicaid, the Children’s Health Insurance Program, Medicare, and workers’ compensation.⁵ The ACA’s Section 1332 innovation waivers, the vehicle for restructuring the exchange, would not be available until 2017.

The Employee Retirement Income Security Act was the harder problem. ERISA preempts state regulation of self-insured employer health plans, which cover a large share of the workforce. The U.S. Supreme Court reinforced that barrier in 2016, after Green Mountain Care was already dead, when it decided Gobeille v. Liberty Mutual Insurance Co. The Court ruled 6-2 that ERISA preempted Vermont’s law requiring health insurers to report claims data to a state database, holding that reporting, disclosure, and recordkeeping are “central to, and an essential part of” ERISA’s uniform system of plan administration.⁹ The decision meant that even data collection from self-insured employers had to be voluntary.¹⁰ Regulating their plans, the deeper step single-payer would have required, was on even weaker ground.

What Vermont Did Instead

After abandoning single-payer, Vermont pivoted to reform that worked within the existing insurance framework. In October 2016, the Shumlin administration and the Green Mountain Care Board launched the Vermont All-Payer Accountable Care Organization Model, an agreement with the federal Centers for Medicare and Medicaid Services that let Medicare, Medicaid, and commercial insurers coordinate payment methods through a single ACO called OneCare Vermont.¹ The goal was to move away from fee-for-service toward fixed payments tied to population health outcomes.

Results were mixed. Early studies showed increases in primary care and behavioral health utilization among Medicaid beneficiaries and fewer emergency department visits for high-risk patients. Costs also mounted: from 2018 to 2022, OneCare’s administrative expenses totaled $70.35 million, and mandatory federal reporting cost the state another $7 million through fiscal year 2026.¹¹ In 2023, Blue Cross Blue Shield of Vermont pulled out of its contract with OneCare, removing 93,000 enrollees. The CMS agreement expired at the end of 2025, and OneCare Vermont is now operating in skeletal form.

Vermont’s next federal initiative is the AHEAD Model (Achieving Healthcare Efficiency through Accountable Design), which the state was selected to join in July 2024. It signed the state agreement in January 2025, and the performance period runs from January 2028 through December 2035.¹²¹³ AHEAD introduces hospital global budgets, adds a separate primary care track with prospective, risk-adjusted payments, and requires mandatory Medicaid participation while seeking alignment with commercial payers.

The Green Mountain Care Board created by Act 48 is still active. Its enabling statutes in Title 18 have been amended repeatedly but never repealed.¹⁴ The board reviews and approves hospital budgets, sets health insurance premium rates, and oversees major capital investments through the Certificate of Need process.¹⁵ Advocacy for a fully public system continues on a narrower front: Vermont Healthcare for All has focused its 2025-2026 legislative efforts on universal primary care rather than a full single-payer bill.¹⁶

What Other States Should Take From It

Vermont’s collapse gets cited whenever another state or federal proposal for universal coverage comes up. Critics of Senator Bernie Sanders’s federal Medicare for All bill pointed to Vermont as proof that even a state with a determined governor, a friendly legislature, and progressive voters could not make the arithmetic work.¹⁷ The New England Journal of Medicine concluded that any state trying single-payer would run into “similar obstacles.”¹⁸

Other states have hit comparable walls. Colorado voters rejected Amendment 69 in 2016 by nearly 60 percent; the proposal would have required a $25 billion tax hike in its first year to fund a $36 billion program.¹ In Massachusetts, advocacy groups estimated that replacing private insurance would add $22.8 billion to the state budget, an increase of more than 50 percent. Colorado has since commissioned a new feasibility study, due at the end of 2026.⁷

Linda Blumberg of the Urban Institute told NPR that a state-by-state approach to single-payer is “really challenging,” and that success is more plausible in high-income states with substantial existing private insurance spending that can be redirected to the public sector.¹⁷ The pattern across states is consistent: polls show strong initial support for single-payer that erodes sharply once voters see the specific tax increases attached. Vermont’s experience suggests the core political problem is not that people oppose universal coverage in principle. It is that replacing private spending with visible public taxation produces sticker shock that elected officials cannot easily survive, particularly when large employer plans remain outside state reach and federal waivers arrive years late.

1
Third Way. Single-Payer Health Care: A Tale of 3 States
2
Politico. Vermont Bails on Single-Payer Health Care
3
Connecticut General Assembly. Vermont Single-Payer Health Care
4
VTDigger. Hsiao Health Care Reform Integration Could Take 12 Years
5
The Commonwealth Fund. Vermont Lays Out Path to Single Payer
6
New England Journal of Medicine. The Demise of Vermont’s Single-Payer Plan
7
American Action Forum. Assessing State-Level Single-Payer Health Care Prospects
8
Vermont Public. Eight Years After Shumlin’s Crushing Reversal, Single-Payer Health Care Movement Presses On
9
Justia. Gobeille v. Liberty Mutual Insurance Co., 577 U.S. 312
10
SCOTUSblog. Gobeille v. Liberty Mutual Insurance Company
11
VTDigger. Vermont’s 8-Year All-Payer Health Care Experiment Sunset at the End of 2025
12
Vermont Office of Health Care Reform. AHEAD Model
13
Centers for Medicare and Medicaid Services. AHEAD Model
14
Vermont General Assembly. Title 18, Chapter 220: Green Mountain Care Board
15
Green Mountain Care Board. About the Board
16
Vermont Healthcare for All. Vermont Healthcare for All
17
NPR. Why Bernie Sanders’ Single-Payer Health Care Plan Failed in Vermont
18
New England Journal of Medicine. The Demise of Vermont’s Single-Payer Plan