While Massachusetts grapples with its own health costs, the nation’s eyes will be on Vermont as it tries to do ObamaCare one better and switch to a single-payer health insurance system. The newly elected governor, Peter Shumlin, made single-payer a main campaign pledge. Now he has assembled a team of health officials grounded both in the realities of Vermont medical care and the pros and cons of comprehensive health reform. Shumlin’s special assistant for reform will be Anya Rader-Wallack, once an aide to former Vermont Governor Howard Dean and more recently deeply involved with the Massachusetts universal-coverage system.

Single payer, under which the government would take over all health insurance functions, has attracted many reform advocates because it simplifies health payments and reduces the overhead costs of a private insurance system that has to pay for marketing and, in some cases, shareholders’ dividends. Single-payer would also unlink insurance from employment, reducing a costly burden on companies and increasing workers’ flexibility in seeking new job opportunities. Hospitals and doctors have been wary of single-payer because two of the biggest payers in the current system — government-run Medicare and Medicaid — reimburse at rates that providers say are inadequate.

Any reform plan in Vermont will have to address that concern. More immediately, it will need waivers from the federal government to bring both Medicare and Medicaid into the one-payer system. The Obama administration should examine waiver requests closely to make sure they protect the needs of both patients and providers. But Vermont deserves the benefit of the doubt as it works its way toward becoming a laboratory of democracy on an issue — the unsustainably steep increase in health costs — that has proven intractable both for the nation at large and health-reform pioneer Massachusetts.

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