Vermont is a land of proud firsts. This small New England state was the first to join the 13 colonies. Its constitution was the first to ban slavery. It was the first to establish the right to free education for all – public education.

This week, Vermont will boast another first: the first state in the nation to offer single payer healthcare, which eliminates the costly insurance companies that many believe are the root cause of our spiralling healthcare costs. In a single payer system, both private and public healthcare providers are allowed to operate, as they always have. But instead of the patient or the patient's private health insurance company paying the bill, the state does. It's basically Medicare for all – just lower the age of eligibility to the day you're born. The state, buying these healthcare services for the entire population, can negotiate favourable rates, and can eliminate the massive overhead that the for-profit insurers impose.

Vermont hired Harvard economist William Hsiao to come up with three alternatives to the current system. The single payer system, Hsiao wrote, "will produce savings of 24.3% of total health expenditure between 2015 and 2024". An analysis by Don McCanne, MD, of Physicians for a National Health Programme pointed out that:

"[T]hese plans would cover everyone without any increase in spending since the single payer efficiencies would be enough to pay for those currently uninsured or underinsured. So this is the really good news – single payer works."

Vermont Governor Peter Shumlin explained to me his intention to sign the bill into law:

"Here's our challenge. Our premiums go up 10, 15, 20% a year. This is true in the rest of the country as well. They are killing small business. They're killing middle-class Americans, who have been kicked in the teeth over the last several years. What our plan will do is create a single pool, get the insurance company profits, the pharmaceutical company profits, the other folks that are mining the system to make a lot of money on the backs of our illnesses, and ensure that we're using those dollars to make Vermonters healthy."

Speaking of healthy firsts, Vermont may become the first state to shutter a nuclear power plant. The Vermont legislature is the first to empower itself with the right to determine its nuclear future, to put environmental policy in the hands of the people.

Another Vermont first was the legalisation of same-sex civil unions. Then the state trumped itself and became the first legislature in the nation to legalise gay marriage. After being passed by the Vermont House and Senate, former Governor Jim Douglas vetoed the bill. The next day, 7 April 2009, the House and the Senate overrode the governor's veto, making the Vermont Freedom to Marry Act the law of the land.

Vermont has become an incubator for innovative public policy. Canada's single payer healthcare system started as an experiment in one province, Saskatchewan. It was pushed through in the early 1960s by Saskatchewan's premier, Tommy Douglas, considered by many to be the greatest Canadian. It was so successful, it was rapidly adopted by all of Canada. (Douglas is the grandfather of actor Kiefer Sutherland.) Perhaps Vermont's healthcare law will start a similar, national transformation.

The anthropologist Margaret Mead famously said:

"Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has."

Just replace "group" with "state", and you've got Vermont.

• Denis Moynihan contributed research to this column

© 2011 Amy Goodman; distributed by King Features Syndicate