Background Laparoscopic colectomy is increasingly being adopted for the treatment of colon cancer; however, the long-term effectiveness of this approach in a real-world clinical setting has yet to be verified. This study aims to compare the effectiveness and costs associated with laparoscopic and open colectomy from the perspective of the National Health Insurance (NHI) system in Taiwan. Methods A nationwide population-based colon cancer cohort was observed by linking the Taiwan Cancer Registry, claims data from NHI system, and the National Death Registry. Adult patients with Stage I to Stage III colon cancer who underwent primary cancer resection using either laparoscopy or open colectomy between 2009 and 2011 were included. A propensity score-matched cohort (1745 pairs) was applied to examine three clinical endpoints: overall survival, recurrence-free survival, and disease-free survival within 2 years after the operation. To comply with the perspective as well as the analytic horizon of the study, we limited the research to NHI claims from the study population for the corresponding time period. The health outcomes and net monetary benefits were verified by multivariate mixed-effect models. Results This analysis revealed that laparoscopy resulted in longer overall survival (adjusted difference 16.8 days, 95 % CI 7.3-26.2), recurrence-free survival (16.8 days, 5.0-28.6) and disease-free survival (26.4 days, 7.4-45.4), compared to open colectomy at 2 years post-op. Laparoscopy also led to a significantly shorter length of stay (3.2 days, 2.4-3.9) and lower index hospitalization costs (US$ 455, 181-729) than open colectomy; however, no differences in costs were observed over the long term. Overall, laparoscopy was more cost-effective than open colectomy under various willingness-to-pay thresholds in the setting of the Taiwan NHI. Conclusions The continued adoption of laparoscopy in primary curable colon cancer resection is expected to reduce health care costs over the short term while providing considerable health benefits over the long term.