The public option is now a reality in 3 states

“Washington state first approved its public option in 2019 and made it available to consumers for enrollment in 2020. The state now has a year of experience getting the Cascade Care program up and running, and it’s already starting to tinker with the policy design. It’s also offering lessons for Colorado and Nevada (the other state to pass a public option this year, one week before Colorado).

As these states have drawn up their plans, one thing has become clear: The potential value of a public option is in keeping health care costs in check by keeping rates lower than those of private insurance plans. But it still remains to be seen whether a public option can expand health coverage to more people.”

“None of the states offer a “public” option like the one Congress contemplated in 2009, where the government sets up and administers its own health insurance plan.

“None of them are true public options in that sense,” says Katie Keith, who writes about insurance reform for Health Affairs and consulted with states as they developed public option legislation.

Instead, she compares them with public-private partnerships. States are contracting with private companies to create new insurance options to be overseen, if not run, by the government. States would face practical challenges to doing a “true” public option — namely, building up the financial reserves they’d need to pay out claims — so they’re taking another approach wherein private insurance companies will run the public option under rules set by the government.”

“The plans will be sold on the ACA marketplaces, alongside ACA-compliant private insurance. Only people who are eligible for ACA coverage through the individual and small-group market can sign up”

“How much to pay health care providers is the most important issue for any health insurance plan — those prices dictate the premiums charged to customers — and these states are taking divergent approaches in their calculations.”

“One challenge in trying to set lower provider rates is that doctors and hospitals might simply choose not to accept the public option plan. That was Washington’s experience in its first year: Some hospitals refused to contract with the public plan, and since an adequate provider network isn’t possible without a hospital, the plan has only been available in 19 of the state’s 39 counties.

Washington is trying to correct that issue through recently signed legislation that will, among other things, require hospitals in large systems to participate in at least one public option plan. Nevada and Colorado, having seen Washington’s network-adequacy issues, are setting up their own provider participation requirements from the start.”