States Busy Exploring Public Option Proposals

by Jill Zorn |

With private insurance becoming more and more expensive, and out-of-pocket costs getting out of control, at least ten states are looking at creative ways to build off either their Medicaid programs or their state employee health plans to expand affordable, quality coverage to more residents.

While the discussion is already under way in D.C. and on the campaign trail about passing some version of Medicare for All at the federal level, nothing can be done until at least after the 2020 presidential election. Meanwhile, the states are looking at various options, both short and long term.

As the Trump administration continues to find ways to sabotage the Affordable Care Act (ACA), states are focusing on what they can do now, without help from the federal government. States are also laying out possible options for the future, should a new president be elected in November of 2020 who will support new approaches to expanding public coverage to their residents.

Among the states pursuing public option bills and studies are New Mexico, Colorado, Washington and Connecticut.

New Mexico
New Mexico is the first state out of the gate. They passed a bill last year to study ways to expand coverage building off their Medicaid program. The resulting study identified four possible approaches. One of them, a “Targeted Medicaid Buy-in”, would offer “Medicaid-like” coverage to residents of the state who are not eligible for Medicaid, Medicare or subsidized health insurance through the Affordable Care Act. This would include residents whose immigration status prevents them from accessing current programs. New Mexico is focused on the Medicaid program, as already 40% of their population are on Medicaid-the highest percentage in the country.

A second study was conducted to estimate the numbers of people who could enroll and what the cost to the state would be if they chose to subsidize enrollees with incomes under 200% of the Federal Poverty Level (FPL). The study also shows that this form of coverage would be less expensive than what is currently available to people.

Now a bill has been introduced in the state legislature to moving this proposal forward. Some of the other approaches considered in the first study that could cover more people will be considered in 2021, as they will require federal approval from a supportive administration.

Colorado
Colorado was unable to pass a public option study bill last year. However, advocates were able to obtain funding to support research similar to the study that was done in New Mexico. The study looked at how their current Medicaid program could serve as a foundation for coverage expansion. Colorado has a Medicaid program similar to ours in Connecticut-it runs the program itself and doesn’t contract coverage out to Medicaid Managed Care Organizations. This year a bill has already been introduced, proposing that state agencies study, “the design, costs, benefits, and implementation of a state option for health care coverage”.

A second bill focuses on authorizing a pilot project to allow people in two rural counties to buy into the state employee health plan, if their income is between 400 and 500% FPL, too high to qualify for ACA subsidies.

Washington
Governor Jay Inslee announced a public option proposal in early January that is focused on increasing competition in their ACA marketplace. The Washington State Health Authority, which administers both Medicaid and the state employee plan, will use its negotiating power to contract with health plans to offer coverage in every county in the state with the same standardized benefit structure. Costs will be lower because provider reimbursement rates would be similar to Medicare rates for providers. Currently some counties only have one health plan competing in the marketplace.

Connecticut
Connecticut, too, is focused on increasing access and affordability through a public option. At least seven bills have been introduced in the Connecticut General Assembly this year. Stay tuned for an upcoming blog on these emerging proposals.