The Washington Post
States consider providing public health coverage
The Trump administration has promised states more flexibility in how they run their Obamacare marketplaces. But creating a state-backed “public option” plan may not be what Centers for Medicare and Medicaid Services Administrator Seema Verma had in mind.
Half a dozen states are looking into creating a public option — either as a stand-alone plan or a buy-in to Medicare or Medicaid — hoping to entice more of the uninsured by offering a more affordable choice. It’s an idea Congress considered but then discarded while writing the 2010 health-care law but is increasingly touted by Democrats as a way to achieve universal coverage.
But states may be limited in how far they can go. They need to ensure the plans closely mirror coverage already being sold in marketplaces — otherwise, they must request permission via waivers from the Trump administration, which has emphasized private health options and has appeared less enthusiastic about an expansion of government-backed coverage.
That’s something Washington state tried to avoid. The state is working on launching a public option by 2021, which will offer somewhat lower premiums than its competitors by paying lower rates to doctors, hospitals and other health providers.
To avoid any potentially messy run-ins with the Centers for Medicare and Medicaid Services, Washington will provide coverage through a commercial plan that is already approved to sell on marketplaces. State legislators considered requesting a waiver from the agency so they could undertake more ambitious changes — like structuring the plan’s subsidies in alternative ways or trying to capture more savings — but ultimately rejected that idea.
“We ruled it out early on because we didn’t want to even ask,” said Jason McGill, senior health policy adviser to Gov. Jay Inslee, a 2020 Democratic presidential candidate. “We felt that it would have been a nonstarter with the current administration.”
The administration has made clear what kinds of things it would approve: moves by states to ease Obamacare requirements or to let states apply its subsidies to leaner, cheaper plans. Verma has frequently criticized the Affordable Care Act as overbearing, stressing that the agency is doing everything it can to ease the law’s requirements.
Verma has also been publicly critical of Medicare-for-all ideas advanced by Democrats on Capitol Hill, warning that they would ruin the Medicare program and calling the proposals “the greatest threat to the American health-care system.” The agency didn’t respond to a question about how it would respond to a state waiver request for creating a public option.
“When you look at the new guidance, there’s an emphasis on private options,” said Chiquita Brooks-LaSure, managing director for consulting firm Manatt Health. “We would just have to see what the administration would say if a state came up with a waiver proposal.”
Other states are also eyeing public option plans, although their progress has been slow. New Mexico has formed a working group and set aside $140,000 to examine the idea after abandoning an original proposal to create a Medicaid buy-in. Colorado passed a bill directing state agencies to draft a plan by November for how a public option could be designed and how it would be sold.
The Connecticut House passed a public option bill in the spring, although it later stalled in the Senate. The Nevada legislature passed a public option bill two years ago, but it was vetoed by Republican Gov. Brian Sandoval. Public option bills have been proposed in Maine, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey and Oregon.
United States of Care, a group formed by former Centers for Medicare and Medicaid Services administrator Andy Slavitt, recently released a playbook for states considering a Medicaid buyin — a form of a public option plan.
There’s a clear problem many of these states are trying to solve: Obamacare plans that, for many Americans, are still too expensive. While there are signs that marketplaces have been stabilizing, costs are still prohibitive for many consumers, especially those who qualify for only minimal subsidies or none at all.
The average monthly premium for a 40-year-old purchasing a midrange “silver” plan is $495 before subsidies, according to research by the Kaiser Family Foundation, a nonprofit that focuses on national health issues. And then there are hefty plan deductibles; the average annual silver plan deductible for medical and prescription drug coverage is $4,375, according to the foundation.