While Washington state prepares to roll out public plans run by private insurers, at least three other states are on the way to developing their own, distinctive public-option models.
Colorado is considering a wide range of possible vehicles for a public plan. Connecticut is eyeing creation next year of a new “Connecticut Option” plan for individuals and small businesses. New Mexico seeks to let people who don’t qualify for Affordable Care Act subsidies buy into Medicaid.
Three other states—Delaware, Massachusetts and Oregon—previously completed studies evaluating public plan options building on existing state programs like Medicaid and state employee health plans. But no further action has been taken in those states this year.
Colorado Gov. Jared Polis signed a bill in May directing state agencies to study and recommend a public plan model to provide all residents access to affordable health coverage. It noted that Coloradans in 14 counties have access to only a single insurer, Anthem, and that the number of uninsured people in those counties is rising.
The bill, opposed by GOP leaders, requires the state agencies to submit a proposal by Nov. 15, 2019, to be considered in the 2020 legislative session. They have to identify which consumers to target, at what level to set provider payment rates, whether the plan should be offered on or off the Affordable Care Act exchange, and whether to seek any CMS waivers.
The Colorado Legislature also passed a bill to seek a Section 1332 waiver to establish a reinsurance program, with the goal of reducing premiums by 20% to 30% in the highest-cost markets.
“What may be most efficient is to use our Medicaid system as a buy-in structure,” said Adam Fox, director of strategic engagement for the Colorado Consumer Health Initiative, which lobbied for the public-option bill. “Our hope is to structure it to bring down both premiums and cost sharing.”
In Connecticut, Democratic Gov. Ned Lamont and leaders of the Democratic-controlled Legislature announced last month that they had reached agreement on a proposal to create new public plans that could save individuals and small businesses up to 20% in premium costs. But intense opposition from Connecticut-based Cigna and other insurers killed it last week. The bill’s sponsors said they would revive it next year.
Like Washington’s new Cascade Care plans, the Connecticut Option plans would have been offered by private insurers, and would compete with private plans on or off the exchange. The state would have designed benefits, created provider networks and “rented” them to private plans, requiring the plans to guarantee premium savings of at least 20%.
The Connecticut bill also would have offered a state financial assistance to consumers—including people who earn too much to qualify for ACA premium subsidies—to help them with healthcare costs. That would be funded by reinstating a fee on people who do not buy health insurance.
A spokesman for Cigna, which does not offer individual or small-group coverage in Connecticut, said “this option does not work for the public, for the state, or for the private sector.”
The sponsors still hope to pass a provision by June 5 establishing a reinsurance program to reduce premiums, under a federal 1332 state innovation waiver.
New Mexico passed a bill in March allocating funding for study and development of a Medicaid buy-in plan, including seeking CMS waivers to receive federal funding to expand coverage and reduce costs. An earlier study found that a Medicaid buy-in could offer premiums that are 15% to 28% lower than current rates.
The state is considering targeting individuals who don’t qualify for ACA premium subsidies because their income is too high, they fall into the so-called family glitch with a family member who has access to an employer health plan, or they are undocumented immigrants.
It’s leaning toward a Medicaid buy-in model because Medicaid already serves 40% of the state’s population and it’s a well-known and popular program. The study will help the state decide whether to offer the public plan on or off the exchange, possibly starting in 2021.
Advocates of state public-option plans across the country are guardedly optimistic—and impatient. “The reality is that federal Medicare for All won’t pass in the next two years,” Fox said. “We can’t wait any longer to move forward with something at the state level.”