A trio of Democratic Western states hailed passage of their public health insurance options as important steps toward finishing Obamacare’s work of providing universal health coverage.
But an early look at Washington, Colorado and Nevada show their plans to provide more affordable coverage to hundreds of thousands of people aren’t working out as hoped.
In Colorado, which is enrolling people in its public option for the first time this year, only one insurance company out of eight met the cost-cutting targets set by lawmakers.
In Nevada, officials face an uphill battle implementing a policy the state’s incoming Republican governor called “bullshit” — and the state is already proposing easing targets for insurers to account for higher-than-expected medical inflation.
And in Washington state, which was the first to pass a public option in 2019, enrollment remains paltry, and while the cost of the health insurance plans has decreased, state health officials said the policies available are still too expensive.
“It’s still got a ways to go,” said Washington state Rep. Eileen Cody (D), who sponsored the state’s public option bill. “It’s not exactly what I had envisioned — I’ll put it that way.”
With Republicans set to take control of the House in January, progressive plans to build on Obamacare at the federal level are going nowhere, leaving it to state lawmakers to inch toward Democrats’ goal of universal health coverage. The rocky implementation of the public option plans in these three western states illustrates the challenges the left faces in doing so as blue state ambitions run up against a powerful health care industry accustomed to getting its way.
“The unfortunate reality is that there’s really big forces and really powerful forces that want to see the status quo continue to exist, and the status quo doesn’t allow for some of these more innovative changes that take out profit and take out some of the high reimbursement rates that we’ve been seeing,” said Liz Hagan, director of policy solutions at the progressive group United States of Care, which advocates for states passing public option policies. “A lot of the arguments and pushback have led to some of these public options being more of a public-private partnership, or public option-style plans.”
“I don’t know that any state has hit upon the magical solution that’s going to bring costs down.”
Insurance companies, which have long viewed the public option as an existential threat, and private market advocates continue to argue that the policy isn’t living up to its goals and, instead, will damage the nation’s health insurance landscape — and, with it, people’s ability to access affordable health care and a robust network of providers.
“They’re price controls. That’s what they are. And they’ll have the same effect that we’ve had in price controls for centuries, which is a reduced availability of the controlled commodities, whether they’re medical services or wheat or anything else,” said Robert Moffit, a senior research fellow in the Center for Health and Welfare Policy at the conservative Heritage Foundation. “I think the likelihood of them being successful, making a price control system work, is nil.”
The public option envisioned by liberals during the Obamacare debate was a government-run insurance plan that would compete in the private market. That’s not what Colorado, Nevada and Washington are doing. Instead, they are using their regulatory authority to influence what private insurance companies offer.
Democrats view this new public option concept as one tool among many — including reinsurance programs, state subsidies, rate review programs, and coverage expansions to undocumented immigrants — to expand health insurance access.
But costs have not come down enough yet to make a real dent in affordability or in the rates of uninsured and underinsured.
“I don’t know that any state has hit upon the magical solution that’s going to bring costs down,” said Sabrina Corlette, research professor, founder, and co-director of the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy.
While the policies haven’t yet achieved the kind of sweeping change that proponents had hoped, Democratic lawmakers are continuing to push ideas aimed at expanding coverage.
Next year, Minnesota — with its newly elected Democratic trifecta — is expected to again consider a proposal to expand MinnesotaCare, an Obamacare plan that subsidizes low-income people who make too much money to qualify for Medicaid. The proposal would open MinnesotaCare, which is administered by private insurance companies, to all residents regardless of income with premiums on a sliding scale.
Next year, Minnesota is expected to again consider a proposal to expand MinnesotaCare.