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.
Jim Mone/AP Photo

And, after an unsuccessful Medicaid buy-in push in 2019, New Mexico Together for Health Care, a coalition of progressive and health care advocacy groups, are talking with lawmakers and the governor’s office about their proposal to allow all New Mexicans to enroll in Medicaid regardless of their income. Advocates said the proposal requires the state asking CMS to foot a large part of the bill through a state plan amendment.

“We believe that health care should be publicly funded, include everyone and not be dependent on employment,” said Elianne Farhat, executive director of the progressive group TakeAction Minnesota.

How it works

Under Colorado’s law, all health insurers offering individual and small group plans must have at least one public option plan. That plan is required to reduce premiums 5 percent each year — with an allowance for inflation — over three years while also providing a more robust set of benefits to enrollees, including reduced out-of-pocket costs, co-pays instead of co-insurance, and a provider network the state deems to be culturally responsive.

Most plans failed to meet this year’s 5 percent target, which Corlette, the Georgetown professor, described as a “shot across the bow” to the state.

Denver Health, a local nonprofit insurer, was, however, able to reduce premiums on the exchange by about 2.6 percent, while Kaiser Permanente’s stayed roughly flat, offering some evidence to supporters of the public option that it is beginning to have the desired effect.

But Amanda Massey, executive director of the Colorado Association of Health Plans, a trade group representing insurers, dismissed Denver Health as a “very unique example” and said that providing the robust coverage required of Colorado Option plans and cutting costs isn’t feasible.

“Certainly, [insurers are] trying to do everything they can to reduce the costs, but I think we have to be very thoughtful about ensuring that carriers can still be solvent and cover the costs of their claims,” Massey said.

While there are no penalties this year for failing to meet the targets, insurers will be required to reduce their premiums an extra 5 percent next year. If they don’t, the state Division of Insurance can hold a public hearing and set reimbursement rates for providers that will help insurers meet the premium reduction targets.

Public option proponents argue that even if they haven’t been able to lower costs as much as expected, they’re able to offer consumers higher value plans with more robust benefits and networks that are more culturally responsive.

Kyle Brown, deputy commissioner of affordability programs at the Colorado Division of Insurance, said the old marketplace plans weren’t working for people and the state needed to try something new.

“We’re very optimistic because we’ve already seen a positive effect on Colorado’s marketplace,” he said. “Plans are already competing and changing the way they price their plans.”

Washington state is running its third open enrollment with the public option, and state health officials hope that new state subsidies for people who make up to 250 percent of the federal poverty level will boost uptake. Only about 7,000 of the nearly 240,000 people who enrolled in individual plans through the state’s health insurance exchange selected public option plans for 2022.

Laura Kate Zaichkin, senior policy adviser at the Washington Health Benefit Exchange, said premiums for public option plans — which are in the low $400s per month before subsidies — are “still too high,” even though the state caps provider reimbursement rates at 160 percent of what Medicare pays. She said that while providers have met that cap “pretty consistently,” that isn’t translating to lower premiums.

The state’s hospitals, meanwhile, are concerned by a new provider participation requirement aimed at addressing the fact that five of the state’s 39 counties don’t have public option plans available for purchase. The new requirement mandates hospital systems contract with at least one public option carrier in counties where there currently is no public option plan.

Washington state hospitals, meanwhile, are concerned by a new provider participation requirement aimed at addressing the fact that five of the state’s 39 counties don’t have public option plans available for purchase.