SPEED READ:
- Washington Gov. Jay Inslee signed the nation's first "public option" bill.
- Similar legislation is pending in 10 other states.
- Some states may need the federal government's permission.
Colorado and Washington state both passed legislation in April that could offer a new health insurance option to people who make too much money to qualify for Medicaid but not enough to afford private health coverage.
Most Medicaid recipients pay no premiums, but the idea of letting some people buy a form of Medicaid is gaining steam.
The public option was first introduced in Nevada in 2017 at a time when Congress seemed poised (yet ultimately failed) to repeal the Affordable Care Act and leave millions of people without health coverage. The state legislature passed a bill that would have let anyone buy publicly run insurance. It was vetoed by then-Gov. Brian Sandoval, but similar proposals have since been introduced in states across the country. In addition to Colorado and Washington, legislation to study or start a public option or Medicaid buy-in program is currently pending in Connecticut, Maine, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey and Oregon.
No state, however, has pushed the proposal further than Colorado, where the bill has been sent to Gov. Jared Polis, or Washington, where Gov. Jay Inslee -- a 2020 candidate for president -- signed the bill on Monday. The expansion of public health insurance is a key talking point among Democrats running for president -- several of whom have endorsed a "Medicare for All" bill in the U.S. Senate.
"It’s a landmark move, and [states] are a great testing ground to see how much the public option can reduce costs," says Tara Straw, a senior policy analyst for the liberal Center on Budget and Policy Priorities.
According to a survey by the United States of Care, a significant majority of voters -- Democrats and Republicans -- support Medicaid buy-in. Advocates believe a public option could offer a lower-cost alternative to the health-care marketplace and spur enough competition to lower premiums overall. Critics, including the insurance industry, argue that introducing a public option would force private insurers off the marketplace, resulting in fewer options for care.
"Introducing the concept of a public cure for what is broken in Obamacare seems hypocritical," Jim Smallwood, a Colorado state senator and insurance broker, told the Associated Press.
No two of the proposed Medicaid buy-in bills are the same.
Minnesota's would allow people to sign up for Medicaid if they don't qualify for tax subsidies on the exchange or live in a county with only one plan.
Washington's will have the agency that runs Medicaid contract directly with at least one private health insurer to offer a "qualified health coverage" plan that meets Affordable Care Act standards on the state’s marketplace. It will expand subsidies to people making up to 500 percent of the federal poverty line, or $62,450 a year, for a single person.
Colorado’s bill, on the other hand, is lighter on details. It directs the state’s departments of Health Care Policy and Regulatory Agencies to draft a public option that would compete with private insurance plans. It's unclear whether this public option would be sold on or off the marketplace and whether it would offer subsidies. Some say the subsidies are key.
"If you don’t offer tax credits, I don’t think there’s a super good chance for them to be competitive," says Emily Johnson, director of health policy analysis at the Colorado Health Institute.
Subsidies aren't the only element of Medicaid buy-in that states would have to decide. There are many other questions surrounding eligibility, benefits and whether the federal government would greenlight their plans. If states want to offer federal tax subsidies, they may need the federal government's permission to implement Medicaid buy-in. Washington, however, won't need its approval since the state would contract with a private insurer. While the head of the Centers for Medicare and Medicaid Services, Seema Verma, reiterates that she wants to give states more health-care flexibility, she has publicly lambasted "Medicare for all."
Colorado's proposal is due by November. Some observers commend the state's "pass first, figure out the details later" tactic.
"It’s a smart approach to complicated policy," says Straw. "It’s understandable they want time to figure out what’s going to work best."
Both Colorado and Washington have a blue trifecta -- Democratic governors and majorities in the House and Senate. It's a level of power that Democrats have only had in Colorado since November.
"This is the year to do stuff like this," says Johnson. "Also our bill is the study of the state option, not the actual design of the state option, making it a bit easier to pass."
