As the U.S. is unlikely to adopt a single-payer “Medicare for All” program, supporters of health care reform were instead designed by a government that could compete with private insurance plans sold on medical exchanges. I turned my attention to the insurance plan. The idea behind this “public option” is that by making lower cost plans available to consumers, we can ultimately increase medical access.
However, the public choice plan, supported by Presidents Joe Biden and Barack Obama, went nowhere due to political opposition in Congress.
Some states are getting banners and creating their own public option plans. But they too face formidable opposition from healthcare institutions that are resisting the pressure to reduce back-end costs so consumers can pay cheaper.
Washington learned an important lesson in the second year of offering the country’s first public health insurance plan. If you want to be in the hospital, you probably need to force it.
Washington’s public options are like a public-private partnership. This plan was designed by the state but is provided by a private insurance company. Anyone who buys their own insurance in the state health insurance market can sign up for a public option plan and, depending on their income, receive large subsidies from the federal government to reduce costs. But two years later, the plan was only available in 25 of the 39 counties in the state, with overwhelming registrations and state leaders blaming hospitals.
“We had a hard time putting together a plan because the hospital wasn’t working,” said Irene Cody, a Washington state legislator who submitted a bill for elections in 2019. .. “
Officials from the Washington State Hospital Association said more hospitals voluntarily participated in public selection plans than they did not. However, they said public options rely on reducing hospital payments to manage costs and link reimbursement to Medicare fees that do not cover the costs of hospitals providing medical care.
“If patients choose to take out public option plans rather than private insurance, over time, financial challenges can arise, especially for small, low-margin rural healthcare providers.” Said Chelene Whiteaker, Senior Vice President of Government for the Hospital Group. ..
Last year, the legislature voted to require hospitals to contract with public option plans in 2022 if public option plans are not available in each county. That obligation will come into effect in 2023.
Other states currently considering public options are learning from Washington’s challenges. Colorado and Nevada are implementing public option plans for 2023 and 2026, respectively, and have already adopted ways to force hospital participation. Other states that are considering public options, such as Connecticut, Oregon, New Jersey, and New Mexico, may follow suit.
“One of the things the state has learned is that hospitals cannot be voluntary to attend,” said Erin Hughes Brown, director of the Law, Health and Social Center at Georgia Legislative University. I am saying. “Otherwise, there is no way to give public choices a chance. We will never build a sufficient network.”
Washington’s public options were designed to save consumers money, primarily by reducing the amount paid to hospitals and doctors and capping 160% of the amount Medicare pays for those services. .. By comparison, health insurance paid healthcare providers an average of 174% of Medicare fees.
Public option plans are available to everyone and are offered in the same gold, silver and bronze tiers as the health insurance exchange’s private plans. Proponents estimate that the cap will give you a public option plan with a premium that is 5% to 10% lower than the exchange’s traditional plan. However, public option premiums are on average 11% higher than the lowest silver plan premium available in each county on the market in 2021, and public option plans are the lowest premium in just nine counties. It was a silver plan. The Silver Plan covers about 70% of medical expenses on average. Only 1% of people who buy a plan on the exchange chose the public option plan in 2021.
The premium for public options in 2022 is about 5% lower than the premium for public options in 2021. The number of registrations this year has not been finalized. The state is waiting to see how many people have completed the process by paying premiums. ..
“We know that premiums drive registration decisions,” said the director of policy solutions for the United States of Care, a nonprofit advocate for improved access to health care. One Liz Hagan said. “People often see nothing but premiums. They rarely see out-of-pocket costs.”
However, exchange officials say that knowledgeable consumers are aware that public option plans are cheaper in the long run. Compared to traditional exchange plans, the amount of deduction is small and many services that are not deductible are provided.
Michael Merchand, Chief Marketing Officer of the Washington Health Benefits Exchange, said: “But we have a lot of people who are much smarter about how they price something.”
Merchand also said it may take several years for new products such as public option plans to reach the market. The insurer may have raised the price of the plan a bit in the first year, not knowing what to expect. Now, in a year under their belt, they have lowered their insurance premiums somewhat.
The stumbling block from the Washington Gate reflects the difficulty of lowering medical costs while working within the current system. Legislators initially wanted to lower payment rates to hospitals and other healthcare providers, but raised the bill’s cap to prevent hospitals from opposing the bill. Currently, it is unclear if the payment limit is low enough to reduce premiums.
“It’s a big trade-off,” said Aditisen, a health economist at the Johns Hopkins Bloomberg School of Public Health. “You’re trying to lower your premiums enough for people to register, but not so much that your provider doesn’t participate.”
This poses a challenge for state or federal public option planning. There are many ways to reduce your insurance premiums. Hospitals, doctors and other health professionals are strongly opposed to lowering payment rates, while insurance plans are rejecting plans that can eat up profits.
Plans can reduce the size of the provider network and save money, but consumers hate plans that limit what doctors can see. Public option plans may rely on existing public health programs such as Medicare and Medicaid. While these programs already pay lower rates than commercial insurance, government-run insurance plans have negative implications for many consumers.
In 2021, Sen and her colleagues discovered that the county in Washington, where the public option plan was located, was primarily in areas where hospital and doctor payment rates were lower than in other parts of the state. This could have allowed insurers to network and limit provider payments to less than 160%.
Five of the 12 private insurance companies that sell plans on the exchange offer public option plans.
An insurance company that previously offered plans in Washington was able to build a network based on existing contracts with hospitals and doctor groups. However, the two new entrants to the Washington Exchange had to start from scratch and negotiate prices with their public option plan providers. Some insurance companies have tried to offer plans for public options in other counties, but have been unable to convince hospitals, especially hospitals with large hospital systems, to accept the charges.
In Washington, the COVID-19 pandemic began to increase enrollment in public option plans during a special enrollment period that began in mid-2021. The American Rescue Planning Act also provided more grants and made all exchange plans more affordable. However, these subsidies will expire at the end of the year unless Congress votes to extend them. The Biden administration’s Build Back Better bill includes an extension, but Congress is stuck.
Washington legislators have approved other moves to make public options more affordable. They have secured $ 50 million in state subsidies, but authorities still have to decide how to allocate those funds. And lawmakers allowed the state to pursue an exemption from the federal government that could allow the state to maintain more of the savings achieved by lowering premiums. Low premiums now mean less federal subsidies. The state can request that those savings be passed on to consumers.
Washington did not pursue such an exemption before implementing the public option plan, but many believe that the Biden administration may be more submissive to such demands than the Trump administration.
State developments on public option planning are a disappointment among many progressives that Congress did not implement federal public options under affordable care laws to compete with private plans in the market. It happens in.
Washington state officials understand that since they first implemented the public option, other states are watching them carefully to see how it works. “We’re not the only ones, but we’re the furthest,” Cody said. “Others can learn from our mistakes.”
KHN (Kaiser Health News) is a national news room that produces detailed journalism on health issues. KHN, along with policy analysis and polling, is one of three major operational programs: KFF (Kaiser Family Foundation). KFF is a donated non-profit organization that provides the public with information on health issues.
