November 24, 2020 | Updates

ICYMI: First Government-Controlled Health Insurance System Portends ‘Rocky Start’

WASHINGTON – In case you missed it, Bloomberg Law reports that a “government-run insurance system that would compete with private plans—augers a rocky start based on one state’s experience with such a scheme.”

Washington state’s first-in-the-nation program is resulting in higher premiums than private-sector plans in many instances, the opposite of what was forecast about a “public option” by proponents … The public option plans offered through Washington’s Affordable Care Act exchange cost as much as 29% more than traditional plans, based on the most popular type of policies, according to data from the Washington Health Benefit Exchange (WHBE0 … For 2021, public option plan premiums for 40-year-olds on the Washington Healthplanfinder exchange range from about $400 a month for nonprofit Community Health Network of Washington to about $463 a month from UnitedHealthcare of Oregon, which is 29% higher than the lowest cost silver tier plan, according to WHBE data. The prices are before any premium tax credits are applied.

… Most public option proposals intend to pay at Medicare rates, Nina Schaefer, senior research fellow with the conservative Heritage Foundation, said in an interview.  “The problem is you can’t get provider participation,” she said.  Washington had to increase payments to 160% of Medicare rates, raising premiums.  “That defeats the purpose of why they’re actually even offering a public option.”  Colorado and New Mexico have looked into adding a public option to their state plans, but they haven’t been able to get it over the line, Schaefer said.  

Vice President of Health Policy at the U.S. Chamber of Commerce Katie Mahoney confirms these findings, noting that despite promises that a public option would lower costs, Washington state’s “public option plan, ‘Cascade Care,’ is a more costly health coverage option than what consumers were paying for their private coverage.”  

  • Bloomberg Law previously reported, in a story titled “Public Option Experiment Hits Speed Bump as Premiums Don’t Fall,” that “[p]remiums aren’t dropping as predicted in Washington state’s first-in-the-nation experiment with offering health insurance plans based on Medicare rates.”  

High costs and unaffordable tax increases have doomed similar attempts to create one-size-fits-all government health insurance systems at the state level.  “More than 20 states have pursued the public option as a solution to the country’s cost challenges,” Maloney notes, adding that “despite assurances to the contrary, higher premiums are not the only repercussion.  We can expect this latest dangerous experiment to drive up significant costs for families covered through other avenues in Washington state and, eventually, those across the country, as a result … this new option is far from a silver bullet to reduce health costs and instead will likely make it harder for Americans to access health care services.


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