ICYMI: Public Option Reforms Aren’t Working for States 

WASHINGTON, D.C. – Evidence from Washington State and Colorado shows that state government-controlled public option systems are not working as initially intended. In her latest op-ed, Pacific Research Institute President and CEO Sally Pipes points out that state public option systems in Colorado and Washington offer a cautionary tale to those looking to replicate the proposal on both the state and federal levels.    

• “In its purest form, the public option is a government-run health plan that competes alongside private alternatives in the marketplace. But some states are turning to private insurers to run publicly chartered plans.”  
• “The public option Colorado implemented last year requires all private insurers to offer at least one policy that meets certain government standards — a plan design lawmakers have dubbed the ‘Colorado Option.’”  

• “In effect, Colorado lawmakers have envisioned their ideal health plan — as well as their ideal premium levels — and forced private providers to manifest this fantasy, regardless of whether the Colorado Option is economically feasible.”  

• Washington state, “contracted with only five insurers, each of which agreed to offer “Cascade Select” plans that met stringent government requirements, including an aggregate limit on payments to providers.  

• “Providers balked at the public plans’ meager reimbursement rates and refused to participate in their insurance networks. So less than half of counties were able to offer Cascade Select plans in 2021.”  

• “The implicit goal of all these public option plans is to nudge aside private insurance — until the state-chartered plan dominates the market.” (Newsmax, 04/10/23) 

Polling continues to show that 67 percent of American voters prefer building on our current system, rather than creating unaffordable new government-controlled health insurance systems like the public option, and 76 percent of voters are unwilling to pay more for health care to create a new government health insurance system. Instead of starting over by creating unaffordable, new government-controlled health insurance systems like the public option, lawmakers in Washington should focus on building on and improving what’s working in health care. 

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