April 10, 2024 | Research

Persistent Failures in State Public Option Plans Raise Doubts About Ability of Future Proposals to Deliver on Promises 

As some state and federal politicians contemplate implementing unaffordable, new government-controlled health insurance systems like the public option, new research from Lanhee J. Chen, Ph.D., Tom Church, and Daniel Heil, on behalf of the Partnership for America’s Health Care Future, shows early adopters of the public option have struggled to fulfill their promises.  The report found that “for political and economic reasons, the early state adopters have failed to show this approach will work.” 



  • Washington State and Colorado have both failed to meet their respective premium target goals
    • After three years, only four of Washington State’s 39 counties have public option plans that have met the state’s premium targets for bronze-level plans; only one county has met the target for silver-level plans.  
    • In Colorado, only 15 percent of plans met the state’s initial-year premium targets, and even fewer plans met the state’s second-year targets.  
    • In 2022 and 2023, aggregate premiums for Washington State’s public option plans were $2 million more than if public option participants had chosen the lowest-cost non-public option. In Colorado, the figure was $13.3 million in 2023.   
  • Washington State, Colorado, and Nevada have failed to meet their premium targets in part because policy makers have been unwilling or unable to secure sufficiently low reimbursement rates
    • In Washington State, lawmakers hoped to set reimbursement rates at Medicare-level rates but settled on a statewide ceiling of 160 percent of Medicare-level rates. 
    • Colorado lawmakers enacted state-mandated floors on hospital reimbursement rates. In some cases, these floors have undermined previous successes by private insurers to secure lower reimbursement rates.  
    • While Nevada will not begin public option enrollment until 2026, an analysis of insurers’ payments to physicians and other medical providers suggests the state will not be able to significantly reduce provider reimbursement rates. Instead, achieving the state’s premium targets will require large cuts to hospital reimbursement rates and aggressive rules on insurers’ administrative costs. 
  • Minnesota state lawmakers hope to launch a state public option in 2027; however, estimates suggest that MinnesotaCare’s reimbursement rates are significantly below commercial providers.  
    • As a consequence, any significant shift in exchange enrollment to a MinnesotaCare public option would result in significant cuts to providers. 
  • Lawmakers’ unwillingness to accept these inevitable trade-offs has produced plans that have failed to attract consumers. This reality is evident in meager enrollment in the early states:   
    • Washington State and Colorado public option plans have enrolled less than one percent of their respective state populations. 
    • State-sponsored actuarial analyses of Nevada’s state plan suggest the public option will have little effect on total exchange enrollment, even if insurers meet the state’s aggressive premium targets. 


Data continues to show public option plans at any level fail to expand access to affordable, high-quality health care coverage. Lawmakers in Congress need to focus on solutions that build on and improve what’s working in health care, not start over. 


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