Washington state's public option - Launch is uncertain

May 20, 2020

In 2019, the Washington state legislature passed a public option plan, slated to begin in 2021. (here) The plan, called Cascade Care, would offer generous taxpayer subsidies to allow individuals to purchase government health insurance in the state’s Obamacare exchange.

As background, when Obamacare was debated in 2009, the idea of a public option in the Affordable Care Act Exchanges was championed by elected officials who wanted more government involvement in the health care system. A public option would compete with private insurance plans. Customers who would choose a public option would pay less in premiums and have smaller co-pays and deductibles. Tax payers would pick up the difference in costs between the public option and a private plan.

The public option was not included in the ACA because Republicans and many centrist Democrats saw it as a reach too far and too close to a single-payer system. As the country learned from Medicare, it is impossible to compete with the government. Today, Medicare is the only option for major medical health insurance for seniors and has driven private insurers out of the senior market.

As with any government entitlement, the important thing is to follow the money. The taxpayer subsidies in Cascade Care are much more generous than those in the original Obamacare exchanges. The question is what group of taxpayers would be responsible for providing that money?

Speculation is that the starting date of 2021 is designed around the hope that Democrats take over both Congress and the White House after the 2020 election. There is no way that a Republican Senate and White House would approve the additional funding for Washington state’s public option.

Even though Governor Inslee recently sent a letter of continuing support for Cascade Care to state health care officials, he admits that enacting the plan will be a multi-year endeavor. (here) Interestingly enough, Politico reported today that the state will take a “preliminary approach” and that the roll out for Cascade Care may take years. (here) The Inslee Administration is facing push back from hospitals because of lower payment rates and lack of participation by health insurers. The insurers are finding it difficult to build provider networks, again because of low reimbursement rates.

Bottom line, if the Democrats don’t take over Congress and the White House this fall, Washington state’s public option will undoubtedly not be funded by federal taxpayers. State officials will then need to decide whether to force the financial burden on Washington state taxpayers. That’s hard to imagine in the current economic climate.