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What states mean by a 'public option'

Michael Ollove, Stateline.org on

Published in Health & Fitness

WASHINGTON -- When Democratic Gov. Jay Inslee last month signed a law creating a new health plan alternative for Washington state residents, many accounts proclaimed Washington to be the first state with a "public option."

But the term is difficult to define -- even the word "public" is slippery in the context of health care.

"Public option means the government being more prescriptive," said Chiquita Brooks-LaSure, a managing director at Manatt Health, which provides consulting and legal services in health care. "There's more of the state weighing in."

In general, when policymakers use the term "public option," they mean a health plan with significant government control. That might mean programs created and operated by government, as Medicare and Medicaid originally were, or programs largely under government control but run by private entities.

Public option is a "squishy term," said JoAnn Volk, a research professor at Georgetown University's Center on Health Insurance Reforms. "It does mean different things to different people, depending on your goals and assumptions."

Whatever form it takes, proponents of a public option believe it would provide consumers with health insurance that is more affordable.

 

Jason McGill, a health policy adviser to Inslee who helped craft the law, noted that the term "public" in health care has already become muddied in recent years. Medicare Advantage plans -- all-inclusive Medicare plans -- are offered by commercial insurance carriers, and states contract with insurance companies to run their Medicaid managed care plans

"They are government plans," McGill said, "but they are run by insurance companies."

Washington state won't be operating its own health plan. Instead, it will contract with a private carrier -- or several -- to oversee its public option, which will be on the health insurance exchange alongside commercial plans.

The Washington state plan also will have another layer of rules that officials think will lower premiums. Most notably, the public option plan would set a cap on reimbursement rates paid to providers.

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