Washington Gov. Jay Inslee (D) on Monday signed a bill making Washington the first state to approve the creation of a state-based “public option.”
The bill, S.B. 5526, enables the state to offer additional qualified health plans (QHPs) through its individual insurance marketplace beginning in 2021. The new law requires the state to contract with one or more insurers to offer QHPs that meet state-established quality and affordability standards. The state also must devise a plan to fund health insurance premium subsidies for people earning less than 500 percent of the federal poverty level (just above the threshold for federal support) to limit individuals’ premium contribution to 10 percent of their income.
Notably, the state legislature increased payments to health care providers under the legislation before its passage to address reimbursement concerns. Under the final version of the legislation, primary care providers will be paid at 135 percent of Medicare rates, but caps aggregate reimbursements to providers at 160 percent of Medicare (excluding prescription drug costs).
Similar public option proposals in other states have faced financial and political roadblocks, causing the states to narrow their approaches. For example, Colorado recently passed legislation requiring state officials to present a plan to offer a public option by November 2019, and New Mexico’s legislature agreed to fund a study on a Medicaid buy-in option.
Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.
