Participation, Pricing, and Enrollment in a Health Insurance “Public Option”: Evidence From Washington State’s Cascade Care Program

Early View Original Scholarship State health policy US health care reform

Policy Points:

  • Policymakers considering introduction of a health insurance “public option” to lower health spending and reduce the number of uninsured can learn from Washington State, which offered the nation’s first public option (“Cascade Care”) through its state exchange in 2021.
  • This article examines insurer participation, pricing, and enrollment in the Washington public option. The public option was the lowest premium standard silver plan in 9 of the 19 counties in which it was offered.
  • Cascade Care is available solely through private insurers. Voluntary participation of these insurers and uncertainty about the willingness of providers to participate may have hindered greater premium reductions and enrollment in the public option’s first year.

Context: State and federal policymakers considering introduction of a health insurance “public option” can learn from Washington State, which established the nation’s first public option, with coverage beginning in January 2021. Public option plans were offered voluntarily by private insurers through the Washington Health Benefit Exchange and were subject to state-mandated plan design and payment requirements.

Methods: We used plan data from the Washington Health Benefit Exchange, linked to data from the US Census Bureau, the American Hospital Association, and InterStudy. We compared geographic availability and premiums of, and enrollment in, public option and non–public option plans, as well as characteristics of counties where the public option was available and counties where the public option was the lowest-premium plan.

Findings: At least one public option plan was available in 19 of 39 counties and was the lowest-premium option in 9 of the 19 counties where it was available. Five insurers offered public option plans, including one new entrant to the state and one new entrant to the Exchange. While public option availability was more common in counties where the Exchange was bigger and more competitive, public option plans had the lowest premium in smaller, less competitive counties. In the first year, 1% of enrollees selected the public option, in part due to automatic reenrollment of the majority of returning enrollees in their 2020 plan.

Conclusions: Public option plans offered a low-premium choice in counties that otherwise had fewer affordable plans, but voluntary participation of insurers and providers and accompanying uncertainty about participation hindered widespread and substantial premium reductions. States should consider tying public option participation by insurers and providers to other state programs and using decision support tools to promote active enrollment. Federal policymakers can support state efforts while considering establishment of a national public option.

Keywords: public option, uninsured, health care affordability, state health policy, insurance.

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Citation:
Sen AP, Sing Y, Meiselbach MK, Eisenberg MD, Anderson GF. Participation, Pricing, and Enrollment in a Health Insurance “Public Option”: Evidence From Washington State’s Cascade Care Program. Milbank Q. November 23, 2021. https://doi.org/10.1111/1468-0009.12546