California’s Senate has passed a bill to study the possibility of a public option on Covered California, their state run exchange:
BREAKING: California Senate passes #AB2472 (@JimWoodAD2) on a 26-10 bipartisan vote. The bill directs a new CA Council on Health Care Delivery Systems to do a feasibility study of a #PublicOption in #CoveredCA & the state health insurance market. #CALeg https://t.co/jCImpoIGqw
— Health Access CA (@healthaccess) August 22, 2018
Study is needed as this is a big honking deal.
The biggest question that has to be answered in this type of study is a simple one. What problem is the potential public option trying to solve?
This is a critical question.
Emma Sandoe and I outlined the evaluation framework for potential Medicaid buy-ins last March. We thought there were several different types of questions that a Medicaid buy-in could solve but some of those questions are in direct conflict with each other.
- Improve choices on the exchange
- Lower non-subsidized premiums
- Provide better post-subsidy premiums
California has numerous Medicaid like insurers on their marketplace. Covered California aggressively manages the Silver Gap which means in most regions, there is only a single Medicaid insurer offering a single Silver plan with a significant Silver Gap. Adding another Medicaid like insurer or even a Medicare Advantage like provider in terms of what it pays hospitals and doctors will significantly compress the Silver spread. In regions without a narrow network, low premium insurer, a Medicare Advantage like insurer might be able to take the least expensive Silver position and rejigger the Silver spreads.
The challenge for the study and for California policy makers is identifying what problem they are trying to solve and then lining up the trade-offs that a public option at either Medicaid-esque or Medicare-like rates would generate.