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A public option for health care is viable — DC should take note

Stefani Reynolds

In the endless debate about health care among politicians, the public option gets passing comment but not much in the way of serious discussion.

In 2010 when the Affordable Care Act was being considered, the House of Representatives passed their version which included a public option. The public option was to be created in each state to compete in the individual market place with commercial insurers. The theory was that the public option, without shareholders, would offer robust competition for private insurers to keep rates more affordable.

{mosads}Unfortunately, then-Sen. Joe Lieberman (D-Conn.) of Connecticut threatened to filibuster the bill unless the public option was removed, defending the private commercial insurers headquartered in his state. To get the ACA over the finish line it was agreed to drop the public option.

Therefore we have not seen whether the public option on a national scale would have provided the competition its advocates thought would help reduce health-care costs. However in one corner of the United States the public option as envisioned is thriving and providing competition for the benefit of consumers.

In Los Angeles County, Calif. there is a public health plan that was created in the 1990s under state legislation and a county ordinance to provide a non-profit public entity that would provide managed care health insurance to Medicaid beneficiaries. California, like the majority of states, have moved their Medicaid program, the public health insurance plan for people living and working in poverty, into managed care health plans as a way to control costs and measure quality performance.

We have been operating since 1997. When the ACA became effective in 2014 L.A Care applied to be offered on the ACA individual market exchange Covered California. The motivation was that people who became ineligible for Medicaid because their income exceed the maximum, 138 percent of the Federal Poverty Level FPL, might be in employment situations where there was no health insurance. Since Covered California offers subsidies under the ACA those people would be able to maintain their insurance at a very low cost.

L.A. Care entered the Los Angeles County market through Covered California competing against five established commercial plans that were household names. Fast forward to 2019 and my organization is now the largest of the six HMO plans available in Los Angeles County through Covered California with 86,000 covered lives. 

I welcome the competitive environment. I appreciated that I have to look over my shoulder to see what the commercial plans are doing so we can remain competitive. And I am sure my commercial counterparts are looking at L.A. Care with a wary eye now that we have moved up in market share. Competition is critical to innovation. I am concerned about single player or “Medicare for all” proposals because they imply a single public utility solution without the benefits of healthy innovative competition.

Let’s craft a solution for health care that is based on our shared values of equal opportunity for all and an even playing field for commerce, including health insurance.

We can do health care better in the United States. Winston Churchill once observed that the Americans will always do the right thing after they have tried everything else first. It is time to try the public option. It may be just what the doctor ordered.

John Baackes is the CEO of L.A. Care Health Plan, the nation’s largest publicly operated health plan serving over two million members. He currently serves on the boards of America’s Health Insurance Plans (AHIP), Medicaid Health Plans of America (MHPA), California Association of Health Plans (CAHP) and Local Health Plans of California (LHPC).

Tags ACA Affordable Care Act Health care ObamaCare

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