For the last several years a debate has raged in some circles that the nation needs a government option health insurance company. To better define it for those that don’t understand the term, a government option is a health insurance company run by the government.
After all — proponents crow — government doesn’t have to show a profit, so it can do the health insurance thing more cheaply than for-profit insurers. That means consumers will spend less on premiums.
At least that’s the theory and one that the federal government and eight states have looked at. Proposals have been made, debates have been done but nothing has happened.
Washington State is about to test the government option theory. The Legislature passed a bill creating one and Governor Jay Inslee has signed the action into law. It is called Cascade Care and several plans will be offered within a tiered system. They are expected to be 10% cheaper than a comparable private insurance plan.
Plus, the plans will be available to everyone in Washington by 2021 regardless of income.
The good news for insurers is the Washington public option guarantees them a role in health insurance in the state. Private insurance companies — who will provide rate caps of about 160% of Medicare rates — will administer the plan. That saves the state from having to create a bureaucracy to run the program.
A Seattle Democrat, Sen. David Frockt is the author of the bill that created the system. He said doing the hybrid was a compromise with insurers and was needed to get the job done. “What's important about this plan is that the government is coming in and taking a more aggressive role in regulating the cost drivers of health care," Frockt said.
University of Washington Professor Aaron Katz teaches health policy and is considered an expert on health care markets. He said, “It’s an attempt to keep the insurance companies in the game.” And Katz noted, having insurance companies in the game means once it is set up, the government option is not likely to ever go away.
“The size of the business that we are giving to private insurers makes it ever more difficult to ever extract ourselves from those dependencies,” he said.
Another plus — proponents say — is the hope that doctors, hospitals and other health care providers will accept lower rates because the state has the purchasing power to send them more patients. The savings the state gets from those lower rates means they can sell plans at a competitive price.
But again, that’s the theory.
Source link: OregonLive.com