Lawmakers across the country are proposing legislation to stabilize the Affordable Care Act (ACA) insurance market, make coverage more affordable for consumers, and improve access to care by leveraging the bargaining power and administrative savings of public programs. Often referred to as “buy-ins” or “public options,” these programs vary in their design, depending on policy priorities and the market environment in which they are being implemented. This week, Manatt Health released a paper examining the federally sponsored and state-sponsored buy-in and public option models.
Federal Buy-In Proposals
Against the backdrop of increased calls for “Medicare for All” and single-payer healthcare plans, several Democratic House and Senate lawmakers introduced the “Medicare at 50 Act.” The bill would expand Medicare to a younger population than is currently eligible by allowing individuals ages 50–64 to “buy in” to the program. Enrollees would be able to purchase coverage on the Marketplace using ACA tax credits and cost-sharing subsidies, with premiums calculated to prevent financial risk to the existing Medicare program. Recent polling shows that a Medicare buy-in option for older Americans is popular, with 77% of people surveyed approving of the plan.1 Soon after its introduction, the bill garnered over a dozen cosponsors, but its passage in the Republican-held Senate remains unlikely.
In addition, Senators Brian Schatz (D-Hawaii) and Ben Ray Lujan (D-New Mexico) reintroduced the State Public Option Act. The bill would extend ACA premium and cost-sharing subsidies to buy-in and public option plans developed by individual states (see below for details) and provide federal match funding for state costs for administering the program (over and above premium and cost-sharing payments that the state collects)—as well as increased primary care provider payments in the Medicaid program nationwide. This proposal is an example of how federal legislation could support state-based innovation with additional authority or funding. Similar collaboration may be a pragmatic way to catalyze government-sponsored health reforms in the short term and may be an example for future national reform.
State Buy-In Proposals
Since the midterm election, 33 states have one-party trifecta control, improving the ability of state lawmakers to advance health reform compared to divided government at the federal level. To date, four states—Delaware, Massachusetts, New Mexico and Oregon—have completed studies evaluating state-sponsored coverage options that leverage state programs, like Medicaid, the Basic Health Program (BHP) and state employee health plans, to offer new, affordable coverage; and legislation for further study or implementation has been introduced in ten states so far this year, with additional bills expected. Notable recent activity includes:
- New Mexico. Last year, the state legislature passed a bill to study options for improving affordability and access for New Mexicans. An initial Manatt study evaluated four potential healthcare options, ranging from targeted and broad Medicaid buy-ins, a public option, to introducing a Basic Health Program. A subsequent Manatt study modeled the impact of the targeted Medicaid buy-in, focusing on consumers who are not currently eligible for subsidized coverage. Following release of the study, two companion bills have been introduced to implement the targeted Medicaid buy-in for 2021 coverage and to study the remaining three designs in more detail for potential future program expansion.
- Colorado. Following an initial study completed last year, sponsored by consumer advocates (for more information, see the Manatt Health report), two coverage bills have been introduced in the state legislature. The first calls for a detailed analysis and proposal for a state coverage option before the next legislative session. The second proposesa pilot program that would allow residents of high-cost regions to access the state employee health plan via a buy-in.
- Connecticut. In mid-February, the Insurance and Human Services Committees held an informational hearing on public healthcare options, including expanding eligibility for state employee health plans to small-business employers and studying a state public option.
- Delaware. Last month, Delaware released a final study group report evaluating state options to address healthcare affordability and access. The group assessed four options—raising Medicaid income eligibility, offering a lower-cost Marketplace-based insurance product, instituting a reinsurance program and extending state employee coverage to individuals. The group ultimately recommended pursuing a 1332 waiver for a state reinsurance program.
- Minnesota. Along with New York, Minnesota is one of only two states that administers a BHP—MinnesotaCare—a state-based health program authorized under the ACA that allows states to use federal funding to provide coverage to residents with incomes under 200% of the federal poverty line. A recently introduced bill proposes to implement a new buy-in program for all residents that leverages the MinnesotaCare benefit and administrative infrastructure. The bill would also authorize state agencies to prepare a federal waiver request to allow residents to use federal tax credits and for the product to be available on the Marketplace alongside qualified health plans. On Tuesday, Governor Tim Walz (D) also included a state-run platinum-level public option, called ONECare Minnesota, in his proposed budget.
- Nevada. After Nevada’s state legislature became the first to successfully pass a Medicaid buy-in proposal in 2017, then-Governor Brian Sandoval (R) vetoed the bill, citing the need for further study. This term, Assembly member Michael Sprinkle (D) plans to reintroduce the proposal. Details are forthcoming, but Sprinkle has indicated the plan will be similar to the previous broad “Medicaid for all”-style bill, saying, “any person that isn’t currently eligible for Medicaid can choose to purchase this plan” and that the plan “will be a mirror image of our current Medicaid program.”