Washington state’s Public Option and President Joe Biden’s proposed Public Option

Washington was the first state in the nation to implement and sell state-procured public option (Cascade Select) health plans; plans that are similar in many respects to those being proposed at the federal level by President Joe Biden. Both the Washington Public Option and Biden Plan build on the existing Affordable Care Act (ACA) framework, adding new health plans for sale in the individual market. Washington’s public option plans were procured as part of a Request for Applications (RFA) process and will be sold on the Exchange beginning in 2021. Washington’s public option plans are all Qualified Health Plans (QHPs) that must meet additional quality and value requirements. The plans must also meet provider reimbursement requirements established in RCW 41.05.410, including a statewide aggregate cap on provider and facility reimbursement at 160% of Medicare rates.

President Biden has proposed enacting a nationwide public option plan, which would build on the existing ACA structure to offer coverage through private insurance companies, like the framework in Washington. While Washington utilizes reimbursement limits in statute to attempt to lower costs, the Biden plan would negotiate prices from hospitals and other providers utilizing the model employed by the federal Medicare program. Biden’s plan would also extend premium-free access to health coverage for low-income adults who would be eligible for Medicaid under the ACA’s eligibility expansion, but live in a state that has not yet expanded coverage. Washington state is one of 39 states (including Washington D.C.) to have expanded Medicaid coverage, meaning these low-income adults already receive premium-free health coverage in our state.

President Biden and Washington have also both proposed increasing financial assistance to the individual market, building on top of the ACA’s advance premium tax credit and cost-sharing reduction programs. The Biden Plan would increase the generosity of these existing federal subsidies by lowering the limit on the cost of coverage to 8.5% of a household’s income, extending the subsidies to all households purchasing coverage through an exchange (currently limited to individuals earning under 400% FPL), and by benchmarking the subsidy amounts to the price of a Gold plan (currently benchmarked to the price of a Silver plan). More information on the subsidy structures that have been analyzed in Washington can be found below.