When the U.S. Supreme Court rejected in June the latest challenge to the Affordable Care Act, it was widely regarded as an end to efforts to dismantle the landmark law. Instead of ‘repeal and replace,’ many lawmakers started talking about efforts to ‘expand and improve’ the ACA.
Sen. Patty Murray, D-Wash., and Rep. Frank Pallone Jr., D-N.J., are working on legislation to establish a nationwide public option for health coverage that could lower costs and give millions more families across the country access to affordable, quality health care. And with 20 senators reintroducing legislation late last week to create a new Medicaid-based public option, access to care is clearly a top priority for policymakers in Washington.
A public option was included in the original ACA legislation the House passed in 2009 but, sadly, didn’t make it into the final bill. It’s time to bring it back. Sixty-eight percent of Americans support a public option, including a majority of both Democrats and Republicans. The public option can provide commercial plans with the competition that will ensure affordable premiums, as well as equity in care. The COVID-19 pandemic exposed the inequities in the U.S. health care system, and we must do everything possible to correct that.
L.A. Care Health Plan, the nation’s largest publicly operated health plan, serving more than 2.4 million members in Los Angeles County, has a unique perspective on how to implement a successful public option. After all, L.A. Care is a real-life example of a public option that has been operating successfully on California’s ACA exchange since 2014, and it remains the only public plan to do so.
After launching in 1997 as a Medicaid plan, L.A. Care joined the ACA exchange for two reasons.
First, we wanted to provide the competition that would mean more access to affordable health care coverage for people in Los Angeles County, and we have succeeded, offering the most affordable rates for most years. In an attempt to compete, some of the commercial plans lowered their rates, but L.A. Care remains among the most affordable plans on the exchange. I consider this a huge win of the public option — providing the healthy competition to commercial plans that keeps rates affordable.
Second, we wanted to offer continuity of care for members with fluctuating incomes. We have seen more than 33,000 of our members move from our marketplace plan to our Medicaid plan, or vice versa — the so-called churn population. These people were able to retain their providers and maintain similar coverage despite the move.
Skeptics argue that the L.A. Care public option model has not reduced medical costs. My response is that it’s better to offer comprehensive health care coverage than have uninsured individuals, whose only option is to seek care in an emergency room or other urgent care facility. Over time, access to preventive care has the potential to improve health outcomes instead of treating diseases at a late, emergent state. Other critics have suggested that providers in a public option system would be paid ridiculously low rates, but L.A. Care has invested in recruiting more doctors into our network and has negotiated capitated rates in line with Medicare rates to satisfy providers, all while keeping premiums affordable.
L.A. Care is proving that a public option can increase consumer choice, offer access to a large provider network and ensure rates remain affordable, while competing on a level playing field with commercial plans. We meet all the same requirements as other plans on the exchange. There is no special treatment just because we are a public entity. One advantage is that we are a not-for-profit public entity, and thus we have no shareholders to appease.
As Murray and Pallone work on their legislation, we made clear to them through public comment that localization is critical in a federally administered public option. The L.A. Care model is workable for much of the nation, but certain local conditions might call for an alternative and could require geographically adjusted premium rates. It’s also important to develop a federal public option in such a way that consumers can continue to take advantage of both federal and state premium assistance options.
As we celebrate the Supreme Court’s decision to once again uphold the ACA, preserving health care coverage for more than 31 million Americans and critical protections for preexisting conditions, we can now focus on making the law even better.
There is absolutely no reason the wealthiest nation in the world can’t ensure that every resident has access to affordable health care. There is also no reason that commercial plans and public options can’t coexist. Providing the choice of a public option is a step closer to addressing broader health care system reforms that are needed to correct health inequities nationwide.
It is my hope that Murray and Pallone take a good look at L.A. Care and use it as a model for successful public options all across the country.
John Baackes is the CEO of L.A. Care Health Plan, the largest publicly operated health care plan in the U.S., serving more than 2.4 million members in Los Angeles County.