This text comes from Delegate Ibraheem S. Samirah, who has sponsored HB5083, which would add a public option to Virginia’s health insurance marketplace:
Researching the Costs Associated with Implementing a Quality, Affordable Public Option for Virginians
It’s no secret that extremely high healthcare costs are hurting Virginia’s working families, specifically their public health. While Medicaid expansion has been a crucial relief of that burden for those families making under 138% of the income Federal Poverty Line, there are still thousands of Virginians who fall into the coverage gap between qualifying for Medicaid or Medicare and private insurance, and millions more who are paying too much for their healthcare coverage. As proof of this healthcare crisis, last year 25% of Virginians said they or a family member had to skip out on serious medical care because they couldn’t afford it. This was before we had an economic recession and possibly economic depression become the reality of our economies as a result of a healthcare pandemic that has already taken the lives of close to 150,000 Americans. That is unacceptable, especially if Virginians are skipping out on treatment in the midst of a national Coronavirus pandemic. While I have not had as much time in the legislature as every legislative member focused with me, here, today, as a medical practitioner I know firsthand how many Virginians are skipping out on treatment every single day because the cost of treatment is too high.
This was true before a global pandemic that has caused both an economic and public health crisis.
Roughly 200,000 Virginians have lost their employer based health insurance, leaving them without coverage in the midst of a crisis. These Virginians come from disproportionately low-income backgrounds, and also are disproportionately Black and Brown. Some of these families will qualify for new plans under Medicaid, but too many won’t. These families will struggle to find affordable options despite the best efforts by the Affordable Care Act, and if they are given a COVID diagnosis will have to make the choice between care or financial ruin. One health analytics organization estimates that the typical cost of a COVID hospitalization is $23,500, while another estimates that a cost for a six-day stay with complications averages $74,000.
This high cost has led to billions made by private insurance on the backs of our citizens. It is a sad and strange reality when 170,000 dead Americans result in insurance companies doubling their profits. This dissonance between the for-profit system and the public health reality on the ground speaks to how broken our system is.
A Public Option would provide truly-affordable insurance coverage for any Virginian.
It would direct DMAS to set up new health insurance plans that would be available to any citizen of Virginia who is not already eligible for Medicare or Medicaid. The plans would be contracted with private administrators, or administered by the state, and purchased on the individual healthcare marketplace, similar to the process already in place in Virginia. Reimbursement rates for providers would be set at Medicare rates for the plans.
A Public Option would offer cost-saving plans without the need to raise taxes.
These plans would be paid for just like all other individually purchased coverage: with premiums, deductibles, and co-pays that are paid by patients. However, by setting the plan’s reimbursements at Medicare rates, we are ensuring a highly affordable price for Virginians. That’s because, as a recent report from RAND shows, reimbursement rates for private health insurance plans are, on average, about 250% of the reimbursement rates for Medicare for the same services. That represents a potential to save big without requiring any new taxes.
It is a falsehood that plans with Medicare rates present a catastrophic financial danger to providers.
Kaiser Health and Politifact rated claims that accepting more plans with Medicare rates would shutter hospitals and other providers as “false.” They also write: “Hospitals that treat a large number of uninsured patients…would probably increase their revenue under [a] new system because they would no longer face the financial pressure of uncompensated care.” While some approaches to administering a Public Option insurance plan in the marketplace preserve a role for duplicative private services, other approaches remove the private sector’s role in the administration of a Public Option. My study suggestion would examine these differences and their financing implications by directing the Joint Commission on Health Care study the financing options for and benefits for Virginians from pursuing varying pathways to administering an affordable Public Option health coverage plan into our Virginian marketplaces. This would put to bed the misguided response to proposed plans: “how are we going to pay for it?” We would finally have our answer coming directly from our esteemed researchers at the Joint Commission on Healthcare.
We can and should look at other states.
Establishing a Public Option was a well-researched health insurance proposed plan to solve our un-and-underinsurance woes under the original Affordable Care Act bill proposition pushed by the then newly-inaugurated President Obama in 2009. Corporate greed ultimately got its way in the process of moving the bill along through congress, and so the Public Option component was taken out. It is now Democratic Presidential nominee VP Joe Biden’s plan for health insurance reform if he is elected President and if both the federal congress has enabling majorities for such Public Option mandate.
Washington state has achieved this goal at the state level, signing legislation into law a new Public Option healthcare plan using this same model. They ultimately fell on rates that were higher than Medicare but still cheaper than the average private rate. Virginia should aim for true affordability by not accepting rates that are higher than Medicare.
Establishing a Public Option was a well-researched health insurance proposed plan to solve our un-and-underinsurance woes under the original Affordable Care Act bill proposition pushed by the then newly-inaugurated President Obama in 2009. Corporate greed ultimately got its way in the process of moving the bill along through congress, and so the Public Option component was taken out. It is now Democratic Presidential nominee VP Joe Biden’s plan for health insurance reform if he is elected President and if both the federal congress has enabling majorities for such Public Option mandate. Lastly, it is worth noting that a Public Option plan is also the first step towards implementing a Medicare for All plan if one were to be pursued on a federal or state level.