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59 Harv. J. on Legis. 145 (2022)
Are State Public Option Health Plans Worth It?

handle is hein.journals/hjl59 and id is 145 raw text is: ARE STATE PUBLIC OPTION HEALTH PLANS WORTH IT? JAIME S. KING,* KATHERINE L. GUDIKSENt, ERIN C. FUSE BROWN$ ABSTRACT The COVID-19 pandemic exposed the weaknesses of the U.S. health care system's reliance on private, employer-based health insurance. The crisis in health care access and affordability has increased support for a public option the choice to purchase a state-initiated health plan with publicly determined rates. Congressional gridlock, however, may dim the chances for a federal pub- lic option. States have stepped into the policy vacuum, proposing forty-nine bills to establish state public options since 2010, including three that became law. This article provides a comprehensive survey and taxonomy of state public op- tion proposals from 2010-2021, identifying three main models: (1) Medicaid Buy-In Public Options; (2) Marketplace-Based Public Options; and (3) Compre- hensive Public Options. Though each model serves different policy goals and varies in scope, the defining aim of all public option plans is to improve access to affordable health coverage by applying public payment rates to the private insurance market. We seek to answer whether state public option plans are le- gally viable and worth it for states to pursue. The answer is yes to both, but, surprisingly, the degree of legal difficulty is inversely related to the scope of the plan's reach the broadest plans have fewer legal hurdles than narrower plans. Moreover, the policy effects increase with the scope of the plan and the robust- ness of the controls on provider payment rates. Public options with modest pro- vider rate controls may have too little impact on affordability and costs, falling short of their defining goal of improving affordability. As a result, the legal and political difficulty of enacting such plans may not be worth it. State public option plans may be most effective when they cover a broad swath of the population and pursue robust provider rate controls. In short, for state public option plans to be worth it, bigger is better. TABLE OF CONTENTS INTRODUCTION ..................................................... 147 I. MEDICAID BUY-IN PUBLIC OPTIONS ... .................. 152 * Jaime S. King, J.D., Ph.D. is the John and Marylyn Mayo Chair in Health Law and Professor of Law at the University of Auckland, Senior Affiliate Scholar to the UCSFIUC Hastings Consortium on Science, Law and Health Policy, and the Executive Editor of The Source for Healthcare Price and Competition. The authors would like to thank Robert Beren- son, Allison Hoffman, Matthew Lawrence, Elizabeth McCuskey, and Lindsay Wiley for their helpful comments and insights. The authors also are grateful to Mark Hunter, M.P.H., Ph.D., J.D. and Alex McDonald, J.D. for their incredible intellectual contributions and research assistance. tKatherine L. Gudiksen, M.S., Ph.D. is a Senior Health Policy Researcher at The Source for Healthcare Price and Competition. $Erin C. Fuse Brown, J.D., M.P.H. is the Catherine C. Henson Professor, Associate Pro- fessor of Law, and Director of the Center for Law, Health & Society at Georgia State Univer- sity College of Law.

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