Model State Legislation for Authorizing a Public Option Program
The following is intended to serve as a template by which states can consider the key components of potential legislation to authorize a public option program. While there are many potential interpretations, we define a public option program as the introduction of a new form of health insurance coverage that presents an alternative to existing commercial plans and includes a stronger government role in oversight and administration, with the goal of expanding access to quality, affordable coverage.
We recognize that states will modify the language recommended here to better suit their particular policy goals, health insurance and health care markets, and the needs of their resident consumers.
Briefly, we recommend that the legislation address these following factors regarding a public option program:
Advisory Board: The model legislation includes the authorization of an Advisory Board that would work alongside the [State Health Department] to design, implement, and operate the public option program.
Carrier(s): Administration could be contracted out to commercial carriers operating in the state or issued by the state itself. If the plan will be administered by commercial carriers, states should specify whether public option plans will be issued by one health insurance carrier or multiple carriers.
Impacted Markets: States should specify in which insurance markets the public option will be available.
Reimbursement Rates: States should determine how providers and suppliers should be reimbursed by the public option plan(s).
Provider and Carrier Participation: States should consider the degree to which they will require or incentivize providers, insurance carriers, and drug and device manufacturers to participate in the public option program.
Program Financing: The template includes a section for states to consider any financing mechanisms that may be required to fund the public option program’s operations, including both administration costs and potential new subsidies or other benefits furnished to consumers.
The model legislation can be download here.
With Support from Arnold Ventures