Failed State Government Option ‘Resulting In Higher Premiums’

HARTFORD, Conn. – As some Connecticut lawmakers push for the creation of a new state government-controlled health insurance system known as the state government option, the failure of similar proposals in other states serves as a warning of the unaffordable costs and other potential negative consequences for Connecticut residents.
Writing at Forbes, the Pacific Research Institute’s Sally Pipes points out that Washington state “became the first in the country to create a public option in 2019. But the rollout of ‘Cascade Care’ hasn’t gone as well as proponents hoped. This year, its first in operation, premiums were higher than the average private exchange plan.” Pipes adds that “[m]any providers have refused to accept the plan, given its low reimbursement rates.”
Previously, Bloomberg reported that a state “government-run insurance system that would compete with private plans—augers a rocky start based on one state’s experience with such a scheme.”

Washington state’s first-in-the-nation program is resulting in higher premiums than private-sector plans in many instances, the opposite of what was forecast about a “public option” by proponents… The public option plans offered through Washington’s Affordable Care Act exchange cost as much as 29% more than traditional plans, based on the most popular type of policies, according to data from the WashingtonHealthBenefit Exchange (WHBE) … Most public option proposals intend to pay at Medicare rates, Nina Schaefer, senior research fellow with the conservative Heritage Foundation, said in an interview.“The problem is you can’t get provider participation,” she said.Washington had to increase payments to 160% of Medicare rates, raising premiums. “That defeats the purpose of why they’re actually even offering a public option.”

An analysis by the U.S. Chamber of Commerce confirms these findings, noting that despite promises that a public option would lower costs,Washington state’s“public option plan, ‘Cascade Care,’ is a more costly health coverage option than what consumers were paying for their private coverage.”
Similar attempts to create one-size-fits-all government health insurance systems at the state level have also failed due to unaffordable costs and tax increases. “More than 20 states have pursued the public option as a solution to the country’s cost challenges,” the Chamber notes, adding that “despite assurances to the contrary, higher premiums are not the only repercussion. We can expect this latest dangerous experiment to drive up significant costs for families covered through other avenues in Washington state and, eventually, those across the country, as a result … this new option is far from a silver bullet to reduce health costs and instead will likely make it harder for Americans to access healthcare services.” 

  • To learn more about Connecticut’s Health Care Future, CLICK HERE.