California workers face a growing health care affordability crisis. Insurance costs for families have risen more than two and a half times faster than wages, putting health care out of reach for more and more people. The gap is even larger for the state’s black and Latino populations.
Part of the solution lies in reach: States should introduce a public option to compete with private insurance plans and lower premiums. California is uniquely suited to pioneer this approach and has strong evidence that it will work.
President Biden A public alternative proposal Health insurance plans to increase competition and lower costs, but gridlock in Washington and a lack of congressional support have shifted the development of a public option to the states,”Laboratory of Democracy“There is Washington an implementedwith Little success Up to date to achieve enrollment or premium reduction.
we are Propose a public option for California What we call the Golden Choice, will take a different approach. It is based on the paying capacity of the state’s integrated medical groups High quality care at low cost By receiving monthly revenue per enrollee, a payment system known as capitation. The figure will be adjusted for each patient’s age, sex, health status, and related characteristics that may influence care needs. This model incentivizes health care systems to keep participants healthy and manage illnesses through strong primary care and close coordination with specialists.
Our research indicates that health insurance premiums based on this model of care would be the lowest in 14 of 19 regions for the California insurance market. Individuals who switch from their most affordable option now will save $1,389 a year in premiums through state public option plans. Our work also looked at how the public option would fare if offered by the California Public Employees Retirement System, and we found that premiums would be lower than premiums in 9 out of 10 HMO plans now offered to members.
California already has some experience with a public option: LA Care in Los Angeles County This county-based public plan has been listed on the state’s insurance exchange since 2014. Our research team found that LA Care has lower premiums A competitive effect In the market, prices are falling. Premiums for other plans have declined, and LA Care’s enrollment grew by more than 125,000 last year. Estimated savings due to this public option were $345 million as of 2022. This decline in premiums has not occurred in the rest of the state, which does not have a similar plan. (LA Care has been faulted for treatment delays, but says the problems reflect a systemic problem with payment rates.)
In 2024, Inland Empire Health Plan, another county-based plan, is set to enter the Riverside/San Bernardino area with the lowest premiums.
County plans are a valuable force in the market, but the Newsom administration has an opportunity to make insurance more affordable on a larger scale across California. This is an achievable goal.
A statewide public option would require little or no new funding from the state. Department of Managed Health Care already controlled Educated medical group. We recommend that the state establish an Office of Public Option so that the 18 million commercially insured Californians and the uninsured are able to share the benefits of a public option – especially lower premiums. The office will organize, implement and promote public options statewide.
The Newsom administration has evidence it needs to move forward. Such initiatives would be in line with what the governor has done to address this The rising cost of prescription drugs By partnering the state with the private sector to develop drugs to compete in the market.
Health care affordability remains a nightmare for many Californians. Medical loans That hurts disproportionately Low-income workers and minorities. By introducing a state public plan, California would set an example for other states and the federal government to create their own plans that, in turn, could lower premiums nationwide.
Richard Scheffler is a Distinguished Professor at the Graduate School of Public Health and the UC Berkeley Goldman School of Public Policy. he was Engaged By the Governor to serve a healthier California for all commissions. Stephen Shortell is a Distinguished Professor in the School of Public Health and Haas School of Business at UC Berkeley and Dean Emeritus of the School of Public Health.