Premiums ‘Higher Than The Average Private Exchange Plan’ Under Failed State Government Option

CARSON CITY, Nev. – As some Nevada 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 Nevadans.
Writing at Forbes, the Pacific Research Institute’s Sally Pipes explains that 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 also points out that “[m]any providers have refused to accept the plan, given its low reimbursement rates.” She elaborates on that point, writing: “If the public option were able to copy Medicare’s payments, providers would find themselves in a world of financial hurt. A 2019 study from KNG Health Consulting found a country-wide Medicare-like public option would reduce payments to hospitals by $800 billion over 10 years. Healthcare providers can’t just eat those losses. They’d have to reduce headcount or skimp on updates to medical devices and supplies. Consequently, patients would have to wait longer to see specialists—or would have to make do with treatment from outdated technology.”
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 Washington Health Benefit 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 Nevada’s Health Care Future, CLICK HERE.