President Obama wants Congress to “revisit” a public option for Obamacare

President Obama is calling on Congress to "revisit" a public option for Obamacare, citing the lack of health insurance options in some of the law’s marketplaces.

"Based on experience with the [Affordable Care Act], I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited," Obama wrote in an article for the Journal of the American Medical Association published Monday.

The article marks the first time a sitting president has written for the medical journal, which is considered one of the country’s most prestigious.

The public option push is part of a larger suite of changes that Obama is suggesting legislators and health advocates pursue during his final months in office. And it is one Democrats have increasingly gravitated toward heading into the election. Over the weekend, Hillary Clinton promised to push for a public option if elected — a position that Sen. Bernie Sanders enthusiastically endorsed.

The public option proposal is meant to address one of the ways the president sees his signature legislative accomplishment falling short. It is the result of White House staff taking a six-month deep dive into how the law is working.

The White House does not plan to send any legislative language to Congress; the president understands quite well that the Republican-controlled body will not move forward on his ideas.

Instead, Obama is taking a much longer view of his health care law — offering a guide for future elected officials who might wish to improve on his work.

"What the president has offered here is his best assessment, informed by seven and a half years of working to make health reform a reality, of the right path and trajectory for future policymakers," says Kristie Canegallo, White House deputy chief of staff for implementation.

Obamacare has struggled to bring new carriers into some marketplaces

Photo by Chip Somodevilla/Getty Images

Obama went to his domestic policy staff late last year with a specific request: to conduct a "frank and comprehensive" assessment of the Affordable Care Act.

"That prompted about a six-month process," Canegallo says. "There was a lot of internal analysis that was conducted, external experts that were consulted with. He coalesced around a set of conclusions."

One of those conclusions: The health law’s individual market doesn’t have nearly enough competition.

Democrats initially pitched Obamacare’s new marketplaces as a way to increase competition among those selling individual policies. For decades, large insurers have dominated entire states and left those who buy their own coverage with little choice.

A new online platform was meant to lower barriers to entry, giving new insurers an easy way to reach potential customers.

And while some areas of the country have seen new entrants to the insurance markets, others have struggled to attract competition.

The problem has become especially acute in 2016 with UnitedHealth, the country’s largest insurer, pulling out of the marketplaces. As many as 650 counties could have just one carrier selling on the marketplace when open enrollment begins in October. Three entire states — Alaska, Alabama, and Wyoming — are down to a single insurance carrier.

These are generally rural areas, which have long struggled to attract many health insurers. They have small populations that won’t bring lots of premium dollars and few doctors who can help build an insurance network. And even with the new platform, Obamacare has struggled to bring insurers into these areas.

Obamacare had a "public option lite." It was a disaster.

President Obama did support a public option during the health reform debate, along with many congressional Democrats. But the policy was ultimately torpedoed when moderate Democrats threatened to filibuster any law that included it.

In the public option’s place, the health law included "community operated and oriented plans" program. This co-op program gave nonprofits loans to launch new, local health insurance plans. It was often described as "public option lite."

In Obamacare’s first year, many of the co-ops offered consumers especially cheap premiums — a seeming sign of success that these new options could bring more affordability to the law’s marketplace.

But three years later, it's clear that the co-ops were priced much too low, and many have been unable to cover their members’ pricey medical bills. Half of the co-op plans have gone out of business since they launched in 2014. Just this week, Connecticut’s health marketplace announced its local co-op, HealthyCT, is going out of business.

The federal government is still working to recoup $1.2 billion in unpaid loans to the co-ops.

Budget wonks think a public option would save billions

Photo by Joe Raedle/Getty Images

The Democrats’ case for a public option has always been multifaceted. Some have focused on making Obamacare a better experience for consumers, by guaranteeing that everyone has access to a nonprofit option.

"It was also hoped that the public option would help keep private insurers honest," health policy experts Helen Halpin and Peter Harbage wrote in the journal Health Affairs in 2010. "If consumers felt mistreated by private insurance, they could vote with their feet and choose the public option."

That the public option would make Obamacare cheaper bolstered progressives' case. The Congressional Budget Office estimated in 2013 that adding a public option to Obamacare would save $158 billion and offer premiums 7 to 8 percent lower than the private insurers.

Experts argued that the public option could serve a "benchmarking" function: offering a reasonably priced premium that would make private carriers wary of setting their rates too high and losing customers.

Why is Obama talking about public options six months before leaving office?

Obama knows he is writing to an uncooperative audience in Congress. In his JAMA piece, he writes specifically about the role "hyperpartisanship" has played in Obamacare’s implementation.

"Republicans undermined ACA implementation efforts," he writes. "We could have covered more ground more quickly with cooperation rather than obstruction," referring to some Republican governors’ refusal to expand Medicaid.

So why propose a public option now? There has, after all, been little discussion of the idea since the health care debate. Vox’s Ezra Klein (then at the Washington Post) wrote a piece a few years ago called "Whatever happened to the public option?" noting how the proposal had all but disappeared from policy coverage despite the left’s previous vociferous support. (This has changed slightly in recent months, with Hillary Clinton coming out in support of a public option.)

President Obama knows that Obamacare is a large part of his time in office; it's the largest expansion of health coverage in the United States since Medicare and Medicaid passed in 1965.

He also knows the legislation has its imperfections; it was never a complete fix for what ails the American health care system.

Now he’s mapping out a course that not this Congress, and possibly not the one after that, but one later down the line might follow. As he prepares to leave office, he’s leaving behind both a legacy and a plan to improve it.

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