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Blue-state governors are picking up where Obamacare left off

From single-payer to public options, Democratic leaders have ambitious plans to expand coverage.

Christina Animashaun/Vox

From coast to coast, cities and states are rolling out ambitious plans to expand government-run health coverage to more Americans.

This week alone, prominent Democrats in California, Washington, and New York unveiled proposals to extend public coverage to people who currently don’t qualify for it or can’t afford to enroll.

California Gov. Gavin Newsom is asking the federal government for leeway to allow his state to create a single-payer system. Washington Gov. Jay Inslee is proposing a “public option”: a state-run health plan that would compete against private insurers. And New York Mayor Bill de Blasio is pumping $100 million annually into the city’s public hospitals so the uninsured can visit a primary care doctor at an affordable price.

These state- and city-level plans are likely the Democrats’ best shot at expanding public coverage while President Trump remains in office. Although it’s true that congressional Democrats are increasingly lining up behind a Medicare-for-all platform — planning to hold the first-ever House hearings on the policy this year — it’s also true that these efforts are dead on arrival with a Republican Senate and presidency.

Instead, cities and states offer a testing ground for health policy ideas that the party may want to take national if they regain control of the Senate or presidency in 2020. President Obama, for example, used Massachusetts’s innovative health coverage expansion of 2006 as the framework for structuring the Affordable Care Act.

The proposals show that health care continues to be a motivating issue for Democrats. The party isn’t fully satisfied with the Affordable Care Act, which has extended coverage to millions of Americans but also leaves 11.7 percent of the population uninsured. There is a desire to go even further — and a lot of different ideas about how to do that.

Single-payer, public option, charity care: three ways Democrats want to expand public coverage

Democrats share the goal of expanding health insurance coverage, but they’re proposing different policies to get there.

In Washington state, Gov. Inslee is proposing a “public option”: a nonprofit health plan run by the state to compete against private health insurers.

Senators vigorously debated including a public option in the Affordable Care Act as a way to increase market competition and drive down premium costs. But the public option ultimately fell out of Obamacare as it became clear there wasn’t enough support for it from moderate senators.

Now Inslee is trying to revive this policy on the state level — and if he’s successful, Washington would be the first state to implement a public option. Inslee is proposing a state-run health plan that would reimburse doctors and hospitals at Medicare rates (which tend to be lower than the prices private plans pay and thus a way to reduce insurance premiums).

Inslee is working with the state legislature, which Democrats currently control, to flesh out the details of this plan. They need to answer some questions first: How much are the premiums for this public plan? And what hospitals and doctors will be in-network?

Elsewhere on the West Coast, California Gov. Newsom used his inaugural address to propose a wide array of health care reforms. Among them are a letter he sent to the Trump administration asking the federal government to provide new flexibilities that would allow a state to run its own single-payer program.

Here’s why. Both Medicare and Medicaid are federally administered programs. Creating a single health insurance plan for an entire state requires making significant changes to those programs — and that requires a signoff from Washington.

Newsom almost certainly won’t get that signoff from President Trump; observers don’t expect California’s single-payer effort to become feasible until 2021 at the earliest (and possibly even later, if Trump wins reelection).

So Newsom has also rolled out short-term plans to expand public coverage. He is proposing covering undocumented young adults through the state Medicaid program, which would make California the first state to do so. He is also exploring ways to reduce prescription drug spending by having all state agencies band together to purchase drugs in bulk.

And across the country in New York, Mayor Bill de Blasio wants to bring universal health care to America’s biggest city — or at least that’s the message he wants uninsured New Yorkers to hear.

De Blasio rolled out a new plan this week that he says would guarantee that every New Yorker, regardless of their ability to pay, would be able to visit a doctor and get affordable medical treatment in the city’s historic public hospital system.

This is not single-payer health care. At its core, the de Blasio plan is a much-needed funding infusion for New York City’s ailing public hospitals: another $100 million a year. Through a program called NYC Care, any uninsured New Yorker is able to visit one of the hospital system’s 70 clinics and see a primary care physician. They will be charged, if at all, on a sliding scale designed to keep care affordable, though we haven’t seen the specifics yet.

“People will hopefully know they have access to a primary care physician and can start there,” rather than going to the emergency room, Katie Robbins, director of Campaign for New York Health, says.

Steering the program is Mitchell Katz, the hospital system CEO who oversaw a similar program in San Francisco that launched 10 years ago. The Healthy San Francisco plan was not identical to what New York is doing, but it shares the same basic structure: Uninsured residents could visit the city’s health clinics and get medical care at a price that was affordable to them.

The San Francisco program, as evidenced by this 2011 report, was largely judged a success. Three-fourths of the participants visited a doctor in their first year of enrollment, visits to the emergency room correspondingly declined, and there was also a drop in preventable hospitalizations for the uninsured.

Now New York is building off that experience, with Katz at the helm.

“Giving people direct access to care is not the same as an entitlement to comprehensive coverage,” Larry Levitt at the Kaiser Family Foundation says. “But in a voluntary and fragmented insurance system like we have now, there will be people who fall through the cracks, and a more organized and accessible safety net makes sense for them.”

Democrats are testing out policy ideas that could go national in 2021

These new proposals matter on two levels. First, programs that expand public health insurance will, obviously, impact who gets coverage. When Newsom, Inslee, and de Blasio talk about their ideas, they all discuss the importance of driving down the uninsured rate and making sure their constituents have access to medical services.

It’s also important to think of how these plans could ripple across the country. Democrats are at a moment when they are vigorously debating the future of health care. There are eight plans to expand public insurance floating around Capitol Hill right now, and likely more to be introduced as Democrats take control of the House.

States can serve as a testing ground for the ideas Congress wants to debate. California, Washington, and New York City have robust Democratic majorities that could implement ideas that would get stuck in the gridlock of divided government in Washington. They can see how these programs work when they go out in the real world, and whether the rest of the country wants to follow the example.

The history of the Affordable Care Act is especially instructive here. In 2006, Massachusetts passed a first-in-the-nation health coverage expansion that banned preexisting conditions and required all residents to carry health insurance coverage.

That law led to a sharp decline in Massachusetts’s uninsured rate, which quickly fell to the lowest in the country. That got the attention of policymakers in Washington — and when President Obama took office in 2009, the Massachusetts model quickly became the backbone of his health reform proposal: the Affordable Care Act. He even brought on some of the architects of the Massachusetts plan to help write and model his new national version.

A new state or city plan could play a similar role for future health reform efforts in Washington — a chance to test out an idea in a smaller setting and see how well it works.