Despite California’s Obamacare premium costs spiking 13.2 percent next year, the state’s insurance commissioner said he supports a public option at the state level that could bolster competition and potentially serve as a test for the controversial idea nationwide.
Insurance Commissioner Dave Jones said in an interview with California Healthline, quoted by Bay Area public radio station KQED, “I think we should strongly consider a public option in California.” The Sacramento Democrat added, “It will require a lot of careful thought and work, but I think it’s something that ought to be on the table because we continue to see this consolidation in an already consolidated health insurance market.”
Obamacare’s goal was to wipe out private healthcare in America by demonstrating that through eliminating the profit motive, government could provide a higher standard of care at a lower price. But with private healthcare premiums increasing by only 5 percent in 2017, Obamacare’s average premium cost is rising about 2.6 times faster, according to the National Business Group on Health, a Washington, D.C.-based organization representing 133 large employers.
That does not include the cost for the failed state online healthcare shopping centers created by the 2010 Obamacare legislation. These closed after receiving more than $1.3 billion in government loans to enroll more than 730,000 consumers across the 14 states.
As of March 2016, Obamacare accounted for 11.1 million people that purchased health plans and the estimated 10 million people added to Medicaid nationally. California’s Obamacare plan, called Covered California, accounted for about 1.1 million of the purchased plans, and over 4 million in Medicaid expansion.
With California now providing Medicaid to about one-third of the state’s population, Sen. Ed Hernandez (D-West Covina), who chairs the State Senate’s Health Committee, estimates that the annual cost of the program has increased since 2012 by $30.8 billion per year, to $91 billion. But Hernandez calls that horrendous cost increase “economic stimulus,” since the State of California’s cost under Obamacare only rose from $14.4 billion to $18 billion.
When Democratic presidential nominee Hillary Clinton held a huge lead in July, she promised to “pursue efforts to give Americans in every state in the country the choice of a public-option insurance plan.”
But with the possibility that Republican Donald Trump may become president and drastically cut back on Obamacare’s spending Lollapalooza, California Democrats are now scrambling to form a state government-run health plan to compete with private plans.
Insurance Commissioner Jones offered few details in a KQED interview regarding what the Golden State’s “public-option” would look like, and how much it would cost. The second-term commissioner stated, “I don’t want to begin to prejudge it,” and “I don’t know whether you would start in certain areas of the state and expand from there. I think there would be significant reservations about the state running it. There would be a wide variety of governance models you could come up with.”
With the Democrats potentially poised to pick up large enough majorities in both houses of the state legislature to pass bills without any bipartisan support in November, California lawmakers and their crony capitalist fellow travelers may have a once-in-a-lifetime opportunity to build a socialist paradise..
“We’re certainly very interested,” Anthony Wright, executive director of Health Access California, told KQED. “This is something we advocated for in its most ambitious form during the debate over health reform and there are elements of the proposal that could be adapted for California.”
Health insurers agreed. “Covered California has arguably one of the strongest and most stable exchanges in the country. There is robust consumer choice so we don’t think we need to mess with something that isn’t broken,” said Nicole Evans, a spokeswoman for the California Association of Health Plans, a trade group.
Commissioner Jones says he anticipates that critics will cite the failure of numerous Obamacare co-ops across the country as evidence a public option won’t work. But he blames the Republican-led Congress for failing to provide enough additional subsidies.