President Obama calls for consideration of public option in some states

President Barack Obama on Tuesday (July 12) praised the accomplishments of the Affordable Care Act but called on Congress to reconsider a “public option” where individuals in states with limited competition could purchase insurance from the government.

In an editorial published in the Journal of the American Medical Association, Obama said the ACA had reduced the number of uninsured Americans from 49 million in 2010 to 29 million in 2015. He wrote that 88% of enrollees in individual Marketplace exchange  live in counties with at least thee issuers – Arkansas has six payers this year and will have five in 2017 – but some parts of the country lack competition. He wrote that in the original debate over the ACA, he supported a “Medicare-like public plan,” which was not included in the final law.

“Now, based on experience with the ACA, I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited,” he wrote. “Adding a public plan in such areas would strengthen the Marketplace approach, giving consumers more affordable options while also creating savings for the federal government.”

Ray Hanley, president and CEO of the Arkansas Foundation for Medical Care, a health care consulting group, disagreed with that approach, saying competition hasn’t controlled costs. In Arkansas, four insurers recently requested rate increases of 14%-24%.

“My view would be that given the cost pressures on existing public options like Medicaid and Medicare, it’s not a good time to create another public option. Instead, invest some work into putting the (missing) element of cost containment into the ACA,” he wrote in an email.

The Arkansas Medical Society opposed the idea of a public option when the idea was first considered as the Affordable Care Act was being developed.

Scott Smith, the society’s director of governmental affairs, provided its statement from back then, which said, “The AMS does not believe a government-run option is the best way to expand coverage or create competition in the marketplace. Any plan of this type should not be federally subsidized or funded and should be subject to the same rules and regulations as private plans. Participation must be voluntary and reimbursement rates should be negotiated, not set by the federal government or tied to Medicare.”

Obama also called for increased financial assistance to make insurance more affordable. He called for drug manufacturers to be more transparent and said they should increase the rebates they provide certain Medicare and Medicaid beneficiaries. He said the federal government should be able to negotiate prices for some expensive drugs.

He said he hoped the 19 states that have not expanded Medicaid programs would do so in the future. Arkansas did expand Medicaid through the private option, the program that uses federal Medicaid dollars to purchase private insurance for individuals with incomes up to 138% of the federal poverty line.

Obama sharply criticized Republicans, who he accused of “hyperpartisanship” and who he said “reversed course and rejected their own ideas once they appeared in the text of a bill that I supported.”

Hendrix College professor Jay Barth said he didn’t think Obama’s comments were particularly relevant for this election cycle because the debate isn’t really about expansion. However, that conversation will continue next year. He said it will be interesting to see if any “dark red” states have a new conversation about expanding Medicaid after Obama is out of office.

“It’s no longer Obamacare in a literal sense, and I’m wondering what happens in those states at that point in time,” he said.