The Washington PostDemocracy Dies in Darkness

The Health 202: States are eyeing public option health plans. Many obstacles stand in the way.

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with Paige Winfield Cunningham

It was Massachusetts that provided the inspiration for the 2010 Affordable Care Act. Now states are reprising their role as laboratories for ambitious health-care policies — this time, in debates over government-backed, public option plans.

They offer a preview the fights that will emerge if President Biden attempts to fulfill his campaign promise of creating a public option at the federal level. 

The nation saw its first state-level public option this year, and could soon see more.

This year, Washington became the first state to offer a public option. 

Several other states may be close behind. Advocates and lawmakers in Colorado, Oregon, Nevada, Connecticut, and New Mexico are exploring public option proposals of their own. The idea is to provide consumers with a lower-cost option that can also compete with private health plans and hopefully drive prices down throughout the individual marketplaces.

But pushback to the public option from the health-care industry and insurance companies is fierce, and the experiment in Washington is already off to a rocky start, with some backers disappointed that it has done little to bring down premiums. 

Washington’s experience shows how hard it is to implement a state-level public option.

Beginning in the 2021 open enrollment period, Washington residents on the individual insurance market could take part in the nation’s first public option. 

Not many of them chose to do so. Less than 1 percent of state residents in the individual health insurance market opted for one of the 15 public option plans offered by five private insurers, according to initial data from the state

Although some of the low uptake probably stems from consumers who were auto- enrolled in the same plan they had the previous year, the public option plans also did little to control costly premiums.

The average public option plan premiums across all offerings was 4 percent higher compared to average 2020 Obamacare premiums, according to a presentation by Christine Gibert, a policy director at the Washington Health Benefit Exchange.

Cynthia Cox, the vice president of the Kaiser Family Foundation and director of its Affordable Care Act program, points out that if you control for the generosity of the plans, the public options are actually a little cheaper on average. But that’s not something consumers often realize.

“People aren’t always making that apples-to-apples comparisons when they’re shopping online; they’re looking at the premium first,” Cox said. “Suffice it to say, the idea that a public option could significantly lower premiums did not play out well.”

The state found it extremely difficult to set payment rates lower.

The high premiums for the public option plan stemmed from a failure to cap payment rates to health-care providers, said Washington state Rep. Eileen Cody, who sponsored the bill and chairs the state House’s health-care committee. 

When Cody initially proposed the bill, she proposed capping payments at the rate that Medicare pays. Later, lawmakers increased that to 160 percent of what Medicare pays. Even with the higher rates, the state struggled to get health-care providers to agree to participate in the plan. That’s because hospitals are used to receiving much higher payments from private insurance plans than from Medicare — an average of 247 percent more, according to a Rand Corp. study.

“The hospitals just would not take lower rates,” Cody said.

Cody said the public option rollout didn’t go the way she had planned.

“In some ways, I would say it’s been a disappointment,” Cody said. “The rates did not come in where we hoped.”

It could be easier for the federal government to sell a public option plan.

States can’t run deficits to fund health-care subsidies and may face pressure from health-care providers who threaten to leave if reimbursements drop too low, according to Ge Bai, an expert on health-care policy at Johns Hopkins Bloomberg School of Public Health. The federal government, in contrast, has much more clout and financial leeway.

“The bargaining power is so much bigger at the federal level,” Bai said.

Still, Bai and other experts cautioned that it’s too early to judge the success or failure of Washington’s public option. Backers of public option proposals may bank on being able to gain more negotiating power over time as the public option gains a foothold in politics and the market.

“They expect this to be a process that will go over a number of years where slowly over time, they’ll be able to introduce changes or alterations,” said Jerome Dugan, an expert on health insurance models at the University of Washington.

That seems to be the case in Washington: Cody said that lawmakers are working on legislation that would force more health-care providers to take the public option and are looking into whether the state could also increase subsidies down the line in an attempt to bring down premiums.

Opposition to public options is fierce.

The Partnership for America’s Health Care Future, an alliance of hospital, health insurance and pharmaceutical lobbyists, is spending $1 million to combat a plan in Colorado that would trigger the creation of a public option if the health-care industry cannot bring down costs on its own before 2024.

This year’s television ad buy in Colorado comes after the group already poured $5 million into the state to attack a separate public option proposal last year, the Colorado Sun reports. 

The group also has campaigned against a state plan in New Mexico. In the District, Maine and Montana, it is promoting ad spots tying a federal option to increased prices.

An ad from the Partnership for America's Health Care Future opposing a federal public option:

In Connecticut, Democrats pushing a public option have run into opposition from the insurance industry. State ethics filings show that insurance giants Aetna, Cigna and Anthem spent nearly half a million dollars lobbying the statehouse and executive branch in the 2019-2020 period, NPR reports

Frances Padilla, the president of the Universal Health Care Foundation of Connecticut, said this opposition has been the biggest force scuttling efforts to introduce a public option in a state that has been nicknamed the “insurance capital of the world.”  

Padilla, a proponent of a public option in the state, is optimistic that this year could be different after the pandemic shone a spotlight on health equity issues. But not, she says, without “a drag-out fight.”

If a public option succeeds on the state level, it could pave the way for national action.

Democrats at the state level have a warning for lawmakers looking to push a federal public option: Prepare for a bruising fight.

They will probably face much of the same opposition from hospitals and industry, said Cody, of Washington. “Everyone has a hospital in their district,” she added.

Still, Cody thinks that efforts in Washington and other states, if they succeed, could make it easier for national lawmakers to follow suit. 

“Usually the states try things and then the feds take what seems to be a good idea and try to build on it,” she said.

Ahh, oof and ouch

AHH: AstraZeneca’s U.S. trial found the vaccine 79 percent effective.

Oxford University and AstraZeneca reported that long-awaited data from their clinical trial in the United States, as well as other studies in Chile and Peru, found the vaccine to be 79 percent effective against symptomatic covid-19 and 100 percent effective against severe cases of the disease, The Post’s William Booth reports.

Oxford researchers, who developed the vaccine alongside pharmaceutical giant AstraZeneca, said in a press release that the coronavirus vaccine is “safe and highly effective, adding to previous trial data from the United Kingdom, Brazil and South Africa, as well as real-world impact data from the United Kingdom.”

The trials included 32,449 adult participants, most of them in the United States, who received either two standard doses of the Oxford-AstraZeneca vaccine or a placebo, at a four-week interval. 

Use of the vaccine was briefly paused across Europe last week after a handful of reports of people who had worrisome blood clots after receiving the vaccine. But a review of the data from the vaccine trial found no increased risk of blood clotting among vaccine recipients.  

AstraZeneca announced that it will submit its full results to the Food and Drug Administration in the coming weeks in order to seek emergency use authorization. The U.S. government has preordered 300 million doses of the vaccine.

OOF: Drug companies are defending their vaccine monopolies even as the immunization gap between rich and poor countries widens.

Pharmaceutical companies are rebuffing entreaties to share their technologies more widely to ramp up global production of lifesaving coronavirus vaccines. They are lobbying the Biden administration and members of the World Trade Organization against any attempts to weaken their intellectual property rights or monopolies on coronavirus vaccines, The Post’s Christopher Rowland, Emily Rauhala and Miriam Berger report.

The pharmaceutical companies argue that the rapid development of new vaccines is proof that the traditional business model and incentives work. But critics point to a massive disparity in vaccine access: Of the potential 10 to 14 billion vaccines that the industry hopes to produce in 2021, two-thirds of vaccines have been claimed by wealthy and middle-income countries, according to a joint report released by the drug industry and the Coalition for Epidemic Preparedness Innovations earlier this month.

“The debate about how to immunize more people overseas is picking up greater steam in the United States now that President Biden has promised that most Americans will be vaccinated by July. Some Democrats in Congress, fresh off approving Biden’s $1.9 trillion pandemic rescue package, are determined to make sure Americans don’t forget about the rest of the world as they potentially celebrate Independence Day with a semblance of normalcy,” our colleagues write.

The United States has pledged $4 billion to Covax, a WHO-backed effort aimed at ensuring equitable vaccine distribution. But experts say that there is not enough vaccine supply to satisfy demand for the vaccine in developing countries. 

OUCH: The nation’s supply of crucial coronavirus swabs all hangs on two cousins embroiled in a family feud.

In March of 2020, the U.S. government realized that it needed as many nasopharyngeal swabs as it could get, to increase coronavirus testing capacity by orders of magnitude. 

Adm. Brett Giroir was put in charge of finding them. He soon learned there were only two companies capable of providing the swabs at scale: one in northern Italy, and Purtinan Medical Products in Maine — a small, family-owned business run by two feuding cousins. 

“Never before had Puritan, founded a century ago in the tiny town of Guilford, been more important. And never before had it been so dysfunctional. A yearslong feud between the two owners, [Timothy] Templet and his cousin John Cartwright, had left the business in a management crisis,” Bloomberg News’s Olivia Carville reports. Just weeks before the World Health Organization declared the coronavirus a global pandemic, Templet had filed suit to dissolve their joint ownership of the pandemic.

A year later, “even a $250 million infusion from the U.S. government has done little to quell an epic family feud,” Olivia writes.

As the company turned its focus to the urgent needs of the country, the disagreement between the cousins continued to boil over, with no sign of resolving. A relative told Bloomberg that the cousins communicate only when necessary, and court filings show that their legal conflict is ongoing. 

More in coronavirus news

The CDC says three feet is adequate for social distancing in most schools.

The new guidelines, which allow for three feet of distance between students in all elementary schools and most middle and high schools, mark a major reversal from agency guidance issued last month that required six feet of distance between people, The Post’s Laura Meckler, Karin Brulliard and Lena H. Sun report.

That February guidance would have required most schools in the country to hold off on fully reopening. It put the CDC at odds with Biden, who had called on schools to fully reopen, and sparked a backlash from many experts, who saw it as overly cautious.

The updated guidelines come after new research found coronavirus transmission to be low in schools that require masks but did not always require six feet of distance. This held even in areas with high levels of community transmission. 

But the change may face opposition from teachers’ unions, which have been engaged in tense negotiations over school reopening plans. The unions have raised concerns about whether there is enough research on distancing in schools that are more crowded or in older buildings, which may have less ventilation.

A top HIV/AIDS doctor and gay activist will oversee vaccine equity efforts at the CDC.

Demetre Daskalakis, who had been director of the CDC division on HIV/AIDS prevention, will lead efforts to address racial and other disparities in the nation’s vaccination efforts, according to an internal memo and person familiar with the move, The Post’s Isaac Stanley-Becker and Lena H. Sun report.

“The new position is a signal of the emphasis placed by the Biden administration on equity in its response to the pandemic,” Isaac and Lena write.

Daskalakis will report directly to CDC Director Rochelle Walensky and will serve as the main CDC liaison to the White House team focused on equity efforts around the vaccine and other coronavirus response measures. He will be charged with coordinating with states and other jurisdictions, as well as retail pharmacies and community health centers, in an effort to bring shots to vulnerable communities and reduce racial disparities in vaccine uptake.

Before joining the CDC last year, Daskalakis oversaw disease control in New York City’s health department. He was in that position during the first nine months of the pandemic and helped lead the city’s response.

Elsewhere in health care

Online pills could redraw the battle lines over abortion.

Advocates are pushing Biden’s Food and Drug Administration to lift restrictions on abortion medications and make them easier to prescribe through telemedicine. The pills, which can be used to terminate a pregnancy in the first 10 weeks, have become an increasingly popular alternative to surgical abortions, and pressure has grown to make them available online during the coronavirus pandemic. 

If the Biden administration changes the FDA guidelines, it could “dramatically remake the abortion landscape” and make it harder for states to restrict abortion access, even if the conservative-dominated Supreme Court overturns Roe v. Wade, Politico’s Alice Miranda Ollstein and Darius Tahir report.

“Should the federal rules get rewritten, someone in, say, Arkansas, could have a video consultation with a doctor in Massachusetts or even the UK and then receive the pills by mail. Even if red states moved to ban their importation, enforcement would be nearly impossible,” they write.

Abortion opponents are trying to preempt any loosening of restrictions. Bills are pending in Indiana, Montana, Arizona, Arkansas, Alabama and Iowa that would preemptively ban the pills or make them harder to obtain. 

The issue could soon come to a head: A federal appeals court is hearing a challenge to the Trump administration’s decision to enforce in-person dispensing requirements during the pandemic, and the Biden Justice Department will need to take a stance on the rules by April 7.

Sugar rush

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