Washington is the first state to introduce a public option for health insurance, but it has been difficult to get hospitals on board. Other states with public options in the works are taking notice.
The Washington state government, in its second year of offering the nation's first public option health insurance plan, has learned an important lesson: If you want hospitals to participate, you're probably going to have to force them.
Washington state, in its second year of offering the nation's first public option health insurance plan, has learned an important lesson: If you want hospitals to participate, you're probably going to have to force them. Officials from the Washington State Hospital Association said that more hospitals than not are voluntarily participating in public option plans. But, they noted, the public option relies on cutting payments to hospitals to control costs and ties reimbursement to Medicare rates, which don't cover hospitals' cost of providing care.
Washington's public option was designed to save consumers money primarily by lowering what hospitals and doctors get paid, capping aggregate payments at 160% of what Medicare would pay for those services. By comparison, health plans had been paying providers an average of 174% of Medicare rates. That will be a challenge for any state or federal public option plan. There are only so many ways to lower premiums. Hospitals, doctors and other health care professionals have pushed back hard against any cuts in their payment rates, while insurance plans balk at plans that could eat into their profits.
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