First, we wanted to create the competition that would give the people of Los Angeles County better access to affordable health care, and we’ve managed to offer the cheapest rates for most years. To compete, some of the commercial plans have cut their prices, but LA Care remains one of the most affordable plans on the stock market. I think this is a great win for the public option – providing healthy competition to commercial plans that keeps prices affordable.
Second, we wanted to provide ongoing care to members with fluctuating incomes. We have seen more than 33,000 of our members switch from our Marketplace plan to our Medicaid plan or vice versa – the so-called churn population. These people were able to keep their providers and maintain similar coverage despite the move.
Skeptics argue that LA Care’s public option model has not reduced medical costs. My answer is that it is better to offer comprehensive health coverage than uninsured people whose only option is to go to an emergency room or other urgent care facility. Over time, access to preventive care has the potential to improve health outcomes rather than treating disease in a late, emerging state. Other reviewers have suggested that providers in a public option system would be paid ridiculously low tariffs, but LA Care has invested in recruiting more doctors into our network, negotiating capitalized tariffs in line with Medicare tariffs to keep providers happy at the same time to keep the premiums affordable.
LA Care proves that a public option can increase consumer choice, provide access to a large network of providers, and stay tariffs affordable while competing on par with commercial plans. We meet the same requirements as other plans on the exchange. There is no special treatment just because we are a public body. One advantage is that we are a non-profit corporation under public law and therefore have no shareholders to appease.
While Murray and Pallone work on their legislation, we have them through public comment that localization is critical to a government administered public option. The LA Care model is workable for much of the country, but certain local conditions may call for an alternative and may require geographically adjusted premium rates. It is also important to develop a public federal option so that consumers can continue to receive both federal and state premium support.