A Successful Public Option

 

L.A. Care has been a publicly operated health plan since 1997, serving Medi-Cal members in Los Angeles County. Then in 2014, when it decided to participate in Covered California™, the state's Affordable Care Act (ACA) exchange, it became the first true public option in the marketplace… and guess what? It's thriving.

Public Option

A public option provision was included in the original version of the ACA. It was supposed to be a nationwide alternative to for-profit commercial health insurance plans that would promote competition and bring costs down. The provision was stripped from the final bill but that didn't mean public health plans couldn't jump into regional or state marketplaces.

Mission-Driven

L.A. Care sees participation in the Covered California exchange as an extension of its original mission to provide access to quality health care for Los Angeles County's vulnerable and low-income residents and to support the safety net required to achieve that purpose.

Being on the exchange allows L.A. Care to continue to serve members when their financial status changes. They are able to move from Medi-Cal to the exchange, and vice versa, and still keep the same health plan and doctor. More than 12,000 members did just that in 2019.

Success

Without shareholders to answer to, L.A. Care is able to operate on lower margins than its commercial competitors, and as a result has been able to offer some of the most affordable options on the Covered California exchange.

In fact, our L.A. Care Covered ™ product has had some of the most affordable rates until the 2020 open enrollment period, when the commercial plans clearly noticed what L.A. Care was doing and sharpened their pencils.

That is exactly how the public option is supposed to work. It's supposed to drive healthy competition which in turn drives innovation. Without competition, there is little incentive to innovate.

L.A. Care is a public option that is meeting the desired goal — a plan that is providing access to quality health care at an affordable price to a greater number of people. -John Baackes

A Model for the Nation

L.A. Care is one of 16 public plans in California, but it is the only one participating in Covered California. L.A. Care has proven that a public plan can be competitive in the commercial marketplace, as it is now fourth in the state in Covered California membership.

The L.A. Care model of a public option is something that could be replicated across the country and national lawmakers should take a serious look. Adding a public option to the ACA exchanges would not require starting from scratch, but rather would be improving the landmark legislation that has already provided health care to more than 20 million people.

In the News: L.A. Care and the Public Option