California workers are facing a health care affordability crisis. Insurance costs for families have risen more than two and a half times faster than wages, putting health care out of reach for more and more people. This gap is even wider for the states’ Black and Latino populations.

Part of the solution is within reach: The state should introduce a public option to compete with private insurance plans and lower premiums. California is uniquely positioned to pioneer this approach and has hard evidence that it will work.

President Biden has proposed a public health insurance plan to increase competition and lower costs, but gridlock in Washington and lack of support from Congress have shifted the development of a public option to the states, the labs of the democracy. Washington has implemented one, with little success so far in gaining enrollment or lowering premiums.

Fixed one reference to the name they use:

We are proposing a public option for California, which we call Golden Choice, which would require a different approach.

We

propose a public option system for California

what we call Golden Choice would require a different approach.

It is based on the ability of the state’s integrated medical groups to provide high-quality care at a lower cost by collecting monthly revenue per enrollee, a payment system known as capitation. The figure would be adjusted for each patient’s age, gender, health status and related characteristics likely to influence care needs. This model incentivizes the health care system to keep participants healthy and manage diseases with strong primary care and close coordination with specialists.

Coverage through a state-run Golden Choice plan would use this approach.

Our research shows that health insurance premiums based on this care model would be the lowest premiums in 14 of the 19 regions for the California insurance market. Individuals switching from what is now their most affordable option would save $1,389 per year in premiums as a result

the state’s public option plan. Golden Choice.REVISED:

Our work also looked at how the public option would perform if offered by the California Public Employees Retirement System, and we found that the premium would be lower than premiums in 9 of the 10 HMO plans currently serving to be offered.

California already has some experience with a public option: LA Care in Los Angeles County. This county-based public plan has been listed on the state insurance exchange since 2014. Our research team found that LA Cares’ low premiums have had a competitive effect

on the market, causing prices to drop. Premiums for the other plans have fallen and enrollment in LA Cares rose to more than 125,000 last year. The estimated savings from this public option was $345 million as of 2022. This premium decrease did not occur in the rest of the state.

where no similar plan exists. ADDED:

(LA Care has been blamed for treatment delays, but says the problems reflect a systemic problem related to payment rates.)

In 2024, the Inland Empire Health Plan, another provincial plan, will enter the Riverside/San Bernardino region

of covered California

with the lowest premium.

In Orange County,

Cal Optima

<

has also recently attempted to enter the market.

County plans are a valuable force in the marketplace, but the Newsom administration has an opportunity to make insurance more affordable on a much larger scale across California. It is an achievable goal.

The Golden Choice Proposal A statewide public option would require little to no new needs

financing by the state. The Department of Managed Health Care already regulates capitalized medical groups

so that no new regulations would be necessary

.

NEW:

We recommend that the state establish an Office of Public Options

to house Golden Choice

so that California’s 18 million commercially insured and the uninsured can share the benefits of a public option, especially lower premiums. The

O

office would organize, implement and promote

a public option for the entire state. Golden choice.

The Newsom administration has evidence that it needs to make progress.

on what would be the first successful statewide public option.

Such an initiative would be consistent with what the governor has done to address the rising costs of prescription drugs by having the state work with the private sector to develop drugs that can compete in the marketplace.

Healthcare affordability remains a nightmare for many Californians, fueling a medical debt crisis that disproportionately affects low-income and minority workers.

If California will lead the fight against runaway health care costs

By introducing

the Golden Choice

a state audience

California would set an example for other states and the federal government to develop their own plans which in turn could soon have evidence that they need to introduce their own plans and

reduce premiums nationwide.

Richard Scheffler is a distinguished professor at the Graduate School of Public Health and the Goldman School of Public Policy at UC Berkeley. Hey what

appointed

by the Governor to serve on the Healthy California for All Commission. Stephen Shortell is a distinguished professor at the School of Public Health and the Haas School of Business at UC Berkeley and dean emeritus of the School of Public Health. Richard Scheffler is a professor of health economics and public policy at UC Berkeley. Hey what

appointed

by the Governor to serve on the Healthy California for All Commission. Stephen Shortell is professor of health policy and management at UC Berkeley and dean emeritus of the School of Public Health.