Democrats in both chambers launch public option effort

Roll Call

May 26, 2021 1:30 pm

Two key committee chairs in the House and Senate are taking the first step toward crafting legislation to create a public health insurance option, reviving a debate between the parties on the federal government’s role in coverage and setting up a fight with the insurance industry.

Senate Health, Education, Labor and Pensions Chair Patty Murray, D-Wash., and House Energy and Commerce Chair Frank Pallone Jr., D-N.J., issued a request for information Wednesday asking for input on a public option, which would establish a government-run health plan to compete with private insurers. 

“Our goal in establishing a federally administered public option is to work towards achieving universal coverage, while making health care simpler and more affordable for patients and families,” the pair wrote.

Democrats abandoned plans to establish a public option through the 2010 health care law, but the proposal has gained support among Democrats in the ensuing years. The debate over whether to move toward a public option or a more ambitious Medicare for All, government-run program was a defining issue of the 2020 Democratic primary, with President Joe Biden supporting a public option.

Since taking office, Biden has focused on other goals, such as expanding the size of subsidies under the 2010 health care law and broadening eligibility for them. He did not include a public option in the economic proposals he is working to pass this year.

Democrats are also writing legislation to lower the cost of prescription drugs, which would create savings they could use to finance other priorities. 

With razor-thin majorities in both the House and Senate, Democrats would have a difficult time passing legislation to enact a public option, which Republicans oppose. Democrats could use the reconciliation process to consider public option legislation, which would allow them to pass legislation without Republican support, but that would require adherence to budget rules and no defections among Senate Democrats.

The health care industry has already mobilized to oppose this type of legislation. 

“Now is not the time for us to become embroiled in debates over issues like public option,” Chip Kahn, president and CEO of the Federation of American Hospitals, said in a statement. “It would be a mistake to allow such distractions to stand in the way of enacting legislation that sets the pathway to all Americans having the health coverage and health care security that all of us deserve and should expect.”

Democrats in both chambers have proposed different bills that would establish a public option, but Murray and Pallone indicated they would develop a new proposal.

There are several different ways lawmakers could set up a program. Murray and Pallone’s information request poses questions including who should be eligible for coverage through a public option, how the benefits should be structured and how prices for health care items and services should be set. The pair also asked how Congress could ensure that people enrolled in a public plan have adequate access to providers, what type of premium assistance should be available under a potential plan, what role states should have in administering a federally run option, how it might interact with Medicare and Medicaid and how a public option could address other health care objectives, like delivery system updates and reducing health inequities.

Other lawmakers who support a public option praised the effort and touted their own ideas.

“We are glad to see a public option gaining momentum in the Senate. Over the last five years, we have worked with people from Colorado to Virginia and everywhere in between to draft the Medicare-X Choice Act, which we believe is the best public option proposal available,” said Sens. Tim Kaine, D-Va., and Michael Bennet, D-Colo., who reintroduced legislation for a program they call “Medicare X,” earlier this year. “We look forward to working with the Biden Administration and our Senate leadership and colleagues in moving a public option forward to bring us one step closer to achieving universal health care in this country.”

Interested parties, which might include industry groups, health insurance experts and employers, have until July 31 to send Murray and Pallone their suggestions.