An effort by the Beshear administration to launch a government-sponsored health plan is well underway and being vetted by legislative committees.

Officials from the Health and Family Services Cabinet appeared before the October Benefits Cliff Task Force meeting and the November meeting of the Medicaid Oversight and Advisory Committee. Those appearances shed light on the executive branch’s desire to stand up a “basic health program” while drawing little scrutiny or criticism from committee members.

An April headline in Politico read: Oregon, Kentucky dust off an Obama-era policy to expand health insurance. The article leads with:

Two states are dusting off a little-used provision of the Affordable Care Act hoping to make health care more affordable for tens of thousands of low-income residents.

Oregon and Kentucky, despite their wildly different politics, are pursuing an Obama-era policy that uses federal dollars to establish a health insurance plan for people who make too much money to qualify for their state’s Medicaid programs. While the policy, known as the basic health program (BHP), was included in the Affordable Care Act, only Minnesota and New York took advantage, and it has been six years since a new one was created.

Politico cited a CHFS-funded feasibility study from Milliman that determined “40 percent of people in (Kentucky’s) basic health program membership, which it estimated at about 37,000, would have previously been uninsured.”

On the surface, meeting the needs for the uninsured is noble. What Milliman didn’t say explicitly is that 60% of a BHP’s potential membership already have health insurance. Therefore, CHFS’s BHP intends to enter the health exchange market and compete against private sector health insurers.

Milliman’s overview included the following bullet points:

• Health benefits coverage program created by the ACA to cover low-income individuals through state-contracted plans (as an alternative to the Exchange)

• States can provide affordable coverage for individuals with income just above (the) Medicaid limit

• States receive approximately 95% of what recipients would have received in Exchange subsidies to fund cost of premiums and benefits

The BHP’s eligibility is designed for “adults under the age of 65 with incomes 139-200% (of the) federal poverty level” who would “otherwise qualify for subsidies in the Marketplace.” (Emphasis added)

Translation: A BHP would be the state-level equivalent of the public option, a government-backed health insurance program competing in the private marketplace.

When it became clear Congress wouldn’t include a single-payer health care system as part of the Affordable Care Act, the “public option” became the liberal-progressive fallback demand. In a piece published by the medical journal Health Affairs in June 2010:

The “public option” for health insurance, as defined by the 111th Congress, grew from roots planted in California in 2001. Progressives supported it as a voluntary transition toward single-payer insurance, while conservatives opposed it as a government “takeover” of health care.

Lack of support among moderate Democrats, opposition from Republicans, and ambiguous messages from the White House are among the explanations for the public option’s defeat. However, there is nothing in the recently enacted legislation that would prohibit states from creating a public option in their exchanges.

Fast forward twelve years and that last sentence seems prescient.

Politico went to Emily Beauregard, executive director for the liberal advocacy group Kentucky Voices for Health for comment. Beauregard said, “It’s clear to see where the gaps lie, and which populations technically have coverage options, but not coverage options that work for them.”

In the same article, Rep. Kim Moser, a Republican who chairs the House Health and Family Services Committee, echoed Beauregard’s sentiments. Moser told Politico, “Kentucky is not known for our great health metrics, and we’re doing our best to really address some of the gaps and barriers in the system.”

Apparently, the effort to address those gaps now includes Kentucky’s own version of the public option.