Center for Open Government: The General Assembly initiated the effort to create a "public option" health plan

One of the more interesting dynamics in the recent interim committee presentations covering the Beshear administration’s effort to launch a Basic Health Program (BHP) was the limited scrutiny and criticism from legislators.

A BHP is the state-level equivalent of the “public option”— a government-sponsored health insurance plan. According to the medical journal Health Affairs, “the ‘public option’ for health insurance…grew from roots planted in California in 2001. Progressives support it as a voluntary transition toward single-payer insurance.”

At the November meeting of the Medicaid Oversight & Advisory Committee, Rep. Kim Moser, R-Taylor Mill, engaged with CHFS Secretary Eric Friedlander for several minutes. (Link - Rep. Moser begins at 57:10 of the video) The back-and-forth revealed some details on why the Cabinet was recommending the BHP.

Moser mentioned her preferred approach, a public-private partnership to incentivize employers to provide better health care coverage for the targeted population. CHFS’s Friedlander responded that his Cabinet’s analysis determined that the federal funding through “advanced premium tax credits” would only allow for a government-backed plan.

A congenial, civil exchange between a committee chair* and agency leadership is common in Frankfort. However, what also may be behind the muted criticism is the fact that the General Assembly tasked CHFS with developing a basic health program recommendation.

In 2021, both houses of the legislature unanimously passed — and Governor Beshear signed — a joint resolution “directing the Cabinet for Health and Family Services to establish a work group to assess the feasibility of implementing a bridge insurance program.” House Speaker Pro Tempore David Meade, R-Stanford, was the resolution’s primary sponsor; Rep. Moser was the first listed co-sponsor.

The legislative findings assigning this responsibility to CHFS included that “Section 1331 of the Affordable Care Act gives the states the option to create a Basic Health Program, or bridge insurance program” and that “a bridge insurance program offers health coverage to low-income individuals otherwise eligible to purchase insurance through the Health Insurance Marketplace.”

According to Moser, she served as a member of what became known as the “HJR57 Work Group.” The work group was tasked with presenting their findings and recommendations by the end of 2021.

CHFS’s presentation to the Medicaid Oversight Committee summarized those:

Image: HJR57 Workgroup Recommendations

Legislators who signed on to this effort might point to HJR57’s direction that CHFS should “consider opportunities for public-private partnerships.” It is clear now that CHFS has considered — and rejected — a P3 option.

At some point during the ‘22 session, someone or some organization took the time to educate legislators on what exactly a BHP was designed to do: compete within the private exchange marketplace.

The budget bill, which has the force of law for the two-year biennium, included language prohibiting the Beshear administration from “exercising the state’s option to develop a basic health program…without first obtaining specific authorization from the General Assembly.”

Sec. Friedlander is on the record as saying the administration’s attorneys don’t believe that language prevents them from moving forward. There might be other reasons why CHFS eventually pulls the plug on the initiative but it won’t be due to their concern for the rule of law.

It’s important to know how we got here. It started with the policy-making branch of state government, the General Assembly.

It’s possible that policymakers like Moser didn’t fully understand what they were signing onto. It happens all the time in the legislature. Thankfully, members involved in writing the budget put the brakes on it.

There are two states with BHP public options, New York and Minnesota. Oregon is said to be in the process of standing one up.

Are these the states Kentucky wants to mimic for health care policy?

The General Assembly needs to ask itself that question come January.

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*Note: Rep. Moser isn’t the chair of the Medicaid Oversight Committee but is the chair of the House Health and Family Services Committee, which is the committee of jurisdiction for CHFS.