# Understanding the State Public Option Act

This bill creates a new way for people to buy health insurance directly through Medicaid, starting in 2025. Instead of only being eligible for Medicaid based on income or other specific circumstances, this law would let anyone who lives in a participating state purchase Medicaid coverage—essentially treating it like a regular insurance plan you can choose to buy into.

Here's what this means in practical terms: If you're currently uninsured or shopping for coverage on the private market, you could potentially enroll in your state's Medicaid program during the standard enrollment periods (like the annual open enrollment period). You wouldn't have to wait for a special circumstance or meet traditional Medicaid eligibility requirements. The catch is that you'd have to pay premiums and potentially other costs, though there are limits on how much you'd pay. Premiums can't exceed 8.5 percent of your household income, and other out-of-pocket costs would be capped similar to private insurance plans. If you qualify for tax credits to help pay for insurance (based on your income), those credits could be applied to help pay your Medicaid premiums instead.

The bill also includes financial incentives for states to participate. The federal government would cover 90 percent of the administrative costs for states running these programs, and states would keep half of any premiums collected that exceed what they actually spend on medical care. People who buy into this coverage could also use managed care options (like HMOs) if available in their state. Essentially, this creates a middle ground between traditional private insurance and traditional Medicaid—a government-run option that people can voluntarily choose to purchase if they want an alternative to private plans.

State Public Option Act

Schrier, Kim

State Public Option ActThis bill allows residents who are&nbsp;not already eligible for Medicaid&nbsp;and not concurrently enrolled in other health insurance coverage to&nbsp;buy into&nbsp;a state&nbsp;Medicaid plan&nbsp;beginning January 1, 2025, at the option of the state. State Medicaid programs may set premiums and cost-sharing requirements for such coverage in accordance with specified limitations.The bill also (1) provides the enhanced Federal Medical Assistance Percentage (i.e., federal matching rate) to every state that expands Medicaid coverage for individuals who are newly eligible under the Patient Protection and Affordable Care Act, regardless of when such expansion takes place; and (2) requires state Medicaid programs to cover comprehensive sexual and&nbsp;reproductive health care services, including abortion services.