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Commentary , Report

Options for Designing a Public Option

06.2020 / By The RAND Corporation

This commentary gauges the potential effects on coverage and cost if public options become available in the country’s health insurance exchanges, based on observations from a RAND COMPARE microsimulation model.

The scenarios included:

  • A public option sold on the exchange, based on provider reimbursement between Medicare and private provider levels (“low reduction”).
  • A public option sold on the exchange, based on provider reimbursement between Medicaid and private provider levels (“high reduction”).
  • A public option sold only outside the exchange, based on the high payment reduction. Under this scenario, a state would need a waiver under section 1332 of the Affordable Care Act (ACA) to allow consumers who qualify for advance premium tax credits (“APTCs”) to use federal pass-through payments to buy the public option. Such payments would approximate each consumer’s APTC amount.

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