State 'public option' health care: a unifier for Clinton and Sanders?

Hillary Clinton and Bernie Sanders have both expressed interest in setting up 'public option' health care plans for states, to compete with private providers. 

Bernie Sanders' "Medicare for all" plan seems even less likely now that he's all but out of the race for the Democratic presidential nomination, but there's a way that he and Hillary Clinton could still find common ground on government-sponsored health care.

It's a "public option" for states to set up their own insurance plans that compete against private industry. Sanders helped to pass the federal legislation that would allow it, and Clinton, the presumptive Democratic presidential nominee, says if elected she'd work with interested governors to implement it.

In Sanders' home state of Vermont, a long campaign to put the health system there under state control hit a dead end after cost projections came in alarmingly high. But the idea of a smaller step that would let the state set up a competitor to private insurance could catch on.

"That's something that I think Vermonters would be extremely interested in pursuing," said Lawrence Miller, a top health-policy aide to outgoing Democratic Gov. Peter Shumlin. "A public option, I think, is a very different conversation than a public mandate" like a so-called single-payer system run by government.

It remains unclear how many states might be interested in such an effort, which would likely trigger a sharp backlash from the deep-pocketed insurance industry. But by supporting a state option, Clinton may be able to broaden her appeal to liberals energized by Sanders' idealistic campaign.

The incremental improvements to President Barack Obama's health care law that Clinton has proposed aren't likely to fulfill the aspirations of liberals, said Robert Blendon, a professor at the Harvard T.H. Chan School of Public Health who follows public opinion trends on health care.

"What's exciting to them is not just adding benefits," he said. "It's offering some sort of public alternative to current private insurance."

The idea also could give Clinton a way to change the conversation if, as expected, a wave of sharp premium increases hits the health law's insurance markets later this summer and fall.

The legal vehicle for a state public option is already in place at the federal level, a section of Obama's health care law that allows waivers for state innovation.

States can begin applying for the waivers Jan. 1, right around the time a new administration takes over. If the federal Health and Human Services Department approves, states can take federal money used for coverage expansion and spend it their own way, so long as they don't run up the federal deficit, leave more residents uninsured or slash benefits.

The provision's author, Oregon Democratic Sen. Ron Wyden, said Sanders was "very constructive and very supportive" in getting it into law. At the time of the 2009-2010 health overhaul debate in Congress, a state waiver was seen as a potential vehicle for a government-run system in Vermont.

But Wyden said the concept is ideologically neutral, so that Republican and Democratic governors can seek waivers to test competing ideas.

"States can pursue a wide variety of approaches; what is non-negotiable is that they have to have a proposal that meets the targets" for coverage and cost under the health care law, he said, adding that a state-sponsored public insurance plan would certainly fit.

Politically, "this is a unifying idea," Wyden said. "Senator Sanders is for it, and Secretary Clinton likes it, too."

Both Clinton and Sanders had previously supported a public insurance option at the national level. But opposition from moderate Democrats kept that proposal out of the final health overhaul law.

Sanders now is focused on putting his stamp on the Democratic platform, hoping to steer the party to the political left.

His campaign says he'll keep pushing for his single-payer national health care plan, and won't settle for state experimentation as the last word. However, policy director Warren Gunnels said Sanders would definitely support a state public option.

"Anything that makes health care more affordable for Americans is something that Senator Sanders supports," Gunnels said. Other incremental steps that Sanders backs include increased funding for community health centers and action to control rising prescription drug costs.

In Vermont, political leaders are also considering other proposals that could be aided by federal waivers. One would involve creating a statewide system for primary care, with the idea that guaranteed access to preventive care would let the uninsured and people with high-deductible plans get medical treatment before festering health problems become more expensive to treat.

It's unclear how well a state-run insurance option would work. One risk is that the public plan would draw large numbers of people who are in poor health, leading to high costs and higher premiums that discourage others from joining.

Some committed single-payer supporters see the idea as a mirage.

"It is a superficially attractive option," said David Himmelstein, a co-founder of Physicians for a National Health Program. "We know that the private insurers will take advantage of it to shunt more of their sick, expensive patients onto the public plan."

Gram reported from Montpelier.