The public option sounds simple: a government-backed health insurance plan designed to offer lower premiums and compete with private carriers.
But the reality hasn’t lived up to the pitch.
Several states have tried to implement a public health insurance option as a way to make healthcare more affordable and accessible. While the idea continues to spark debate among policymakers, the actual results raise important questions for consumers like you.
If you have questions about the public option, this guide will help you understand what it is, how it’s been implemented, and why it hasn’t gained much traction.
What Is the Public Option?
The public option is a government-designed health insurance plan intended to compete with private insurance on the marketplace.
Supporters argue that a public option can lower premiums, improve access, and increase affordability without fully replacing private insurance. Unlike Medicare or Medicaid, a public health insurance option targets the general population, not just seniors or low-income groups.
In theory, adding a public option introduces competition, which should drive down prices. However, the plan is typically administered through private insurers rather than by the government directly. This hybrid model has created challenges in implementation and adoption.
The idea was originally included in early drafts of the Affordable Care Act (ACA) but was removed before passage due to political opposition. In recent years, several states have revived the concept and attempted their own public option programs with limited success.
How the Public Option Differs from Single-Payer Health Care
The public option is not the same as single-payer health care.
In a public option model, the government offers a health insurance plan that competes with private insurers on the same marketplace. Individuals can choose to enroll in the public option or stick with a private plan.
By contrast, a single-payer system (like Medicare for All) eliminates private insurance for most medical services and replaces it with one government-run program for everyone. There are no competing plans or marketplaces.
The public option maintains the private insurance market but introduces a government-designed alternative that operates under different pricing or provider agreements. This model aims to give consumers more affordable choices without mandating a single source of coverage.
It also relies on voluntary enrollment. Consumers still shop for insurance and weigh their options based on price, coverage, and network access. A single-payer system typically removes that marketplace entirely and standardizes coverage across the board.
Understanding this distinction is important. The public health insurance option expands choice, while single-payer centralizes it under one government plan.
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The Public Option in Practice: What States Have Tried
Only three states—Washington, Colorado, and Nevada—have implemented some form of a public option.
Washington Public Option
Washington launched the first public option in 2021, branded as Cascade Select.
While it aimed to cap provider payments at 160% of Medicare rates, many hospitals refused to participate due to financial concerns. Enrollment remained low, and the state later passed legislation forcing providers to join by 2025 if the plan isn’t offered statewide.
Colorado Public Option
Colorado Option required insurers to reduce premiums by 5% each year for three years.
As of 2023, only one insurer met the reduction goals. About 60% of residents had access to cheaper non-option plans. Enrollment hovered around 35,000, and insurers began pulling out of the state due to regulatory pressure.
Nevada Public Option
Nevada’s public option is still in development and expected to begin enrollment in 2026.
The plan mandates a 5% premium reduction compared to existing marketplace plans. However, early projections for cost savings were revised downward, and many providers warn the policy could lead to increased costs elsewhere in the system.
Minnesota is the latest state to pursue a public health insurance option. In 2025, state lawmakers passed legislation to expand MinnesotaCare and transform it into a public option available to more residents, including those above the current income limits. Enrollment is expected to begin in 2027, pending federal approval through a Section 1332 waiver.
Why Public Option Plans Struggle
Many public option plans depend on setting lower payment rates to providers in order to reduce premiums.
This has led to narrow provider networks, with hospitals and doctors choosing not to participate. When networks shrink, access to care suffers, even if premiums are lower.
Another issue is enrollment. In Washington, fewer than 3% of marketplace participants chose the public option. In Colorado, only a small fraction enrolled in the Colorado Option despite extensive marketing. These low numbers make it harder for states to sustain and expand the programs.
Insurers also face financial pressure under these mandates. When forced to meet pricing targets, they may exit the market entirely, limiting consumer choice. In Colorado, multiple insurers either reduced offerings or left altogether after the first year.
The result is a fragmented system with limited availability, inconsistent pricing, and a lack of provider participation.
What to Consider Before Choosing a Public Option Plan
Not all public option plans will fit every individual or family.
Before enrolling in a public option, review the provider network. Some public option plans have limited hospital or doctor participation, especially in rural areas. If your preferred provider isn’t in-network, your access to care may be affected.
Next, compare the total cost of coverage, not just monthly premiums. Lower premiums can sometimes come with higher deductibles or more limited services. Check what you’ll pay for prescriptions, specialist visits, and emergency care.
Some public option plans are designed with standardized benefits, while others may exclude certain procedures or impose tighter cost controls. Look closely at what’s included and whether it fits your needs.
The public health insurance option may be a good fit if you value lower premiums and don’t rely on a specific provider. But if broad access and flexibility matter more, a traditional private plan might offer better value. Always weigh your choices carefully based on your specific health and financial situation.
Alternatives to the Public Health Insurance Option
For individuals looking for affordable coverage, the public health insurance option is only one of many paths.
Healthsharing plans, though not traditional insurance, often cost less for people who don’t qualify for large ACA subsidies. These plans are not for everyone, particularly those with pre-existing conditions, but they can be an alternative for some households.
ACA-compliant plans with federal subsidies also remain the most common choice. For many, these subsidies significantly reduce premiums and out-of-pocket costs, depending on income and household size.
Consumers should evaluate total value, not just premiums, when comparing plans. Look closely at deductibles, provider networks, and plan availability in your area.
Is the Public Option Still a Viable Solution?
The public option continues to be a politically popular idea, but real-world execution has revealed major challenges.
States like Washington and Colorado show that controlling costs without disrupting provider networks is difficult. Without enough participation from both patients and providers, these plans cannot scale effectively.
The concept of a public option may evolve, but any successful model will likely need to balance affordability, provider reimbursement, and consumer access more carefully.
If you are considering coverage options, comparing both public and private alternatives is essential. You can speak with a licensed Personal Benefits Manager at HSA for America to review your options and get a personalized recommendation.
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Wiley is President of HSA for America. He believes that consumers should have choice and price transparency, so they can make the best healthcare decisions for their needs. Read more about Wiley on his Bio page.
