This week Washington Governor passed the nation’s first Medicaid buy-in law.  The new law will offer a new health insurance option to people who make too much money to qualify for Medicaid but not enough to afford private health coverage. 

Washington’s new law directs their state Medicaid agency to contract directly with at least one private health insurer to offer a “qualified health coverage” plan that meets Affordable Care Act standards on the state’s marketplace. It will expand subsidies to people making up to 500% of the federal poverty line, or $62,450 a year, for a single person.

The tiered public plans are expected to be up to 10% cheaper than comparable private insurance, in part because of savings from a cap on rates paid to providers. The WA public plans are set to be available to all residents regardless of income by 2021.  Here’s more info in a Time Magazine article from this week.

In addition to Washington, legislation to study or start a public option or Medicaid buy-in program is currently pending in Colorado, Connecticut, Maine, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey and Oregon.

The basic idea is to leverage the buying power of state Medicaid programs to negotiate better premium rates that offer a lower-cost alternative to the health-care marketplace and spur competition which would lower premiums overall.