The Commonwealth Foundation
Richard Scheffler, PhD
April 1, 2022 – September 30, 2022
About the Project
The goal of our project is to develop a viable approach to a state-run public option in
California. We will measure our success by (1) California embracing our approach to a public
option and (2) other states finding our approach useful as a starting point for developing and
implementing their own public options.
State legislation has demonstrated the need for extensive research prior to adopting and
implementing a public option: almost all the states considering a public option had a preemptive
research report. Our goal is to produce this report for California and at the same time offer
guidance to other states with integrated healthcare delivery systems that are potentially interested
in developing a state-based public option.
For this project, we will begin by reviewing what other states have done (or are thinking
of doing) with respect to a state-run public option and discuss the lessons learned and
implications for California. We will then describe and discuss the strengths of California’s
healthcare delivery system to provide higher quality, lower cost care under a public option model
operating under risk-adjusted capitation rates. Next, we will detail how CAL Choice — our
proposed dual approach to a public option for California — will be competitive on the California Exchange. This will be followed by an analysis of implementation issues based, in part, on
interviews with a number of key stakeholders. We will conclude by presenting a number of
options and associated recommendations for the California Legislature and Governor’s Office to
consider as well as a discussion of how other states can use our approach as a blueprint for
creating their own state-run public options.