Nearly two decades ago, progressives fought to include a so-called public option — a government-run health plan — in the broad health care overhaul known as Obamacare. That effort failed, defeated by heavy lobbying from the insurance industry and opponents who decried it as a government takeover of health care.

But the final Affordable Care Act, which President Barack Obama signed in 2010, didn’t bar states from adding a public option plan to their state-run insurance marketplaces. In recent years, several states have done so — and others might follow as rising health care costs, the expiration of federal subsidies and Medicaid cuts make coverage less affordable and available for millions of Americans.

This year Nevada became the third state, after Colorado in 2023 and Washington in 2021, to add a public option plan to its marketplace. So far, 10,762 people have signed up, according to figures provided by the Nevada Health Authority.

The goal of such efforts, said Christine Monahan, an assistant research professor at the McCourt School of Public Policy at Georgetown University, is to provide an alternative to profit-driven private insurance companies, “and to give people an option that doesn’t have that kind of capitalistic incentive in place.”

The results so far have been mixed, however. It’s still too early to say whether the states’ public option plans, which are public-private partnerships rather than purely government-run, will significantly lower costs for consumers or pay enough to providers to ensure their continued participation.

Meanwhile, other states’ efforts to create public options have stalled. In 2024, Minnesota delayed the creation of a public option amid concerns about the lack of a dedicated funding source. Efforts in Maine and New Mexico also have faltered.

“It’s really too early to see what the right combination of design of a public option is,” said Andrew Shermeyer, a doctoral candidate in health policy at the University of Minnesota and the author of a study on the Colorado plan. “We don’t know what works and what doesn’t. So that’s a real challenge for policy makers.”

Different approaches

As public-private partnerships, the public option plans in Washington, Colorado and Nevada rely on the participation of private insurers as well as health care providers. And they have to compete for customers with the purely private plans offered on the exchanges.

“We all know health insurance is extremely, extremely unaffordable and expensive. So the challenge behind it is you have to find something that’s attractive to consumers,” Shermeyer said. “You have to find something that insurers will comply with, and you have to find something that providers will feel adequately compensated for.”

States have used a combination of carrots and sticks to make sure those things happen.

In Washington state, private insurers that sell plans on the state marketplace can choose to offer the public option plan, which is called Cascade Select, but they don’t have to. To keep costs down and premiums low, the state mandates that participating insurers pay providers within a certain range.

In the first two years that Cascade Select plans were available, many providers were unwilling to participate. So in 2023, Washington began requiring that hospitals contract with at least one public option plan. The change has expanded the availability of Cascade Select plans — as of last year, they were available in every county — and boosted enrollment: Last year, about 30% of Washingtonians who purchased coverage on the marketplace enrolled in a Cascade Select plan, up from 1% in 2021.

Laura Kate Zaichkin, director of market competition and affordability at the Washington Health Benefit Exchange, said that figure is up to 40% this year. In 2021, Zaichkin said, Cascade Select premiums were a bit higher than for many other plans on the exchange. This year, they are about $100 per month cheaper, she said.

Zaichkin said the public option is more important than ever, because of the recent expiration of federal tax credits that had dramatically lowered the costs of purchasing marketplace coverage, as well as looming Medicaid cuts.

“I would say that it is a really important lever,” she said. “It always has been, and it is even more so right now, when individual market coverage is under threat and when customers cannot afford their premiums.”

Unlike in Washington, every private insurer that participates in Colorado’s marketplace must offer versions of the state’s public option plan, which is called the Colorado Option, in every county where it sells its own plans. Colorado Option plans all offer the same benefits across insurance carriers, so companies compete based on premiums, their networks of providers and customer service.

To keep premiums relatively low, participating health insurers are required to negotiate with providers to keep costs down. If state regulators think premiums are getting too high, they can take charge of the negotiations and mandate that hospitals or providers lower their reimbursement rates.

About 14% of marketplace enrollees chose the Colorado Option in 2023 when the plan launched. In 2025, the public option accounted for nearly half of the roughly 282,500 enrollees on the exchange, the state said.

But Julie Lonborg, senior vice president and chief of staff of the Colorado Hospital Association, said limiting payments to providers could end up reducing services and access to care for patients.

“Overall, enrollment continues to grow in the program, so it is having some success from the purchasers,” Lonborg said in an email. “But it is built on a fundamentally flawed policy of rate setting on hospitals that will result in consequences. Hospitals have felt pressured into rate reductions at a time when threats to health care funding are escalating.”

One of the arguments for a public option is that it introduces competition that pushes down premiums for all marketplace enrollees, no matter what plan they choose. But in his study of the Colorado marketplace, researcher Shermeyer said the Colorado Option only lowered premiums for people who were receiving the federal subsidies; unsubsidized enrollees saw higher prices compared with people living in other states.

Kyla Hoskins, a deputy commissioner who oversees the Colorado Option program at the state’s division of insurance, disputes that finding. Hoskins cited other research that found premiums across the state, even for private plans, declined by more than $100 after the Colorado Option was introduced.

She said more people are buying the Colorado Option plan because it’s more affordable and because of its simplicity.

“Your deductibles, your maximum out-of-pocket costs, the amount you pay when you see your primary care [provider] or fill a prescription — that cost sharing is the same no matter which health insurance company is offering the plan,” Hoskins said.

“And I think that clarity that standardization provides, has been a value to consumers,” Hoskins said.

Slow start in Nevada

Like in Washington, insurers in Nevada don’t have to offer a public option plan, called Battle Born State Plans (after the state’s nickname). However, the state has given them a strong incentive to do so by tying it to Medicaid.

Around 75% of Nevada’s Medicaid enrollees receive coverage through managed care. In order to remain eligible for Medicaid managed care contracts, insurers have to submit a bid to offer a public option plan that meets certain requirements.

Those Medicaid contracts are worth “millions if not billions to carriers,” said Stacie Weeks, director of the Nevada Health Authority, which oversees the state’s Medicaid program and its insurance marketplace. “Essentially, this new contractual arrangement leverages the state’s purchasing power with its Medicaid carriers to get a better deal for consumers in the private market.”

To ensure the participation of providers, Nevada’s law requires them to be in-network with at least one public option plan to remain eligible for Medicaid, public employee and workers’ compensation payments, according to the Century Foundation, a liberal-leaning think tank. Instead of regulating reimbursement rates, Nevada hopes to keep premiums low by mandating that they be at least 5% below those of private plans.

Nevertheless, enrollment has been slower than expected.

State officials predicted that around 35,000 people would sign up in the first enrollment period. The actual number is less than a third of that. And so far, only three out of the state’s eight health insurance companies on the state’s exchange have picked up the plan.

“We expect to see this number grow over time as public awareness increases and as Nevadans continue to seek quality coverage options that help reduce their monthly costs, regardless of their income,” Weeks said. She added that many Nevadans automatically reenrolled in their previous health plans, and may not know about the public option yet.

Stateline reporter Shalina Chatlani can be reached at schatlani@stateline.org.

Ten Democratic-leaning states are using their own money to help people buy Obamacare health plans, at least partially replacing the federal tax credits that expired at the end of last year.

The state assistance, some of it offered through programs that existed before the federal subsidies expired, is helping hundreds of thousands of people lower their monthly premium payments, which otherwise would have surged to double or even triple what they were before the expiration of the federal aid. The savings can total hundreds of dollars per month.

But only New Mexico is completely filling the gap left by the expiration of the federal help by offering it to people of all incomes; for most Americans buying Obamacare plans, the end of the federal aid means much higher prices. And New Mexico and the other states that are trying to cushion the blow for their residents will face increasing budget pressures as health care costs continue their inexorable rise.

In addition to the expiration of the federal subsidies, the cost of Obamacare coverage has increased because of other factors, including labor shortages and the rising cost of prescription drugs, driven in part by the growing demand for GLP-1 drugs such as Ozempic and Wegovy.

The enhanced federal subsidies were made available by the American Rescue Plan Act in 2021 and later extended through the end of 2025 by the Inflation Reduction Act. Designed as a temporary pandemic-era measure, they helped boost the number of people buying health coverage from the insurance marketplaces created under the Affordable Care Act — Obamacare’s formal name — from 11.4 million people in 2020 to 24.3 million last year.

The enhanced subsidies were available to everyone, regardless of income. Additional federal aid provided to some of the lowest-income households entirely eliminated premium payments for some people.

Congressional leaders let the subsidies expire on Dec. 31. As of the end of last month, the number of people enrolled in marketplace coverage was down by about 1.2 million compared with last year, according to federal data.

Last year, the Congressional Budget Office estimated that the expiration of the federal subsidies would increase the number of people without insurance by 4.2 million by 2034.

Under the Affordable Care Act, each state can either use the federal government’s online insurance marketplace, HealthCare.gov, or operate its own state-run exchange. Only the 21 states plus the District of Columbia with state-run marketplaces can offer state-funded tax credits or subsidies, and at least 10 of them (California, Colorado, Connecticut, Maryland, Massachusetts, New Jersey, New Mexico, New York, Vermont and Washington) are doing so.

Matt McGough, a policy analyst at health care research group KFF, said many of the people who buy Obamacare plans “have fallen between the cracks of the health care system.”

“They might not work a job or work enough hours at a job to be eligible for health benefits. They are too young for Medicare. They make too much to be eligible for Medicaid, and they really have no other option but to go to the marketplace,” McGough said.

He warned that relatively healthy people are the ones most likely to forgo marketplace coverage rather than pay more for it. That will leave the exchanges with the people who have the greatest health needs, raising costs and premiums for everyone. To avoid that scenario, he said, states “want to be able to keep as many people in the marketplace as possible.”

A big commitment in New Mexico

In New Mexico, Democratic Gov. Michelle Lujan Grisham and state lawmakers earlier this year tapped the state’s 5-year-old Health Care Affordability Fund for an additional $17.3 million so they could entirely replace the expired federal subsidies through June 30 for all enrollees, regardless of income.

The vast majority of the 82,400 New Mexicans who buy coverage from the state marketplace are eligible for state help. Perhaps as a result, New Mexico is one of only a handful of states where the number of people buying Obamacare plans has increased this year: Enrollment is up 18% in New Mexico, while there have been single-digit increases in the District of Columbia, Maryland and Texas.

“We feel really great about having come together to really focus on these affordability challenges for New Mexicans, and really proud of the gains that we’ve made in coverage while we’re seeing losses elsewhere,” said Kari Armijo, cabinet secretary for the New Mexico Health Care Authority. She noted that a handful of Republican state lawmakers have joined Democrats in supporting the aid.

The money in New Mexico’s Health Care Affordability Fund comes from a 3.75% surtax levied on insurance companies. When the fund was created, the surtax was expected to generate about $165 million in new revenue annually.

Currently, the state uses nearly half of the revenue from the surtax to fund other parts of its budget. But the New Mexico House earlier this month approved a bill that would gradually increase the portion of the surtax allocated to the Health Care Affordability Fund, from the current 55% to 100% in 2028.

Legislative financial analysts recently questioned the long-term sustainability of that approach. Armijo acknowledged that continuing to replace the expired federal subsidies “will deplete the fund over time.”

“It is a pretty substantial amount of money, and it is going to strain the programs that we can provide with that funding,” Armijo said.

Paul Gessing, president of the Rio Grande Foundation, a conservative-leaning think tank in New Mexico, said the state is “flush with oil and gas money” now, enabling it to “spend money in ways that don’t make a great deal of sense for the population as a whole and instead benefits a small sliver of relatively well-off New Mexicans.”

Gessing said the state should focus on reducing health care spending by recruiting and retaining more doctors and nurses to lessen its shortage of providers and by overhauling medical malpractice laws.

“I don’t think the state should make it a practice to use state funds to fill in the gap when federal funding is shifted or eliminated,” Gessing said.

Other states

In California, where 1.9 million people were enrolled on the state’s exchange in 2025, enrollment is already down by 32% from last year, according to state figures.

The state has opted this year to spend $190 million to fully replace the lost federal subsidies for people earning up to 150% of the federal poverty level ($23,940 for an individual), and partially replace them for people making between 150% and 165% of the federal poverty level — just above eligibility for Medicaid in the state. About 390,000 enrollees are receiving the state-based subsidies this year.

Like New Mexico, California in 2021 created a Health Care Affordability Reserve Fund, funded through general revenue and penalties some people have to pay when they file their taxes.

The state budget Democratic Gov. Gavin Newsom proposed last month envisions a “modest projected deficit” of $2.9 billion for fiscal year 2026-2027, but that could grow to $22 billion the next year. California has a total annual budget of about $350 billion.

“Any amount of money that you can put into affordability is meaningful,” said Jessica Altman, executive director of California’s marketplace. “Thinking about those trade-offs is a challenging conversation, but an important one at the state level.”

In Colorado, the state is offering financial help through a new program called the Colorado Premium Assistance program. It came together during an August 2025 special session, when Colorado lawmakers approved up to $110 million this year to partially replace the federal subsidies. Help will be available to anyone making between 133% and 400% of the federal poverty level, or between $43,890 and $132,000 for a family of four.

“It is clear that this is a value for Coloradans. And having a state based marketplace like we do in Colorado, it really allows us to develop state-specific solutions and have our policies and changes driven by the needs of the people who live here,” said Nina Schwartz, chief policy and external affairs officer for Colorado’s marketplace.

Schwartz emphasized, however, that the state help won’t entirely replace the expired federal aid, and that as a result, the number of people buying coverage on the exchange is declining. Cancellations are up 83% compared with last year.

“We’re seeing an increase in the number of cancellations, with the number of people nearly doubling who canceled their plans during open enrollment compared to last year,” she said.

Other states also are opting for limited assistance. Connecticut, for example, is offering aid to households with incomes up to 200% of the federal poverty level, and the state announced it would spend $115 million in 2026 to partially offset the expiration of the federal subsidies.

Massachusetts has set aside $250 million to enhance its existing state subsidy program, helping to keep around 270,000 enrollees with incomes below 400% of the federal poverty level enrolled with stable premiums. As of early January, around 25,000 people in Massachusetts had already canceled their marketplace plans.

Maryland has a new premium assistance program that fully replaces the federal aid for enrollees earning below 200% of the federal poverty level and partly replaces it for those earning between 200% and 400% of the federal poverty level. Since last year, New York has offered help to marketplace enrollees with incomes up to 400% of the federal poverty level. And since 2023, Washington has offered state subsidies to anyone earning below 250% of the federal poverty level.

Stateline reporter Shalina Chatlani can be reached at schatlani@stateline.org. 

Last month, the parents of a 7-year-old girl whose nose wouldn’t stop bleeding took her to Portland Adventist Health in Portland, Oregon, for urgent care. Before the family could get through the doors, federal immigration agents reportedly detained them in the parking lot and took them to a detention center in Texas.

At Hennepin County Medical Center in Minneapolis, workers say U.S. Immigration and Customs Enforcement officers hang around the campus, asking patients and employees for proof of citizenship. Last month, tensions came to a head when ICE agents used handcuffs to shackle a 31-year-old Mexican immigrant to his hospital bed. ICE claimed the man, who had broken bones in his face and a fractured skull, had run headfirst into a wall on purpose while handcuffed and trying to flee.

And last summer, ICE agents chased an immigrant into the Ontario Advanced Surgery Center in Ontario, California, precipitating a confrontation with two surgery center workers wearing scrubs. The two workers were later indicted by a federal grand jury, charged with assaulting and interfering with federal immigration officers.

As the Trump administration intensifies its immigration crackdown, health care workers in multiple states say ICE is increasing its presence in health care facilities, deterring people from seeking medical care and creating chaos that jeopardizes the safety of their patients.

Even before Trump took office last year, Republican-led states such as Florida and Texas began mixing health care and immigration enforcement by requiring hospitals to ask patients about their immigration status. Now that ICE has extended its enforcement activities to hospitals and health care facilities — areas that were largely off-limits during the Biden administration — an increasing number of Democratic-led states are pushing back.

Last month, Massachusetts Democratic Gov. Maura Healey filed legislation “to keep ICE out of courthouses, schools, child care programs, hospitals and churches,” and signed an executive order to limit ICE actions on state-owned property.

In December, Illinois Democratic Gov. JB Pritzker signed a measure that bars health care providers from sharing sensitive health information with federal immigration agents and requires hospitals to develop policies around how they will interact with agents.

And in September, California Democratic Gov. Gavin Newsom signed legislation that makes immigration status and place of birth protected health information, and prohibits agents from entering nonpublic, patient-sensitive areas of health care facilities without a warrant signed by a judge.

Other Democratic states — including Maine, New Jersey, New York, Oregon and Washington — are considering similar bills.

Meanwhile, Republican lawmakers in Arizona are pushing legislation that would require hospitals accepting Medicaid patients to include a question on intake forms about immigration status.

Skipping medical care

Whether or not ICE presence is actually increasing at health care facilities, it’s clear that people living in the country illegally are being deterred from seeking medical care, said Drishti Pillai, director of immigrant health policy at the health policy research group KFF.

A KFF and New York Times survey released last November showed that 43% of respondents identifying as immigrant parents living in the country illegally skipped or delayed health care for their children over a 12-month period because they were concerned about immigration enforcement. Even among lawfully present immigrants,10% said that they avoided seeking medical care for their children due to immigration-related concerns.

Pillai also pointed to the Trump administration’s efforts to consolidate the bits of personal data held across federal agencies, creating a single trove of information on people who live in the United States.

“We are expecting that these fears have further been exacerbated this year since the data sharing agreement was made public, and there are certain concerns around privacy of data going forward,” Pillai told Stateline.

Dr. Paula Latortue, an OB-GYN in Washington, D.C., who volunteers with the Migrant Clinicians Network, a nonprofit group that provides health care to immigrants, said it’s unclear how many people are avoiding health care, and how often.

“The one part that is really hard to know is people who are not showing up to the hospital when they usually would for some sort of urgent or emergency complaint,” Latortue said in an interview. “But I think there’s a concern for many physicians in the community that has happened.”

States step in to protect sensitive locations

The Biden and Obama administrations directed ICE to avoid enforcement activities in “sensitive” places such as hospitals, schools and churches unless it received permission from top leaders at the U.S. Department of Homeland Security.

In January 2025, however, the Trump administration rescinded those guidelines, opening up these spaces to immigration enforcement.

Stateline reached out to the White House and the Department of Homeland Security multiple times but did not receive a response. When the administration changed the guidelines, the Department of Homeland Security said that opening up “sensitive” areas to agents “empowers the brave men and women in CBP [Customs and Border Protection] and ICE to enforce our immigration laws.”

The previous guidelines didn’t prohibit ICE from operating in those locations, but it did “strongly discourage” them, according to Sophia Genovese, a legal fellow specializing in immigration law at Georgetown University.

She added, however, that states and cities can enact laws to protect such spaces, even though they are limited in their capacity to “infringe and engage in immigration lawmaking.”

“Warrants are always needed to conduct searches or investigations in private, nonpublic areas, and these warrants need to be signed by a judge. This is just a basic Fourth Amendment right,” Genovese said. “When it comes to ICE entering hospitals and gaining access to private areas of hospitals, that’s an issue of individual hospital policy.”

Genovese said states also can require that hospitals standardize their policies on where law enforcement agents can go within a medical facility and create protocols to ensure agents are presenting a warrant before entering the premises.

Health care workers want protections

Those moves are exactly what health care workers in many states are asking for.

“There’s a high level of fear and anxiety. Nurses see the videos of what’s happening around the country, and nurses have experienced it themselves,” Peter Starzynski, spokesperson for the Oregon Nurses Association, told Stateline.

Last month’s incident involving the 7-year-old girl and her parents in Portland highlighted the importance of protecting health care spaces from ICE, he said.

“That should never happen. That’s disgusting,” Starzynski said.

The Oregon Nurses Association also has condemned ICE’s presence at Legacy Emanuel Medical Center in Portland, claiming agents are violating hospital policies, including on access to patients. Legacy has disputed the union’s allegations, saying that no ICE officers have entered its facilities “unless accompanying a patient in custody.”

“Nurses in emergency rooms deal with local law enforcement on a regular basis, and those relationships are built on mutual respect, where law enforcement understands what they need to do once they enter a hospital,” Starzynski said. “That has changed with the increase in federal agents in Oregon.”

Stateline reporter Shalina Chatlani can be reached at schatlani@stateline.org.