A newly proposed federal bill would create a government-run public health insurance option sold on the ACA exchanges and permanently extend the enhanced premium subsidies that lapsed at the end of 2025.
The Medicare-X Choice Act, introduced July 15 by Rep. Angie Craig, D-Minn., would establish a “Medicare Exchange health plan,” on the individual and small group markets beginning in 2028. The public plan would be offered at silver and gold levels and would waive all cost-sharing for primary care.
The plan would reimburse providers at traditional Medicare rates, with authority for the HHS secretary to raise rural rates by up to 50% and negotiate prescription drug prices. Providers that accept Medicare or Medicaid would be required to participate in the public plan, with a narrow opt-out provision limited to cases where participation threatens a provider’s ability to operate. Premiums would be set to cover the plan’s full actuarial and administrative costs and would vary by geography and market.
Separately, the bill would make the enhanced ACA premium tax credits permanent by striking the 400% poverty line subsidy cliff and codifying the “family glitch” fix, effective after 2026. It would also fund a national reinsurance program at $10 billion a year from 2028 through 2030, repeal the Medicare drug-price noninterference clause, and provide $50 million to the Justice Department’s antitrust division and $100 million to the Federal Trade Commission each year from 2027 through 2031 for healthcare market enforcement.
In January, Sens. Sheldon Whitehouse, D-R.I., and Elissa Slotkin, D-Mich., introduced the Affordable CHOICE Act, which would allow HHS to offer a public option through the exchanges in 2027 at bronze, silver and gold levels. The bill proposes paying providers at rates the secretary negotiates, defaulting to Medicare fee-for-service rates if no agreement is reached, and would automatically enroll Medicare and Medicaid providers unless they opt out. Unlike Medicare-X, it’s limited to the individual market and does not address premium subsidies, reinsurance or drug pricing.
Both Democratic bills stand apart from the Republican-backed Choice Arrangement Act, introduced in September by Rep. Kevin Hern, R-Okla., which proposes codifying individual coverage health reimbursement arrangements (ICHRA) as “CHOICE” arrangements, relying on employer funding to help workers buy individual market coverage.
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