State Public Option Act

This bill lets states offer a new, low-cost health plan through Medicaid starting in 2026. People who live in the state, aren’t eligible for regular Medicaid, and aren’t already covered elsewhere could choose to buy this plan. States could charge premiums and copays, but family premiums would be capped at 8.5% of household income, and out-of-pocket limits would follow Affordable Care Act rules. People could also get premium tax credits and cost-sharing help, similar to plans on the marketplace, and sign up through the state’s health insurance exchange during normal enrollment periods .

The bill also boosts primary care by requiring Medicaid to pay at least Medicare rates for primary care and by including more types of providers, like OB-GYNs and nurse practitioners, with rules to ensure managed care plans pay those rates too . It gives states a stronger federal match if they expand Medicaid in the future, no matter when they expand. And it requires Medicaid to cover comprehensive sexual and reproductive health services, including abortion, beginning January 1, 2026 .

Key points

• Who is affected: State residents not eligible for Medicaid and not enrolled in other coverage; Medicaid patients and providers; states considering Medicaid expansion .
• What changes: New Medicaid “buy-in” option with capped premiums and ACA-style cost-sharing protections; access to premium tax credits; higher Medicaid pay for primary care and more included providers; required coverage of sexual and reproductive health services, including abortion .
• When: Buy-in begins January 1, 2026; reproductive health coverage applies on or after January 1, 2026 .