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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.
What the Medicare-X Choice Act Would Offer Consumers
The public plan would be offered at silver and gold levels and would waive all cost-sharing for primary care, a design intended to make preventive and routine visits more accessible for enrollees choosing the public option over private plans.
How Providers Would Be Paid Under Medicare-X
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.
How Premiums Would Work Under the Medicare-X Choice Act
Premiums would be set to cover the plan’s full actuarial and administrative costs and would vary by geography and market, meaning the public option would be designed to be self-sustaining rather than subsidized directly by federal appropriations for its baseline operating costs.
Making Enhanced Subsidies Permanent
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. This provision addresses two of the most significant sources of instability in ACA marketplace affordability that have driven recent enrollment declines nationwide.
Additional Provisions in the Medicare-X Choice Act
The bill 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.
A Broader Package Than Other Competing Bills
This combination of a public option, permanent subsidies, reinsurance funding, drug pricing authority, and antitrust enforcement funding makes the Medicare-X Choice Act a notably broader legislative package than either of the other bills currently circulating in Congress addressing similar issues.
How the Affordable CHOICE Act Compares to Medicare-X
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.
Key Differences Between the Two Democratic Bills
Unlike Medicare-X, the Affordable CHOICE Act is limited to the individual market and does not address premium subsidies, reinsurance or drug pricing, making the Medicare-X Choice Act a more comprehensive approach compared to its Senate counterpart, even though both share the core goal of establishing a public insurance option.
How the Republican-Backed Choice Arrangement Act Differs
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 as “CHOICE” arrangements, relying on employer funding to help workers buy individual market coverage.
Fundamentally Different Philosophies
This contrast highlights a fundamental philosophical divide in how lawmakers are approaching individual market reform: the Medicare-X Choice Act and Affordable CHOICE Act both rely on a government-administered public plan competing alongside private insurers, while the Choice Arrangement Act instead expands an employer-funded model that channels workers toward existing private market options rather than creating new public competition.
What This Means for the Future of ACA Marketplace Reform
With three distinct legislative approaches now in play, the Medicare-X Choice Act, the Affordable CHOICE Act, and the Choice Arrangement Act, the debate over how to stabilize and reform ACA marketplace coverage is likely to remain a significant point of partisan divergence heading into upcoming legislative sessions. Given the scope of Medicare-X’s provisions, spanning public option creation, permanent subsidy extension, reinsurance funding, drug pricing authority, and antitrust enforcement, its introduction adds substantial new detail to the broader conversation happening amid declining ACA enrollment and rising premiums nationwide.
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