Carper’s one-page document explaining his new strange hybrid “alternative” idea has been published by Politico. According to the document, states would have the option of implementing one of the following:

1. Participate as grantees in the CO-OP program and apply for seed funding.
2. Open up that state’s employee benefits plan.
3. Create a state administered health insurance plan with the option of banding together with other states to create a regional insurance compact.

The state-based public plans, if they were formed, would be restricted to only being offered on the new exchanges. The state-based public plans would have trouble getting started because they wouldn’t be allowed to piggy back on existing public programs. Given the restrictions placed on the state-based public plans, it is hard to picture how most of them would be able to successfully get up and running, or drive down premiums.

Regardless of the mechanism chosen, the state would be bound by the same insurance regulations and benefit requirements as private plans in the exchange. The mechanism would have to be completely self financed, aside from initial seed funding, and would be required to have a reserve fund in the same manner that private plans have. The mechanism could not explicitly require doctors to participate, nor use provider participation in Medicare or other public programs to force participation. Additionally, the state could not use Medicare or Medicaid style price controls or rates – they would have to negotiate rates.

Despite earlier reporting, Carper’s document does not contain a “trigger,” but would require both the state legislator and governor to agree to create a public option. This does not mean a trigger could not be attached to this proposal, or the idea of attaching a trigger to Carper’s idea is not being actively considered.