When the federal government becomes hostile to your survival, you stop asking it for permission to…

When the federal government becomes hostile to your survival, you stop asking it for permission to survive.

Republicans control Congress and intend to dismantle Medicare and Medicaid. They have said this explicitly and repeatedly. Twenty-seven million Americans currently lack health insurance. That number climbs when enhanced ACA subsidies expire December 31, 2025, triggering premium increases expected to average 114 percent and pushing at least another 3.8 million people into the uninsured population annually. The Heritage Foundation led federal government will not prevent this. It’s all part of the plan.

Blue states can make that threat meaningless by building healthcare systems that function regardless of federal policy. This article covers three solutions, each viable independently. Washington and Colorado already proved the first one works.

Here is what happened in Washington State in 2021.

Washington proved the model works but stopped short of using the full extent of state power. They could have mandated the 160 percent cap for all individual market plans sold in the state, not just the voluntary Cascade Select program. What they did mandate was hospital participation. Cascade Care 2.0 legislation required any hospital accepting Medicaid or public employee benefits to contract with at least one Cascade Select plan. Washington used state purchasing power to force provider cooperation but left insurer participation voluntary. Colorado took a slightly more aggressive approach by threatening to set rates if insurers didn’t reduce premiums, but still left the door open for negotiation. Both states proved the model works while simultaneously proving that blue states keep negotiating when they should be imposing terms.

In 2023, Colorado launched the Colorado Option. Same basic idea, slightly different execution. The state told insurers operating there to reduce premiums by 15 percent over three years or the state would start setting reimbursement rates for them. The insurers could either negotiate lower rates with hospitals themselves or the state would do it for them. Most chose to negotiate. Twenty-five individual market plans and 24 small-group market plans hit the 10 percent reduction target in the first year. The federal government calculated Colorado would save 214 million dollars in 2023 alone just from reduced premium subsidy payments.

Neither state built a government-run insurance company. They changed the rules about what private insurers had to do if they wanted access to the market.

Now imagine every blue state doing this together in an unofficial interstate compact.

The compact creates binding standards: cap hospital reimbursement at 150 percent of Medicare rates, offer standardized plans so consumers can actually compare them, operate in every county where you do business, cut premiums 20 percent over three years.

California, New York, Illinois, Washington, Colorado, Massachusetts, Oregon, Connecticut, New Jersey, Maryland, Virginia, Minnesota, New Mexico, Hawaii, Delaware, Rhode Island, Maine, Vermont. These states represent over 140 million people and roughly 43 percent of the national insurance market. No major insurer can afford to abandon 43 percent of the national market. The insurers know this. The states know the insurers know this. The negotiation is therefore straightforward.

The Congressional Budget Office projects enhanced ACA subsidies will cost the federal government 335 billion dollars over ten years. A compact achieving 20 percent premium reductions saves member states tens of billions annually while extending coverage to 3 to 5 million additional people. The money comes from eliminating the excessive margins hospitals and insurers currently extract. Nobody has to raise taxes. The system just becomes more efficient because states collectively have enough market power to force efficiency.

That is the first approach. It requires no new infrastructure, no government employees, no capital investment. Just new rules about how private companies operate.

The second approach requires all of those things.

Blue states willing to commit pool 10 to 20 billion dollars and create a fully state-owned nonprofit insurance company. Not a contractor like Centene or UnitedHealth running a Medicaid managed care plan, but actual state-owned corporations that sell insurance directly to residents, compete against private insurers, and returns any surplus to policyholders through lower premiums or expanded benefits rather than distributing it to shareholders who do not exist.

This already works in miniature. Oregon created the Oregon Medical Insurance Pool in 1987. Michigan runs the Ingham Health Plan, serving 16,500 people. These are small. Make them bigger. Pool resources across multiple states and the insurer becomes large enough to negotiate directly with hospital systems and pharmaceutical companies while maintaining the administrative efficiency that comes from having no profit motive.

Private Medicare Advantage plans spend 12 to 15 percent of premiums on administration and profit. Traditional Medicare spends 2 percent. A state-owned multi-state insurer could target 5 to 7 percent by eliminating executive compensation packages in the tens of millions of dollars, shareholder dividends, lobbying expenditures, and the extensive marketing campaigns private insurers use to compete against each other.

Apply that to 20 to 25 million covered lives at average premiums of 8,000 dollars annually. The overhead reduction alone saves 10 to 16 billion dollars per year.

Revenue comes from premiums, not taxes. Enrollees pay based on income-adjusted sliding scales. The insurer operates as a nonprofit. Member states govern through an interstate commission with each state appointing two members. The commission sets reimbursement rates, benefit standards, and premium targets. Individual state insurance commissioners maintain regulatory oversight. The structure provides accountability without either pure government bureaucracy or pure market discipline, both of which have obvious failure modes in healthcare.

The third approach abandons insurance entirely and just provides healthcare.

The states build hospitals. They hire doctors and nurses. They operate clinics. People pay income-based premiums for access to the system. Emergency care outside the network is covered because nobody should die from being in the wrong place at the wrong time. Routine care happens inside state-owned facilities with state-employed physicians.

California spends over 160 billion dollars annually on Medi-Cal. Redirect 10 percent of that toward capital investment and you fund 50 to 100 primary care clinics and 10 to 15 regional hospitals within five years. Partner with existing public systems in Los Angeles County, New York City, and Cook County rather than building parallel infrastructure. Expand what already works.

Kaiser Permanente demonstrates the model works in America right now. They operate approximately 40 hospitals and over 600 medical offices serving 12.5 million members with about 24,600 physicians and 73,600 nurses. A closed network. Better outcomes than fee-for-service medicine at lower cost because the economic incentives align around keeping people healthy rather than billing for procedures. Kaiser is technically a nonprofit but still generates operating income that, combined with investment returns, produced net income of $4.1 billion in 2023. That gets distributed to executives and reinvestment rather than returned to members. A genuinely public version eliminates even that.

Start with 500,000 to 1 million members in year one. Concentrate in major metropolitan areas where facility density makes economic sense. Expand to mid-sized cities in phase two. Tackle rural coverage in phase three through hub-and-spoke models where regional hospitals support satellite clinics connected by telehealth.

These three approaches are not sequential stages. A state does not need to complete the regulatory compact before building a state-owned insurer. California could start constructing hospitals tomorrow without waiting for New York to join an interstate agreement. The approaches can be pursued independently, in combination, or not at all depending on each state’s political capacity and strategic priorities. The timeline for each operates on different scales precisely because they serve different purposes within an overall strategy of building healthcare infrastructure that survives federal hostility.

The advantage of owning the healthcare infrastructure directly is simple: immunity from federal policy changes. Future Republican Congresses can gut ACA subsidies, impose Medicaid work requirements, slash Medicare funding. They cannot prevent California from building hospitals or stop New York from hiring doctors. State-owned healthcare systems work regardless of who controls Washington.

Twenty-seven million Americans currently lack health insurance. Enhanced ACA subsidies expire December 31, 2025. Without congressional action, premiums increase 114 percent on average and resulting in millions of people losing coverage starting in 2026. The federal government shows no inclination to prevent this. Republicans control Congress and have been explicit about their intentions regarding Medicare and Medicaid. They want programs that protect 100 million Americans to fail.

When democratic institutions at the federal level are captured by people hostile to their function, you build new institutions at levels they cannot control. Blue states contain sufficient population and economic resources to create healthcare systems that work regardless of who controls Washington. Not as backup plans, but as primary infrastructure that demonstrates what governance looks like when the people running it believe healthcare is a right rather than a profit opportunity.

These are not three sequential steps. They are three distinct options that can be pursued independently or in combination. A state can implement the regulatory compact without building a state-owned insurer. A state can build direct healthcare infrastructure without waiting for other states to join. The approaches scale based on political will and administrative capacity, not on completing prior phases.

Washington and Colorado proved this works. Neither state forced compliance; both negotiated terms insurers could accept or reject.

States can choose otherwise.

California’s individual market alone is larger than 40 other states combined, and insurers will not abandon that revenue. Add New York, Illinois, and Washington State, and you control access to markets no major insurer can afford to lose. They will sue, they will lobby, and they will comply.

Republicans control Congress and intend to dismantle Medicare and Medicaid. Enhanced ACA subsidies expire December 31. Build healthcare systems that function when that happens. Not better federal policy. State infrastructure that works when the federal government refuses to.

What’s the next step? The Intro to Soft Secession Booklet breaks down the constitutional authorities states already possess, the legal frameworks that protect aggressive state action, and the organizing strategies that turn policy proposals into actual institutions. Stop asking federal permission. Start building state power. Get it by clicking on any of this text that you are reading right here and now but not the text after this sentence because that text won’t take you anywhere like this text will.

Most publications report on power. W. Lawrence’s Glass Empires autopsies it. She maps the architecture of authoritarianism through history and global politics, showing how cruelty becomes political strategy and how democratic institutions fail. While The Existentialist Republic generally focuses on building alternatives, W. Lawrence documents the psychology that shapes control. Subscribe by clicking on this sentence.

References

California Health Care Foundation. (2002). State-owned nonprofit insurance companies. Connecticut General Assembly Office of Legislative Research. https://www.cga.ct.gov/2002/olrdata/ins/rpt/2002-R-0934.htm

Centers for Disease Control and Prevention, National Center for Health Statistics. (2025, June 24). U.S. uninsured rate drops by 15% since 2020. NCHS Pressroom. https://www.cdc.gov/nchs/pressroom/releases/20250624.html

Colorado Division of Insurance. (n.d.). Colorado Option. Colorado Department of Regulatory Agencies. https://doi.colorado.gov/colorado-option

Commonwealth Fund. (2023, November 7). State public option plans making progress reducing consumer costs. https://www.commonwealthfund.org/blog/2023/state-public-option-plans-are-making-progress-reducing-consumer-costs

Commonwealth Fund. (2023, January 24). States move forward with public option programs, but differ in how they select insurance carriers. https://www.commonwealthfund.org/blog/2023/states-move-forward-public-option-programs-insurance-carriers

Congressional Budget Office. (2024). Health insurance coverage projections for the US population and sources of coverage, by age, 2024–34. Health Affairs, 43(7). https://www.healthaffairs.org/doi/10.1377/hlthaff.2024.00460

Drake, C., Harbage, P., Loehrer, S., Lucia, K., & Corlette, S. (2022). Participation, pricing, and enrollment in a health insurance “public option”: Evidence from Washington State’s Cascade Care program. Milbank Quarterly, 100(1), 191–226. https://pmc.ncbi.nlm.nih.gov/articles/PMC8932631/

Health Affairs. (2025, January 13). Can public option plans improve affordability? Insights from Colorado. https://www.healthaffairs.org/do/10.1377/forefront.20250113.844529/

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Kaiser Foundation Health Plan. (2025, February 7). Kaiser Foundation Health Plan & Hospitals, Risant Health report 2024 financial results [Press release]. https://about.kaiserpermanente.org/news/press-release-archive/kaiser-foundation-health-plan-hospitals-risant-health-report-2024-financial-results

Kaiser Permanente. (n.d.). Fast facts. https://about.kaiserpermanente.org/who-we-are/fast-facts

Legislative Analyst’s Office. (2024). The 2024–25 budget: Medi-Cal analysis. State of California. https://lao.ca.gov/Publications/Report/4838

Legislative Analyst’s Office. (2024). The 2025–26 budget: Medi-Cal fiscal outlook. State of California. https://lao.ca.gov/Publications/Report/4941

MoneyGeek. (2025, October). Uninsured Americans 2025: 27M without coverage, ACA crisis. https://www.moneygeek.com/insurance/health/americans-without-coverage/

National Association of State Health Policy. (2023, February 22). Improving insurance access, affordability, and equity: Updates on the Colorado Option. https://nashp.org/improving-insurance-access-affordability-and-equity-updates-on-the-colorado-option/

PolitiFact. (2017, September 20). Comparing administrative costs for private insurance and Medicare. https://www.politifact.com/factchecks/2017/sep/20/bernie-sanders/comparing-administrative-costs-private-insurance-a/

U.S. Department of Health and Human Services. (2024, August). National Health Interview Survey: Health insurance coverage, early release of estimates from Q1 2024. https://aspe.hhs.gov/sites/default/files/documents/ee0475e44e27daef00155e95a24fd023/nhis-q1-2024-datapoint.pdf

Washington Health Benefit Exchange. (2024, November 1). Cascade Select will be available across Washington in 2025 [Press release]. https://www.wahbexchange.org/cascade-select-will-be-available-across-washington-in-2025/

Washington Healthplanfinder. (n.d.). Cascade Care plans. https://www.wahealthplanfinder.org/us/en/my-account/my-coverage/cascade-care-health-plans.html