What This Is, and What It Is Not
Let's be clear about the goal from the start. This proposal the Public Option Beta Test, established in draft legislation as the Public Option Healthcare and Insurance Pilot Act of 2026 is a public option. It is not universal healthcare, and it is not the end of private insurance or private hospitals.
Universal healthcare has worked well in some countries, and it deserves honest credit for that. But it is not a perfect system, and we should be honest about that too. It does not eliminate the high individual cost of healthcare it moves the cost. And in countries like Canada and the United Kingdom, patients sometimes face long waits for specialist care and elective procedures. Some of those patients travel abroad for faster treatment, including to the United States. Copying those systems wholesale is not the plan.
The plan is choice. Private hospitals stay. Private insurance stays. What gets added is a public alternative that anyone can use. Think of the VA hospital system, which already operates public hospitals across the country except these would be open to everyone, not only veterans. A patient could go to a private hospital or a public option hospital. They could pay with private insurance or with a public option insurance plan. Not exactly, but roughly in the spirit of Kaiser Permanente: an insurance plan and a hospital system designed to work together except public, and existing alongside the private market rather than replacing it.
If the public option is good, people will use it. If private care serves them better, they will use that. Either way, the patient decides. That is the whole idea.
Phase One: Two Hospitals, Two Models
The Public Option Beta Test begins with two hospitals, chosen to prove two things at once. First, that the federal government can build a modern hospital where one is needed and does not yet exist. Second, that it can step in to save a hospital on the edge of closing before the community loses it. These are the two ways communities lose access to care, and Phase One is built to answer both.
The First Hospital: Build New in Alaska
Alaska is the hardest place in the country to reach a hospital. More than eighty percent of the state has no connection to the road system, and it is one of only five states with no Level I trauma center anywhere inside its borders. At the same time, the Matanuska-Susitna Borough north of Anchorage is the fastest-growing region in Alaska, and it is served by a single hospital that runs at or near capacity almost every day.
Phase One proposes building a new federal hospital in the Mat-Su region, designed to serve as Alaska's first Level I trauma center. It would sit within reach of the Anchorage corridor and the planned B2A Railway terminus, giving the fast-growing communities of the Valley a modern facility built for the population they have today and the growth already coming.
The Second Hospital: Rescue One at Risk of Closing
A March 2026 analysis by Public Citizen identified 446 hospitals across the country at heightened risk of closure, together holding roughly 69,000 beds and serving 6.6 million patients a year. Washington State is not spared. One possible hospital to be acquired is Astria Toppenish Hospital in the Yakima Valley, which has already cut services, including its labor and delivery unit, and sits on a list of hospitals considered at risk. It is an example of the kind of facility this program is built to save; the final selection would follow a formal review of need, cost, and community support.
Phase One proposes federal acquisition and stabilization of one such at-risk hospital taking it off the closure list, restoring the services it has lost, and running it as the second site in the beta test. Saving a hospital that already exists is faster and cheaper than replacing one after it dies. Delaware County, Pennsylvania is the proof.
What Happened in Delaware County
In 2016, a for-profit company called Prospect Medical Holdings acquired the four-hospital Crozer Health system in Delaware County, Pennsylvania, one of the most densely populated suburban counties in America. In 2018, Prospect borrowed 1.1 billion dollars against its own holdings and paid roughly 457 million of it out to investors. Its hospitals deteriorated. In 2022, two of them closed. In early 2025, Prospect filed for bankruptcy, and that spring it shut down the last two, Crozer-Chester Medical Center and Taylor Hospital.
The closures left nearly 600,000 residents with only two remaining hospitals, neither of them a trauma center, and cost about 2,600 people their jobs. The effects were immediate and measurable.
Ambulance trips to hospitals became more than three times longer than they had been in 2018. Average emergency response times rose from about eight minutes to about twelve, and reached as high as twenty-eight minutes in some communities. Riddle Hospital, one of the two survivors, saw its monthly psychiatric caseload jump from about twenty patients to roughly one hundred forty almost overnight, because Crozer had run the county's only around-the-clock crisis center.
In the first two months after the closures, the county Medical Examiner identified fourteen death-related cases in which Crozer or Taylor would have been the closest hospital at the time. The Medical Examiner was careful to say it did not determine whether a closer hospital would have changed any of those outcomes. The number is not a body count. It is a measure of how far, and how suddenly, care moved out of reach.
The Slow Uncertain Road Back
More than a year later, both hospitals remain closed. Each was eventually bought by a private investor promising to restore services, but the timelines are measured in years, not months, and depend on finding an operator willing to take them on. Crozer-Chester's new owners describe a phased reopening over two to three years at a fraction of the hospital's former size. This is what it looks like when a community is left to the private market to rescue its own hospital after the fact: a health care desert that can take years to reverse, if it reverses at all.
The lesson is simple. It is far better to catch a hospital before it falls than to rebuild a community's care from the rubble afterward. That is why Phase One does both at once. It builds where nothing exists, and it rescues what is about to be lost.
Scaling the Program
Phase One is a beta test. If it works, if a federally built hospital and a federally rescued hospital can deliver care well and sustainably alongside the private system, the program expands, and the same two needs scale with it. Across the country there will be growing communities that need a hospital built where none stands today, and there will be existing hospitals on the edge of closing that must be acquired and saved before their communities lose them. Every expansion of this program will carry both tracks: build new where it is needed, and rescue what is at risk. The private market stays. The public option grows only as far as it earns the public's trust. The beta test proves the model. The country decides how far it goes.
PROPOSED LEGISLATION
Public Option Healthcare Innovation and Pilot Act (POHIPA) -- Phase One
Section 1. Title
This Act shall be known as the "Public Option Healthcare Innovation and Pilot Act of 2027."
Section 2. Purpose
The purpose of this Act is to:
Establish a regional, publicly funded public option healthcare pilot program that operates alongside, and does not replace, private insurance and private hospitals.
Evaluate real world healthcare delivery across the dimensions of cost, access, outcomes, and operational feasibility.
Create a scalable, data driven model to inform any future expansion of a national public option.
Section 3. Authorization of Funds
(a) Establishment of Pilot Facilities
There is authorized to be appropriated $16,000,000,000 for the following purposes:
Constructing a new federal hospital in the Matanuska-Susitna Borough of the State of Alaska, designed and certified to operate as a Level I trauma center.
Acquiring, through voluntary negotiated purchase, one existing hospital determined by the Secretary to be at heightened risk of closure, and stabilizing, refurbishing, and restoring services at that facility for public operation.
Hiring qualified public health and hospital administration personnel.
Funding immediate startup and infrastructure development costs.
(b) Facility Selection
The at-risk hospital acquired under subsection (a) shall be selected by the Secretary following a formal review of medical need, acquisition and stabilization cost, and community support, with priority given to facilities that have already reduced or eliminated essential services. One example of a facility that may meet these criteria is Astria Toppenish Hospital in the Yakima Valley of Washington State, which has reduced services including its labor and delivery unit.
(c) Operational Budget
An additional $1,000,000,000 per fiscal year for five fiscal years is authorized for:
Hospital operations, staffing, maintenance, and healthcare delivery.
Data collection, health information technology systems, community outreach, and research.
Any unspent funds shall be placed into a reserve fund managed by the Secretary of Health and Human Services.
Section 4. Patient Eligibility and Enrollment
(a) Eligibility
All residents living within a 30 mile radius of either facility shall be eligible to enroll in the Public Option Health Plan (POHP).
Enrollment shall be entirely voluntary and shall not disqualify enrollees from maintaining existing private insurance, Medicare, Medicaid, or VA benefits.
(b) Services Covered
The POHP shall cover:
Primary and specialty care
Emergency and inpatient services
Prescription drugs
Preventive care
Mental and behavioral health services
Vision and dental services
Long-term care based on documented medical need
(c) Payment Structure
Enrollees shall pay no out of pocket costs for any covered services.
Private insurance may continue to be used for all services or for services not covered under the pilot program.
(d) Non-Displacement of Private Care
Nothing in this Act shall be construed to limit, penalize, or discourage the operation of private hospitals or private insurance plans, or to require any resident to enroll in the POHP.
Section 5. Data Collection and Reporting
The Secretary of HHS shall oversee independent evaluation of the following metrics:
Cost per patient and per procedure
Health outcomes
Staffing and operational efficiency
Patient satisfaction and enrollment trends
Annual reports shall be submitted to Congress beginning one year after program launch. A final comprehensive evaluation report shall be submitted to Congress by the end of Year Five.
Section 6. Sunset and Transition
Unless extended by Congressional reauthorization, the pilot program shall sunset six years after initial funding is appropriated, allowing one year for orderly program wrap up and participant transition. All data collected during the program shall be transmitted to Congress and used to determine the feasibility of Phase Two implementation in additional regions of the country, including construction of new hospitals where they are needed and acquisition of additional hospitals at risk of closing.
Section 7. Definitions
"POHP" means the Public Option Health Plan established under this Act.
"Secretary" means the Secretary of Health and Human Services.
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