OLYMPIA, Wash. (AP) — A plan to create a public health insurance option in Washington cleared the state Legislature Saturday evening, and it is heading to Gov. Jay Inslee for his signature.

After versions of the bill circulated between the House and Senate, the Senate approved a compromise version 27-21 Saturday evening. The same version was earlier approved by the state House.

Dubbed Cascade Care, the proposal would create a state-contracted insurance option that would be offered by 2021, at what backers say will be a discounted rate.

The passage also marks a win for Inslee, who announced he was running for president in March, on a high-profile national issue. The bill that passed Saturday had been officially requested by Inslee, although individual sponsors carried it in both the House and Senate.

The measure would also require officials to plan — but not implement — expanded subsidies for private insurance, including for part of the state’s middle class, and require private insurers to move to offering standardized plans on the state exchange, although they would also be able to offer non-standard plans.

In brief remarks as part of marathon late-night voting in the closing days of the state legislative session, backers repeated what they have described as the central argument in favor of the bill: That it will lower costs for consumers.

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“This bill has a lot of support from many of the major health care associations,” said Sen. David Frockt, the Seattle Democrat who sponsored the bill. “This is going to have better cost-sharing, and Washingtonians will be much better off for it.”

Under the bill, the state would essentially hire insurance companies to offer two individual health insurance plans at different coverage levels on its behalf. Individuals would be able to find and purchase them on the state’s health exchange website, just like any other plan.

The state would determine the outlines of the plans, while the companies would handle the work of enrolling customers and paying out claims.

But the bill has provoked criticisms from Republicans who say that it amounts to state meddling in private markets and could ultimately lead to the reduced availability of health care, especially in rural areas.

“We are worried that this will distort the market,” said Sen. Steve O’Ban, a University Place Republican.

Much of the criticism from Republicans has centered on a key mechanism in the plan: A rate cap, limiting the amount it pays health care providers to 160 percent of the rate set in federal Medicare plans.

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Backers have portrayed that as a middle ground, meaning the plan will pay providers more than the leanest federal plans but not as much as pricey private plans, and pass the savings on to consumers in the form of cheaper premiums than they would find on the individual market.

But during debate over the bill ahead of Saturday’s vote, O’Ban said he was worried that providers might drop their poorest patients in order to cover the cost of accepting patients on the state plan.

Republicans have also predicted the plan could create coverage “deserts,” especially in rural areas, where people might be able to afford the bargain plan only to find no doctors accepted it.

The plan also generated muted criticism from some Democrats, who have said the state should move more directly toward an entirely state-run system.

Still, backers of the plan generally cast it as a step forward Saturday. Democratic Sen. Karen Keiser, of Kent, said the state had in the past provided a limited coverage plan without causing problems.

“Providers took the patients happily,” Keiser said. “We can go for a future with the same kind of competitive rates and popular plans.”