Public health insurance option

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The public health insurance option, also known as the public insurance option or the public option, is a proposal to create a government-run health insurance agency that would compete with other

Patient Protection and Affordable Care Act, but was removed after independent Connecticut senator Joe Lieberman threatened a filibuster.[1][2]

As a result, Congress did not include the public option in the bill passed under reconciliation. The public option was later supported by Hillary Clinton and the Democratic Party in the 2016 and 2020 elections and multiple other Democratic candidates, including the current President Joe Biden.[3][4]

History

Federal

The public option was featured in three bills considered by the

America's Affordable Health Choices Act (H.R. 3200), and a third bill, the Public Option Act, also referred to as the Medicare You Can Buy Into Act, (H.R. 4789). In the first two bills, the public option took the form of a Qualified Health Benefit Plan competing with similar private insurance plans in an internet-based exchange or marketplace, enabling citizens and small businesses to purchase health insurance meeting a minimum federal standard. The Public Option Act, in contrast, would have allowed all citizens and permanent residents to buy into a public option by participating in the public Medicare program. Individuals covered by other employer plans or by state insurance plans such as Medicare would not have been eligible to obtain coverage from the exchange. The federal government's health insurance plan would have been financed entirely by premiums without subsidy from the federal government,[5] although some plans called for government seed money to get the programs started.[6]

President Barack Obama promoted the idea of the public option while running for election in 2008.[7] Following his election, Obama downplayed the need for a public health insurance option, including calling it a "sliver" of health care reform,[8] but still campaigned for the option up until the health care reform was passed.[9]

Ultimately, the public option was removed from the final bill. While the

Senate Finance Committee[10] and the public option was never included in the final Senate bill, instead opting for state-directed health insurance exchanges.[11] Critics of the removal of the public option accused President Obama of making an agreement to drop the public option from the final plan,[12] but the record showed that the agreement was based on vote counts rather than backroom deals, as substantiated by the final vote in the Senate.[13]

In January 2013, Representative

United States public debt by $104 billion over 10 years.[14] Representative Schakowsky reintroduced the bill as H.R. 265 in January 2015, where it gained 35 cosponsors.[15]

In the run-up to the

the Bernie Sanders campaign who advocated for repealing and replacing the ACA with a single-payer Medicare for All program. The Clinton campaign stated shortly before the plank was added that as president Clinton would "pursue efforts to give Americans in every state in the country the choice of a public-option insurance plan", while Bernie Sanders applauded the decision to "see that all Americans have the right to choose a public option in their health care exchange, which will lower the cost of healthcare".[16][17] The call was echoed by President Obama, who in an article for the American Medical Association stated that Congress "should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited."[18]

In the lead-up to the 2020 presidential election, the public option, "once considered too far-reaching", had become "seen as a more moderate alternative" to proposals like Bernie Sanders' Medicare for All plan.[4] A majority of candidates running in the Democratic primary, including Joe Biden and Pete Buttigieg, preferred a healthcare plan that included a public option over a single payer plan, and some candidates who preferred a single payer plan said they would also accept a public option as a compromise or step along the way to single payer, such as Elizabeth Warren, who initially said "there's no excuse for stopping at half-measures" regarding single payer, but would later pivot to supporting the enactment of a public option first before transitioning to a single payer system.[4][19]

State legislation

Attempts to implement a public option have also been made at the state level. In May 2019, a law was passed and signed in Washington for the establishment of a public option, which is the first law for a public option to be passed at the state level, and is intended make a public option plan for purchase in 2021.[20] The Cascade Select program which requires private insurance companies to provide alternative plans, known as Cascade Select plans, which are overseen, but not run, by the state; the alternative plans are sold on the ACA marketplace alongside ACA-compliant private insurance plans. The law caps provider payments on Cascade Select plans at 160% of Medicare payment rates. The Washington state law has been variably described as both a "public option" and a "public-private partnership".[21][22] Similar legislation was passed in 2021 in both Colorado and Nevada.

New Mexico has also passed legislation establishing official studies into a state-level public option and have been pursuing further action, while Delaware, Oregon, and Massachusetts have completed similar studies looking into state-level public options but have taken no additional action, and other state legislatures have considered either outright enacting a public option or at least passing legislation to establish an official study on a potential public option plan.[23]

Rationale

See also:
Health care reform debate in the United States

The purpose behind the public option was to make more affordable health insurance for uninsured citizens who are either unable to afford the premiums of private health insurers or are rejected by private health insurers due to pre-existing condition. Supporters also argued (and proposed possible ways) that a government insurance company (public option) could put pressure on private health insurance companies to lower their premium costs and accept more reasonable profit margins, while also encouraging them to create more competitive plans with wider coverage, as well as eventually creating a more competitive, reasonably priced healthcare market across the industry by encouraging more efficient treatments and practices, and finally, eventually generating a large source of non-tax revenue for the government, which could help ease the rate of increasing budgetary deficit. Proponents proposed this would be accomplished by initially paying doctors and hospitals 4%-5% higher for claims than the average paid by private insurers but charging lower premiums than them, thus creating a more widely accepted, competitive product- making it the obvious choice and forcing private health insurers to create their own, similar reasonably priced, more full-featured insurance plans.

A public option would be able to offer such competitive options, as they would not be operating as a traditional

policy holder serving typical corporate uses, such as multimillion-dollar executive salaries and bonuses,[24] stock dividends,[25]
and excess cash flows).

Additionally, government influence and power would be leveraged to encourage (primarily) hospitals (as well as medical groups and collectives) to switch medical workers currently paid directly by insurers on a claim-by-claim basis (i.e. for each individual procedure) to instead work as cooperatively as possible, in efficient teams, and receive income in

salaries, which proponents believed would both be more efficient, and reduce the complexity associated with medical billing, simplifying both accounting and lowering overall healthcare costs. This primarily would only affect doctors, particularly specialists, such as surgeons, as most nurses and medical technicians are already paid salaried wages [26][27] as well as pressuring healthcare provider groups and hospitals to research and employ the most cost effective methods and treatments, and work in more cooperative teams, which would allow for employees to be salaried, as opposed to the current system where the highest paid workers (mainly doctors and specialized teams) are paid individually for each procedure they perform/patient they treat.[26]

Supporters of a public plan, such as

market competition do not apply to the insurance industry given that insurers mainly compete by risk selection, claiming that "[t]he most successful companies are those that do the best job of denying coverage to those who need it most."[28]

Economist and former

US Secretary of Labor Robert Reich argued that only a "big, national, public option" can force insurance companies to cooperate, share information, and reduce costs while accusing insurance and pharmaceutical companies of leading the campaign against the public option.[29][30]

Many Democratic politicians were publicly in favor of the public option for a variety of reasons. President Obama continued campaigning for the public option during the debate. In a public rally in

Houston, believed that a "vigorous public option" would be included in the final bill and would "benefit the state of Texas."[33]

Alternative plans

See also:
Patient Protection and Affordable Care Act

The final bill, the

Patient Protection and Affordable Care Act, included provisions to open health insurance exchanges in each state by October 1, 2013. As the Act requires Americans to purchase health insurance, the federal government will offer subsidies to Americans with income levels up to four times the federal poverty level.[34]

An alternative proposal is to subsidize private, non-profit health insurance cooperatives to get them to become large and established enough to possibly provide cost savings[35][36] Democratic politicians such as Howard Dean were critical of abandoning a public option in favor of co-ops, raising questions about the ability of the cooperatives to compete with existing private insurers.[8] Paul Krugman also questioned the ability of cooperatives to compete.[37]

While politically difficult, some politicians and observers have argued for a

AFL–CIO conference in 2003.[42]

A number of alternatives to the public option were proposed in the Senate. Instead of creating a network of statewide public plans, Senator Olympia Snowe proposed a "trigger" in which a plan would be put into place at some point in the future in states that do not have more than a certain number of private insurance competitors. Senator Tom Carper has proposed an "opt-in" system in which state governments choose for themselves whether or not to institute a public plan. Senator Chuck Schumer has proposed an "opt-out" system in which state governments would initially be part of the network but could choose to avoid offering a public plan.[43]

Opposition and criticism

See also:
Health care reform debate in the United States

Both before and after passage in the House, significant controversy surrounded the

health insurance exchange's private plans sold to customers receiving federal subsidies. In mid-November, it was reported that 40 House Democrats would not support a final bill containing the Amendment's provisions.[44] The amendment was abandoned after a deal was struck between Representative Bart Stupak and his voting bloc would vote for the bill as written in exchange for the signing of Executive Order 13535
.

Former Congressman and Republican House Minority Whip Eric Cantor has argued that a public plan would compete unfairly with private insurers and drive many of them out of business.[45]

inefficiencies in its administration and draw away consumers from private insurance even if the government offers an inferior product. A study by the Congressional Budget Office found that profits accounted for only about 3 percent of private health insurance premiums, and Cannon argued that the lack of a profit motive reduces incentives to eliminate wasteful administrative costs.[46][47]

Robert E. Moffit of The Heritage Foundation argued that a public plan in competition in private plans would likely be used as a "dumping ground" for families and individuals with higher than average health risks. This, in his view, would lead to costs that business should pay being passed onto the taxpayer.[48]

New England Journal of Medicine, believes that the result of a public option would be more "under-55's" opting to pay the fine rather than purchase insurance under a public option scenario, instead advocating lowering the Medicare age to 55.[49]

The chief executive of

News Hour with Jim Lehrer, Williams noted that a public option creates a situation where "you have in essence a player in the industry who is a participant in the market, but also is a regulator and a referee in the game". He said, "we think that those two roles really don't work well."[50]

Public opinion

Further information:
Public opinion on health care reform in the United States

Public polling has shown mixed support for a public option. A

The News Hour with Jim Lehrer noted that "public opinion researchers say the tide has been shifting over the last several weeks, and now is not spectacularly, but solidly in favor of a public option."[60]

Between October 28 and November 13, 2009, Democratic senator Dick Durbin's campaign organization polled Americans to rank their support for various forms of the "public option" currently under consideration by Congress for inclusion in the final health care reform bill. The 83,954 respondents assigned rankings of 0 to 10. A full national option had the most support, with an 8.56 average, while no public option was least favored, with a 1.10 average.[61]

Polls during 2019 have shown a majority support for a public option, including a Marist poll which found that 70% of Americans supported a public option while 25% opposed it,[62] a Kaiser Family Foundation poll which found that 69% of Americans supported a public option while 29% opposed it,[63] and Quinnipiac poll found that 58% of Americans supported a public option while 27% opposed it.[64]

Physician reaction

In 2009, a survey designed and conducted by doctors Salomeh Keyhani and Alex Federman of

New England Journal of Medicine in September, based on a random sample of 6,000 physicians from the American Medical Association, stated that "it seems clear that the majority of U.S. physicians support using both public and private insurance options to expand coverage."[66]

Conversely, a 2009 IBD/TIPP poll of 1,376 physicians showed that 45% of doctors "would consider leaving or taking early retirement" if Congress passes the health care plan wanted by the White House and Democrats. This poll also found that 65% of physicians oppose the White House and Democratic version of health reform.[67] Statistician and polling expert Nate Silver has criticized that IBD/TIPP poll for what he calls its unusual methodology and bias and for the fact that it was incomplete when published as responses were still coming in.[68]

In 2019, the American College of Physicians, the second largest physicians group in the United States, endorsed both single payer and a public option for US healthcare reform.[69]

See also

Notes

  1. ^ Lieberman: I'll block vote on Reid plan, By Manu Raju, Politico.com, 10/27/09
  2. PMID 20530340
    .
  3. ^ a b Alex Seitz-Wald, Democrats Advance Most Progressive Platform in Party History, NBC News (July 10, 2016).
  4. ^ a b c Gabriel, Trip (June 23, 2019). "'Medicare for All' vs. 'Public Option': The 2020 Field Is Split, Our Survey Shows". New York Times. Archived from the original on January 13, 2020. Retrieved January 22, 2020.
  5. ^ Why We Need a Public Health-Care Plan Robert Reich The Wall Street Journal
  6. ^ e.g. House Bill H.R.3962 Section 322 (b)2(B) "AMORTIZATION OF START-UP FUNDING- The Secretary shall provide for the repayment of the startup funding provided under subparagraph (A) to the Treasury in an amortized manner over the 10-year period beginning with Y1". The Senate HLP Committee bill contains a similar clause in § 3106 "A Health Benefit Plan Start-up Fund will be created to provide loans for initial operations, which the plan will be required to pay back no later than 10 years after the payment is made."
  7. ^ Wangsness, Lisa (June 21, 2009). "Health debate shifting to public vs. private". Boston Globe. Retrieved September 21, 2009.
  8. ^ a b Kranish, Michael (August 19, 2009). "Health co-ops' fans like cost and care: But successful models still rare nationwide". The Boston Globe.
  9. ^ Obama, Congress easing debate on public option - Beaver County Times
  10. ^ CNN: Senate panel votes down public option for health care bill. September 29, 2009.
  11. ^ Bankrate: Key details of health reform bills.
  12. ^ David D. Kirkpatrick, August 12, 2009, "Obama is taking an active role in talks on health care plan", New York Times
  13. ^ Washington Post: "Obama never secretly killed the public option. It's a myth". November 17, 2011.
  14. ^ "House Dems push again for creation of government-run health insurance option" The Hill, January 16, 2013
  15. ^ "Cosponsors: H.R.265 — 114th Congress (2015-2016)" Congress.gov, August 5, 2016
  16. ^ Hillary Clinton: The Briefing: Hillary Clinton's Commitment: Universal, Quality, Affordable Health Care for Everyone in America. July 9, 2016.
  17. ^ Truth Out: "Sanders Cites Democratic Platform, Public Option as Basis for Endorsing Clinton". July 13, 2016.
  18. ^ NPR: Obama Renews Call For A 'Public Option' In Federal Health Law. July 11, 2016.
  19. ^ McManus, Doyle (November 20, 2019). "Elizabeth Warren's pivot on 'Medicare for all' shows the tricky politics of healthcare". Los Angeles Times. Retrieved January 22, 2020.
  20. ^ O'Sullivan, Joseph (May 14, 2019). "Washingtonians to get public option on state's health-insurance exchange". Seattle Times. Retrieved January 22, 2020.
  21. ^ Scott, Dylan (June 17, 2021). "The public option is now a reality in 3 states". Vox. Retrieved January 1, 2023.
  22. ^ "Cascade Select (public option) | Washington State Health Care Authority". www.hca.wa.gov. Retrieved January 1, 2023.
  23. ^ Kaur, Simrandeep (September 13, 2019). "States Continue to Explore a Public-Option Plan to Offer Affordable Healthcare". decisionresourcesgroup.com. Retrieved January 22, 2019.
  24. ^ Salary.com (Accessed: May 2, 2020): "Aetna Inc. Executive Salaries (Data for years 2006-2017)", Aetna.
  25. Aetna Inc
    .
  26. ^ a b Washington Post: 8 Questions About Health-Care Reform.
  27. ^ Gauvey Herbert, David (January 2, 2011) "Public Option" Archived March 29, 2012, at the Wayback Machine, National Journal.
  28. ^ Paul Krugman (June 22, 2009). "Competition, redefined". The New York Times. Retrieved October 10, 2009.
  29. ^ "Robert Reich Public Option Video". YouTube. Archived from the original on December 21, 2021.
  30. ^ "How Pharma and Insurance Intend to Kill the Public Option, And What Obama and the Rest of Us Must Do". Archived from the original on June 11, 2009.
  31. ^ "Obama: Public option should be part of reform". NBC News. September 7, 2009.
  32. ^ Weiner, Rachel (September 9, 2009). "Obama Health Care Speech: FULL VIDEO, TEXT". Huffington Post.
  33. ^ Houston Chronicle: Jackson Lee predicts "vigorous public option" on health care. July 31, 2009
  34. ^ CNN: The marketing of Obamacare exchanges begins. June 21, 2013.
  35. ^ Kranish, Michael (August 19, 2009). "Health co-ops' fans like cost and care: But successful models still rare nationwide". The Boston Globe.
  36. ^ "Are health care co-ops the answer for reforming the system?" Archived August 22, 2009, at the Wayback Machine Kansas City Star
  37. ^ New York Times: ""Baucus and the Threshold"", Paul Krugman, September 17, 2009
  38. ^ Colliver, Victoria (May 30, 2009). "Health care activists lament single-payer snub". San Francisco Chronicle. Retrieved October 10, 2009.
  39. ^ H.R. 676
  40. ^ "House Reps Introduce Medicare-for-All Bill" Becker's Hospital Review, February 14, 2013
  41. ^ Remarks by the President to a joint session of Congress on health care Archived January 15, 2012, at the Wayback Machine
  42. ^ "Obama on single payer health insurance" Youtube]
  43. ^ Ezra Klein. "A guide to the public option compromises in the Senate". The Washington Post.
  44. ^ Alec MacGillis, "Health-care reform and abortion coverage: Questions and answers", Washington Post, November 14, 2009.
  45. ^ Molly Hooper, "Cantor: Public option poll 'skewed'", Blog Briefing Room, 10/21/09
  46. CATO Institute
    . Retrieved October 10, 2009.
  47. ^ Key Issues in Analyzing Major Health Insurance Proposals (PDF). Washington, DC 20515: Congressional Budget Office. 2008. pp. 69–70.{{cite book}}: CS1 maint: location (link)
  48. ^ "Government as 'Competitor': The Latest Prescription for Government Control of Health Care". The Heritage Foundation. August 14, 2008.
  49. ^ The Huffington Post: "Is the House Health Care Bill Better than Nothing?" Marcia Angell, M. D., November 9, 2009.
  50. News Hour with Jim Lehrer
    . August 18, 2009.
  51. ^ "57% oppose reforming healthcare without including the public option". Rasmussen Reports.
  52. ^ "50% Oppose Government Health Insurance Company". Rasmussen Reports. July 17, 2009. Retrieved August 28, 2009.
  53. MSNBC.com. Archived from the original
    on August 21, 2009. Retrieved August 27, 2009.
  54. ^ "U.S. Voters Back Public Insurance 2-1, But Won't Use It". Quinnipiac University. July 1, 2009. Archived from the original on July 3, 2009. Retrieved September 4, 2009.
  55. ^ "News Poll #15699 "Health Care Data Gathered Using NBC News Wall Street Journal Questions" on 8/19/09". SurveyUSA. August 20, 2009.
  56. ^ "Mixed Views of Economic Policies and Health Care Reform Persist". Pew Research Center. October 8, 2009. Archived from the original on December 9, 2009. Retrieved October 9, 2009.
  57. ^ Washington Post: Public option gains support. October 20, 2009.
  58. ^ Fritze, John (October 27, 2009). "Dems Advance opt-out 'public option'". USA Today.
  59. ^ Connelly, Joel (November 20, 2009). "New Poll: Voters back, but also fear, health reform". Seattle Post-Intelligencer.
  60. ^ [1] Archived October 31, 2009, at the Wayback Machine
  61. ^ Dick Durbin Public Option Poll Results GetActive Software, Inc., November 16, 2009
  62. ^ "NPR PBS-NewsHour Marist-Poll USA-NOS-and-Tables" (PDF). Marist Poll. Retrieved January 22, 2020.
  63. ^ "Public Opinion on Single-Payer, National Health Plans, and Expanding Access to Medicare Coverage". kff.org. November 26, 2019. Retrieved January 22, 2019.
  64. ^ "BIDEN RETAKES LEAD AS WARREN PLUNGES, BUTTIGIEG RISES, QUINNIPIAC UNIVERSITY NATIONAL POLL FINDS; VOTERS NOT SWAYED BY IMPEACHMENT HEARINGS". poll.qu.edu. November 26, 2019. Retrieved January 22, 2019.
  65. National Public Radio
    . Retrieved October 10, 2009.
  66. ^ Salomeh Keyhani, M.D., M.P.H., and Alex Federman, M.D., M.P.H. "Doctors on Coverage — Physicians' Views on a New Public Insurance Option and Medicare Expansion" NEJM • September 14, 2009.
  67. ^ "45% Of Doctors Would Consider Quitting If Congress Passes Health Care Overhaul". Investors.com. September 15, 2009. Retrieved January 18, 2016.
  68. ^ IBD/TIPP doctors poll is not trustworthy
  69. S2CID 210842547
    .
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