October 2016

Both of these programs are public health insurance plans, but they are administered very differently and would have drastically different impacts on the healthcare system,

A public health insurance plan, also known as a “public option,” is a government-sponsored plan designed to compete alongside private insurers. It is intended to address the market failure where consumers are faced with only one or two health insurers offering coverage in their area. As a public plan it could have the power to dictate prices, provider networks, and provider reimbursements. It could also potentially indemnify itself for unexpected costs, allowing it to offer insurance at below-market costs.

Single-payer is a health insurance system that is wholly sponsored and administered by a single entity with no direct private market competition. Private insurers would not be able to offer any primary coverage, although in some proposals they would be able to offer supplemental coverage to those who choose to purchase. Providers would be compensated directly by the government, which would also set reimbursement rates, networks, and costs of services. Rationing of services would be among its strongest tool to control costs.

Existing public healthcare plans like Medicare and Medicaid already demonstrate the challenges faced by government-run insurance plans and their ability to provide adequate coverage to their beneficiaries. They may provide less coverage and restrict provider access more than the average employer-sponsored plan, with the Congressional Budget Office estimating that the benefit package for Medicare is 15% below the average employer-sponsored plan. Under Medicaid, specialists are often inaccessible without long waits. Extending this government-run coverage to all Americans would exacerbate these inefficiencies, high costs, and bureaucracy, along with unilaterally restricting consumer choice. Further, the experience of the ACA’s healthcare CO-OP program, where 16 of the 23 non-profit cooperatives failed after their first three years, demonstrates that challenges that would plague a fully government-run insurance plan.

Employee Benefit Advisor’s would like to acknowledge the National Association of Health Underwriters for the content of this blog. EBA is a member of NAHU.

The New York Times reports the Affordable Care Act may have to change to survive. Bill Clinton calls Obamacare the “Craziest thing in the world.” Bloomberg Politics reports Obama says ACS has “real Problems.”

Wasn’t Obamacare supposed to solve out countries insurance woes? Now, before it can be fully implemented – it is being recommended the Public Option is the answer. Why would anyone trust the same people that said we could keep our doctor and it would drive down health care cost – amongst other promises?

The public option would be a government-sponsored and government-run insurance plan, modeled after Medicare which would be offered as an alternative to the private-insurance plans. Democrats are saying it is needed to save Obamacare. What’s wrong with this model? Medicare adds another 3% administrative cost to insurance as it must pass through the insurance carriers and the government. Take away the insurance carriers (as some suggest) and now we have a government monopoly, with no competition, no checks-and-balances. We’ll have far worse than the VA on our hands. And rationing of health care will be a fact.

America will deserve the government it votes for, good or bad.

Call me a cynic.