A Public Health Insurance Option: Accept No Substitute

Private health insurers are trying to make sure no public health insurance plan cuts into their market at a time when we’re enacting reforms to cover everyone.   Some of the compromises offered would let private plans have their way.

As union members we must fight for a strong, public health insurance plan in order to make coverage more affordable.  Escalating health care costs are a growing burden for working families, employers and the government.  A public health insurance plan will have lower administrative costs than private health insurance plans and it does not have to earn a profit.  These features, combined with its ability to establish payment rates, will result in lower premiums.

Here’s how it would work:

The public health insurance plan would compete on a level playing field with private plans and would be administered by government but funded through premiums.  Through competition, even those purchasing coverage from a private health insurance plan will benefit from lower costs.  When premiums are lower, that means less spending on federal subsidies for those who qualify for financial help.

A public health insurance plan will also drive quality improvements and more rational provider payments.  Because it is not motivated strictly by profit, a public plan can introduce innovations that private insurance companies have little incentive to implement.  Just as Medicare has led the way with reforms and improvements that the private plans are now adopting, a public health insurance plan can develop innovative payment mechanisms, expand quality incentives and adopt evidence-based protocols.

A public health insurance plan is the surest way to promote competition and keep private insurance companies honest.  In 2005, private insurance markets in 96% of metropolitan areas were considered highly concentrated and anti-competitive, which left consumers with little choice.  Coupled with a more regulated private insurance market, a public option will break the stranglehold a handful of companies have on the insurance market and will give consumers enough choices to vote with their feet and change plans.

And last but not least, a public health insurance plan guarantees stable and continuous coverage. If you lose or change jobs, a public plan will still be there for you. A public health insurance plan available to everyone will provide rural areas with the security of health benefits that are there when rural residents need them, just as Medicare has been a constant source of coverage as private Medicare Advantage and Part D plans churn in and out of rural areas every year. 

(Video: A recent television ad for health insurance reform, paid for by Health Care for America Now.  Top Ptoto: Wisconsin State AFL-CIO President David Newby, addressing the July 20 Rally for Health Insurance Reform in Fond Du Lac.  Photo Credit: Greg Hinds.  Bottom Photo: Members of IUOE Local 139 march for health insurance reform in the Milwaukee Labor Day Parade.  Photo Credit: Justin Geiger.)