Features of Public Health Insurance

In the spring of 2009, a new government-controlled health insurance program, called the "public health insurance option," was initially proposed. Proponents of the public health insurance option said that it would help promote competition among insurance companies. Although this program didn't pass through the Senate and was not included in the health care reform bill of 2010, it continues to be a source of major debate in the United States.

Structure

• According to UC Berkeley Law School, a public health insurance plan would be rolled out by the federal government, which would then pay health care providers such as hospitals and physicians for the care they provide. This structure would be similar to that of Medicaid, the current government-controlled program that provides health insurance for low-income and needy people.

Coverage

• The proposed public health insurance plan would be for individuals who do not have access to an employee-sponsored health insurance option. This includes many hourly workers, such as restaurant employees, who are not insured through their employer. The proposed plan would include coverage for all essential medical services for people who are uninsured, such as preventive, disease management, maternal and mental health care. Supporters of public health insurance argue that administrative cost efficiencies will help ensure coverage for these groups without increasing taxes.

Support

• President Obama and U.S. Democrats support a public health insurance option. They say the plan would lead to lower administrative costs and would include lower-income Americans who can't afford health insurance. It would also put pressure on private health insurance companies to lower their rates because of the increased competition and lower prices available with the public health insurance plan. Most U.S. Republicans are against the public health insurance plan because they believe it will drive private insurers out of business and force businesses to get rid of private coverage, which would force people into the government-sponsored plan.

Costs

• Supporters of public health insurance say that the public plan will create administrative efficiencies and that increased competition will drive down health insurance costs. A public health insurance plan would decrease costs over time by controlling the rates at which health insurance prices increase. According to the Lewin Group, a healthcare policy research and management consulting firm, exercising cost controls would result in a health care system that covers 97 percent of the uninsured and saves the U.S. $1 trillion over ten years.

Quality Improvement

• Supporters of the public health insurance plan believe that it would improve quality of care because it offers greater incentives to invest in continuous improvement measures than private insurance. Due to the fact that public health insurance accepts any individual, the plan has strong incentives for the government to conduct comparative effectiveness research and develop treatment innovations. Supporters of the plan believe these improvements would lead to improvements in the private sector as well, since the public plan's data is more transparent.