What is the public option?
“The public option is an insurance plan run by the federal government that would compete directly against other plans on the market.”
As private health insurance becomes more expensive, many people are looking for alternatives. One idea, called the public option, is an insurance plan run by the federal government that would compete directly against other plans on the market.
Could the public option cost less than other plans?
“A public option plan would cost more than advertised.”
Supporters of the public option say it would offer lower premiums. But that's because it would pay doctors and hospitals considerably less than what private insurers must pay. Supporters also say that there would be no additional federal spending, since the public option is supposed to charge consumers premiums that would cover all the costs of the plan. But if history is any guide, the plan will cost more than advertised.
What is the difference between the public option and Medicare for All?
“The public option would compete against private health insurance plans.”
The public option is an insurance plan run by the federal government that would compete directly against other plans on the market. The public option works alongside the current health care system and does not replace private health insurance.
Medicare for All, on the other hand, refers to a plan in which the current health care system is replaced with a single-payer national health care program. Under a Medicare for All plan, private insurance companies would be replaced with a single, federally run program that would pay for all medical expenses.
If the public option can’t bring down insurance prices, what can?
“There are better ways to bring health insurance costs down.”
Though many people believe that the best way to lower insurance prices is through more government programs, there are market-based solutions to this problem.
Preventing insurers from pricing premiums based on risk unintentionally increases insurance costs for everyone else in the marketplace. When healthy people refuse to purchase health insurance due to higher costs, it causes insurers to raise prices even more, further disrupting those who are left in the market.
The solution is to provide higher-cost individuals with direct subsidies based on their financial needs, allowing healthy people to stay in the market, lowering overall prices, and providing opportunity for sick people to purchase health care at rates they can afford.
To learn more about how we can improve health care prices, watch our video “Keeping Health Insurance Affordable.”