A public health insurance option can be used to achieve a range of policy goals. But, like most challenging health care policies, policymakers will want to weigh the advantages and disadvantages, including the various tradeoffs, of adopting a public option. Here, we highlight several common policy goals that policymakers could pursue through a public option. Our team is available to support policymakers in developing and considering policy goals, public option design, and any associated tradeoffs.
Containing Health Care System Costs
A leading rationale for a public option is to contain costs in the health care system. Cost savings could come from a number of sources, including decreased provider and pharmaceutical payment rates, lower administrative costs, and eliminating the need for a profit margin. A lower-cost public option plan could also spur competition, leading to similar cost reductions among competing private health insurance plans.
Improving Affordability and Access to High-Quality Coverage
A public option can be designed to offer lower premiums for families and/or employers, while providing comprehensive benefits. By providing a more affordable coverage option, a public option can expand the number of people with high-quality health insurance. Public option plans can also set lower out-of-pocket costs relative to private plan offerings by, for instance, setting lower deductibles or covering more pre-deductible services. But these decisions involve tradeoffs, meaning policymakers will want to consider their options.
A public option can provide families and/or employers with an additional choice for comprehensive coverage by competing directly against private health insurance plans. Public option plans can also present a stark contrast to most private health insurance plans by offering a truly nonprofit coverage option with no need for profit or revenue maximization that drives private health insurers.
Expanding Public Delivery System Reforms
A public option can be used to expand the scope and impact of new and existing public initiatives to improve the quality or value of health care by extending them to a broader segment of the population. Savings from a public option plan could also be used by federal or state governments to promote equity and reduce disparities in health care.
We Are Here to Help
Our goal is to help policymakers consider and understand public option proposals. Policymakers and staff can contact our team about a specific question or with a broader request for technical assistance. Our experts are available to review materials and consult on policy solutions.