Public Option Models

Public Option Models

Policymakers can choose among a range of public option models depending on their policy goals. Here, we highlight three of the most common public option models that policymakers may want to consider. Our team is available to support policymakers in considering these and other public option models.

A public option could take the form of a new, government-funded plan offered as a competitor to traditional private health insurance plans. Under this model, the government would be responsible for bearing the financial risk associated with offering the public option (comparable to financial reserves that private health insurers must maintain to pay health care claims), although it could outsource some or all administrative functions to private contractors. Because it is not directly tied to an existing plan or program like a buy-in option discussed below, policymakers have significant flexibility in how to design this type of public option and could look to existing public coverage programs (such as Medicare, Medicaid, and/or CHIP) or the private market to inform key design decisions such as benefits, cost sharing, and provider payment rates.

To learn more about how this public option model could be structured, here are three recommended resources. You can find even more here.

A public option could take the form of a “buy in” to an existing public program or plan, such as Medicare, Medicaid, or a state or federal employee benefit plan. Under this model, like a new government-funded plan, the government would be responsible for bearing the financial risk associated with offering the public option, but it would be administered by—and leverage the existing infrastructure and purchasing power of—the agency running the original program or plan. Policymakers would have some flexibility in how to design a buy-in public option but could be limited by some of the features of the existing public coverage program. Design options include whether to keep buy-in members in a separate risk pool to limit the impact on any existing enrollees in the current public program.

To learn more about how this public option model could be structured, here are three recommended resources. You can find even more here.

A public option could take the form of a public-private partnership. Under this model, a public option would be administered and funded by a private entity (such as a private health insurer) on behalf of the government. Federal or state officials would contract with or otherwise require one or more private health insurers to offer a so-called public option plan that meets requirements dictated by the government (such as established provider payment rates or affordability targets), with the private health insurer bearing the financial risk. As with a buy-in model, policymakers would have some flexibility in how to design a public-private partnership public option but the plan would need to satisfy existing regulatory requirements for private health insurance.

To learn more about how this public option model could be structured, here are three recommended resources. You can find even more here.


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.

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