Partnership Statement On Proposal For A New Government-Controlled Health Insurance System

WASHINGTON – The Partnership for America’s Health Care Future released the following statement after presidential candidate Tom Steyer released a proposal for a new government-controlled health insurance system:

“Whether overnight or over time, a new government-controlled health insurance system would eliminate every American’s existing health coverage and burden hardworking families with unaffordable new taxes.  Whether it is labeled Medicare for All, Medicare buy-in or the public option, it means Americans would be forced into a one-size-fits-all new government health insurance system controlled by politicians that would force them to pay more to wait longer for worse care,” said Lauren Crawford Shaver, executive director of the Partnership for America’s Health Care Future.  “With around 90 percent of Americans covered today and millions more eligible for coverage under our current system, candidates should instead build on what’s working and work together to fix what isn’t.” 

A new study from FTI Consulting reveals a new government-controlled health insurance system known as the public option could limit choice of coverage and care for millions of Americans and “eventually cause the elimination of all private plans in the individual market.”  The study finds:

• After the first 10 years of the public option, more than seven million current enrollees would no longer have private coverage through the marketplaces – with two million of those enrollees being forced off their private plans as insurers exit the marketplaces altogether.

• The study also warns that the public option could eventually cause the elimination of all private plans in the individual marketplaces, eliminating choice for millions of Americans, even those with the resources or subsidies available to cover their preferred plan.

• In fact, the report finds that by 2050, 70 percent of state marketplaces (34 U.S. states) would no longer offer a single private insurance option.

• Rural families – millions of whom already find their access to quality care at risk – would be especially hard hit by the public option, the study warns, and could find few if any options available to them.

Another study by KNG Health Consulting, LLC reveals that “Medicare for America,” a proposed new government-controlled health insurance system, could force one-third of American workers off of their current employer-provided health coverage, also known as employer-sponsored insurance (ESI).  And The Wall Street Journal reports that new government health insurance systems like the public option, Medicare buy-in and ‘Medicare for all who want it,’ represent “stepping stones to single payer.”  This fact has been acknowledged by journalists, analysts and Democratic presidential candidates:

• NBC News reporter Jonathan Allen explained to viewers that “[t]he public option is essentially a back door to Medicare for all.  You can say all day long if you want it’s not Medicare for all.  But this is a different packaging of how to get there.” (“Biden Releases Plan To Keep Obamacare,” YouTube, 7/15/19)

• Dr. Scott Atlas of Stanford University explains,such a system would raise costs for families and “mainly erode, or ‘crowd out,’ private insurance, rather than provide coverage to the uninsured.” (Scott W. Atlas, “Public Option Kills Private Insurance,” The Wall Street Journal, 7/16/19)

“The public option would cause premiums for private insurance to skyrocket because of underpayment by government insurance compared with costs for services … A single-payer option is not a moderate, compromise proposal.  Its inevitable consequence is the death of affordable private insurance … Massive taxation would be needed to expand Medicare, whether optionally or not.” (Scott W. Atlas, “Public Option Kills Private Insurance,” The Wall Street Journal, 7/16/19)

• The public option “could also lead to a 10 percent increase in premiums for the remaining pool of insured people.” (Reed Abelson, “How A Medicare Buy-In Or Public Option Could Threaten Obamacare,” The New York Times, 7/29/19)

• “[A] government buy-in that attracted older Americans could indeed raise premiums for those who remained in the A.C.A. markets, especially if those consumers had high medical costs.” (Reed Abelson, “How A Medicare Buy-In Or Public Option Could Threaten Obamacare,” The New York Times, 7/29/19)

• “[A] government plan that attracted people with expensive conditions could prove costly.” (Reed Abelson, “How A Medicare Buy-In Or Public Option Could Threaten Obamacare,” The New York Times, 7/29/19)

• And a report found that an effort to implement the public option in Colorado, “could imperil thousands of jobs in the health-care industry or take hundreds of millions of dollars out of the state’s economy.” (Ed Sealover, “Colorado Public-Option Insurance Plan Could Cost Health-Care Jobs, Study Argues,” Denver Business Journal, 9/10/19)

While headlines and studies also warn about the severe consequences such a government-controlled health insurance system would have on American families’ access to quality care, particularly in rural communities:

• The Gazette (Cedar Rapids): “Iowa’s rural hospitals could experience a loss of more than $476 million dollars under a public health insurance proposal, putting dozens at high risk for closure, according to an analysis … the analysis said those hospitals could be confronted with an even bigger detriment if a public option is implemented using Medicare reimbursement rates… If a public option plan would go into effect, the study found that between 25 and 52 of Iowa’s 90 rural hospitals would be at high financial risk for closure due to a loss of millions in revenue.”

• Las Vegas Review-Journal: “[H]ospitals lose money on Medicare patients … But if more people were on Medicare, those losses could be unsustainable.  An industry group estimates that more than 50 percent of rural hospitals would face a high risk of closure if a public option were in place.”

• Virginia Public Radio: “[A]s many as 10 rural hospitals in Virginia could close if the federal government starts offering a public option health plan – the kind of public option that’s now being talked about on the campaign trail by former Vice President Joe Biden and others.”

The study, conducted by Navigant for the Partnership for America’s Health Care Future, finds that the public option could put more than 1,000 rural U.S. hospitals in 46 states “at high risk of closure.”  These hospitals serve more than 60 million Americans, and as Kaiser Health News and NPR report, hospital closures can have “profound social, emotional and medical consequences,” while RevCycleIntelligence also reports,“[p]atient access to care suffers when a rural hospital closes its doors for good, and consequently, patient outcomes can deteriorate.”

• Another study by KNG Consulting found that “[f]or hospitals, the introduction of a public plan that reimburses providers using Medicare rates would compound financial stresses they are already facing, potentially impacting access to care and provider quality.

• An earlier study by Navigant found that government-controlled health insurance systems such as “buy-in” or “public option” could force hospitals to limit the care they provide, produce significant “layoffs” and “potentially force the closure of essential hospitals.

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