June 27, 2023 | Updates

ICYMI: A Public Option Could Severely Limit Coverage Options for Consumers  

WASHINGTON, D.C. – Last week, a new study from experts at FTI Consulting, on behalf of the Partnership, found that implementing a national public option could lead to limited consumer choice and marketplace instability. 

The new study from experts at FTI Consulting found that:   

  • By setting reimbursement rates below market value and cutting payments to providers, a public option would ultimately destabilize the market for private insurance, hinder access to providers, and threaten consumer choice as private insurers gradually leave the individual market entirely. (FTI Consulting, 6/21/23) 
  • By 2034, 20 percent of states could have no private plans available for their exchange populations to choose from following the introduction of a public option. By 2050, this figure would rise to half of all states with no private plans available. (FTI Consulting, 6/21/23) 
  • Providers could suffer financial losses of nearly $11 billion (in today’s dollars) as a result of fewer than two million people, or 13 percent of all enrollees, enrolled in private plans by 2050, threatening access to care for patients. (FTI Consulting, 6/21/23) 
  • As insurers gradually exit the marketplaces, nearly 300,000 Americans enrolled in ACA coverage would be removed from their existing health plan in the first year following the introduction of a public option. (FTI Consulting, 6/21/23) 
  • Over time, many individual market enrollees will be left to choose between just one remaining private insurance plan in their state and a public option. Meanwhile, providers facing lower payment rates under a public option may choose to favor patients enrolled in private plans to maintain financial stability. This could create a “two-tier” health system whereby enrollees in public and private insurance have access to different sets of health care providers and services. (FTI Consulting, 6/21/23) 

View the full findings here.  

Research continues to show that government-controlled health insurance systems, like the public option, Medicare buy-in, and Medicare for All, are not the future of health care in America. Instead, lawmakers should continue to build on and improve what’s working in health care to expand access to affordable, high-quality health coverage and care for every American.  



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