Partnership Statement On Latest Proposed New Government-Controlled Health Insurance System

WASHINGTON – The Partnership for America’s Health Care Future released the following statement regarding the latest proposal by a 2020 presidential hopeful for a new government-controlled health insurance system:

“Every American deserves access to quality and affordable health care, and we agree that building on our current system is the best way to achieve that goal. However, just like Medicare for All, the public option would ultimately force hardworking Americans into a one-size-fits-all system run by politicians, and make families pay more and wait longer for worse care,” said Lauren Crawford Shaver, executive director of the Partnership for America’s Health CareFuture.  “With around 90 percent of Americans covered and millions more eligible for coverage under our current system, presidential candidates should instead build on what’s working and work together to fix what isn’t – not start over.”

As The New York Times reported recently, the public option “could be plenty disruptive” and “tilt in the same direction” as Medicare for All.  This is backed up by the findings of a new study, conducted by FTI Consulting for the Partnership for America’s Health Care Future, which reveals that the public option could eliminate consumer choice 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 would be especially hard hit by the public option, the study warns, and could find few if any options available to them.

As The New York Times also reported in their story, the public option “could shake up the private market and also wind up erasing some current insurance arrangements … There’s also the possibility that linking public-option coverage to Medicare could cause some doctors to stop accepting Medicare patients, [Sherry Glied, the dean of the N.Y.U. Wagner Graduate School of Public Service, and a former health official in the Obama administration] said.  That would be another form of politically risky disruption.”Further, The Times explains, the public option “could have effects on employer insurance …[T]he existence of a public option might also induce some employers to abandon private coverage altogether … If it took a lot of market share from private insurers, some might decide to stop selling certain lines of coverage.  Private insurance could disappear from some places, or exist largely to fill certain niches, like high-deductible plans.”

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

An additional study, conducted by Navigant for the Partnership, 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.”

• A study by KNG Consulting, which was supported by the American Hospital Association (AHA) and the Federation for American Hospitals (FAH), 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.

An analysis released by the American Action Forum (AAF), finds that a new government-controlled health insurance system known as Medicare Buy-in would cost an additional $184 billion that American families can’t afford.  Even worse, the new system would decrease access to doctors and health care providers by nine percent and would lead to a four percent decrease in medical productivity. 

Economists agree that the public option would burden American families with unaffordable costs.  “The public option would cause premiums for private insurance to skyrocket,” economist Dr. Scott Atlas of Stanford University writes in The Wall Street Journal.  “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,” Atlas continues.

• 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)

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