A Public Option Could Severely Limit Coverage Options for Consumers
As some politicians discuss creating unaffordable, new government-controlled health insurance systems like the public option, a new report shows that creating a national public option would limit consumer health coverage options and destabilize the Affordable Care Act (ACA) marketplaces.
The report by experts at FTI Consulting (FTI), supported by the Partnership for America’s Health Care Future, updates a previous assessment of the impact a public option would have on consumer choice and market stability in ACA marketplaces. Results from the new report reaffirm the previous findings surrounding consumer choice and market access.
- 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.
- 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.
- 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.
- 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.
- 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.
Unaffordable, new government-controlled health insurance systems like the public option could lead to fewer coverage options for Americans and a destabilized marketplace. Lawmakers in Congress need to focus on solutions that build on and improve what’s working in health care, not start over.