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Life Health > Health Insurance > Your Practice

Public Plan May Split Hospitals, Docs

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Setting up a moderately aggressive public health insurance plan might cut doctors’ revenue 0.5% while increasing hospitals’ revenue 2%.

Researchers at the Lewin Group, Falls Church, Va., have published those estimates and others in an analysis of how setting a new public health insurance system for working-age U.S. residents might affect doctors, hospitals and health insurers.

A team led by John Sheils have assume that the new public plan, which would compete for business with private health insurers, would offer a plan design and benefits similar to those of the plan that covers members of Congress, with $15 co-payments for in-network care and a $250 deductible for out-of-network care.

The researchers assume that the government could set up a broad plan that would be open to all individuals and employers, and a narrow plan that would be open only to individuals, small groups and the self-employed.

The government plan could choose to pay roughly the same rates to doctors and hospitals that Medicare pays, roughly the same rates that private insurers pay, or rates half-way between the Medicare rates and the private insurer rates.

The plan with the most dramatic effect would be a plan open to all individuals and employers that paid Medicare rates, the Lewin researchers predict.

That plan would cut the number of U.S. residents with private health insurance to about 51 million, from 170 million today, the researchers predict.

If providers were willing to provide the care sought at Medicare rates, the Medicare for All Plan would cut hospitals revenue 4.6% and physicians’ revenue 6.8%, the researchers estimate.

A narrower plan that would pay rates half-way between private rates and Medicare rates, and accept only individuals, the self-employed and employers as enrollees, would cut the number of people with private coverage only about 21 million, to about 149 million.

That plan would increase revenue 2% and cut doctors’ revenue 0.5%.

A public plan that paid private-payer rates would have no effect on provider revenue but would be only about 10% less expensive than a comparable private plan, the researchers estimate.

The researchers estimate that plan would reduce the number of privately insured U.S. residents only 10 million if it were narrowly targeted and about 12 million if it were open to all.


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