What You Need to Know
- A federally administered public benefit option could offer the same benefits everywhere, or differ from state to state.
- A program could make Medicare providers participate, or give them a choice.
- Such a program may have its biggest effect on uninsureds who don't get an ACA enrollment tax subsidy.
The Congressional Budget Office has come out with a guide to designing a federally administered “public option” health insurance plan.
CBO analysts developed the guide in response to efforts by some members of Congress to introduce federal public option plan proposals.
The analysts discuss eight choices policymakers can make when designing a public option program, and how those choices might affect the nature of the health insurance market.
“The larger the public option’s competitive advantages, the more difficult it would be for private insurers to remain profitable,” the CBO analysts write.
“For example, if the public option was not required to conform with state benefit mandates or rating requirements and if it paid providers Medicare rates and required providers participating in other federal programs to join its network, private insurers would have difficulties retaining sufficient market share while keeping their premiums high enough to justify their participating.”