A public health plan is currently being discussed as part of a number of health reform proposals being considered by President Obama and the Congress. The Cost and Coverage of a Public Plan: Alternative Design Options, a new report by the Lewin Group, examines the potential impacts that a public plan might have in competing for enrollment with the private insurance industry, based on different levels of eligibility and reimbursement rates.
The report estimates that if Medicare payment levels are used in the public plan, premiums would be up to 30 percent less than premiums for comparable private coverage. On average, the monthly premium in the public plan for a typical benefits package would be $761 per family compared with an average of $970 per family in the private market for the same coverage. If eligibility is limited to only small employers, individuals, and the self-employed, as the president proposed, public plan enrollment would reach an estimated 42.9 million people and the number of people with private coverage would fall by 32.0 million people.
The report also predicts that, assuming Medicare reimbursement rates and eligibility for all individuals and employers, provider net income would decline under this public plan proposal, even after accounting for reduced uncompensated care and increased utilization for the newly insured. Net hospital revenues would fall by $36 billion (4.6 percent), and physician net income would fall by $33 billion (6.8 percent). If eligibility is restricted to individuals and small firms, net hospital revenues would actually increase by $11.3 billion due to the increase in newly insured individuals. But net physician incomes would decline by $3.0 billion.
Read the report.
