Public Health Option Will Save $1.8 Trillion

Public Health Option Means Taxpayer Savings

WASHINGTON (Reuters) – A nationwide health insurance exchange that includes a Medicare-like government option could save $1.8 trillion more than if only private plans are offered, a prominent private U.S. health policy group said on Wednesday. Federal spending on health-related costs would still rise from 2010 to 2020, but they would be less with a plan that pays doctors and hospital rates similar to the Medicare program for the elderly and disabled, according to a report by the Commonwealth Fund.

The New York-based health policy research group compared possible savings a health insurance exchange could bring under three different scenarios. One would include a Medicare-like plan along with private insurance. Another would instead offer a government-run plan with rates somewhat higher than Medicare. The final one would be private insurance with no government plan at all. Such an exchange would offer a central point for consumers to shop for and compare health plans. An exchange that instead offered a plan with rates slightly higher than Medicare but below current private plan rates would save nearly $800 billion over one with only private options, according to the Commonwealth Fund's analysis.

"Offering a public plan choice and the design of this choice makes a difference in the pace of change," said Cathy Schoen, the group's senior vice president. Whether Democrats' plan to revamp the U.S. health care system and provide coverage to the roughly 46 million uninsured Americans includes a government-run insurance plan is a major sticking point as Congress finalizes its proposal. Supporters say such an option would offer Americans an affordable alternative. Most people with health insurance in the United Stated get it through their employer or the government. But those who do not have coverage through work and do not qualify for Medicare or the Medicare program for the poor can face a tough time buying a policy.

The Commonwealth fund echoed those sentiments, saying private plans could lower premiums as more people seek insurance and that lower administrative costs with the government-run options may force private plans to streamline.

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