Ilovebenefits’s Blog

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To have a Public Plan or Not let me feel the goring

Editor’s note: Savings require, guess what, savings! Someone’s ox has to get gored. In the options discussed below, those with a public option lower the effective provider reimbursements!


A comprehensive approach to health insurance, provider payment, and care delivery system reforms has the potential to slow health care cost increases while achieving near-universal coverage. However, the potential savings for families, businesses, and the federal government vary markedly, depending on whether or not a public insurance plan option is included and how such a plan is structured, a new Commonwealth Fund analysis finds.

The new report, Fork in the Road: Alternative Paths to a High Performance U.S. Health System, is the first to compare three different scenarios: one that includes a public plan option in which health care providers would be paid at rates that fall midway between current Medicare rates and private plan rates, among other payment reforms; one that includes a public plan option that links payments more closely to Medicare rates; and one that includes no public plan, instead relying exclusively on private plans.

According to the analysis, cumulative health system savings between 2010 and 2020, compared with projected trends for that period, would range from a high of $3.0 trillion under the approach that includes a public plan paying providers at Medicare rates in competition with private plans, to $2.0 trillion for a public plan paying providers at rates midway between current Medicare and private plan rates, to $1.2 trillion in the private plans approach. All three approaches would make affordable coverage available to everyone.

Each reform path would include significant reforms to the way the nation pays for care, in order to reward value and efficiency rather than volume. But the two scenarios that include a public plan choice alongside private plans would spread reforms more quickly, reduce insurance administrative costs, and enable the federal government to expand coverage at less expense.

“The nation will be spending one out of every five dollars on health care by 2020, and millions more people will be uninsured,” said Commonwealth Fund president Karen Davis, a coauthor of the report. “This analysis shows we have a choice of paths that could lead to access for everyone, lower costs, and improved quality of care.”


June 24, 2009 - Posted by | Affordability, Economics of Health care, Federal Government | , , , ,

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