COVERAGE: Three Views of the "Public Plan" Option

We keep hearing about the role of a "public plan" as an option under health reform, so we paid attention when the Kaiser Family Foundation asked three health policy experts on a webcast exactly what such an option would look like. We watched as Jacob Hacker, Yale professor, New America fellow and author of the “Health Care for America” plan, Linda Blumberg of the Urban Institute, and Stuart Butler of the Heritage Foundation grappled with this question. The hour-long discussion touched on many aspects of the public plan option—how they would compete with private plans, enrollment levels, payment policy, risk selection. You can see the webcast here (and a transcript will be available soon). But here's our impression of the major takeaways from each expert:

Hacker, whose health reform plan has a public option, was the strongest supporter of the idea. He argued that a public option would guarantee good, fixed benefits at a low cost, especially for the most vulnerable Americans. In his perfect world the option would be administered by the federal government, but he was careful to emphasize that it would not be “Medicare for all.” He sees a public option as another competitor with private plans under a shared public/private health system.

Blumberg took a more nuanced approach, arguing that if a public plan is set in competition against private plans, people will make choices based on available benefits, not on who’s running the plan. Additionally, she reminded us that as our economy stalls, covering more Americans may be tougher to do, but it is all the more important. And finally,she argued that any health reform, especially one with a public plan option, will function much better if there is an individual mandate so that all Americans are in the risk pool.

Butler, the most conservative of the trio by far, agreed that a public plan option was a good idea—but he wanted the plan located at the state level rather than the national level. According to Butler, there is a national consensus, or shared value, on making good health care available to all Americans. But he thinks that the decision on how to achieve that should be left to states. In his view, the federal government will have to provide some money and set the parameters of what good coverage is, but it will be up to the states to decide how to cover their citizens, without federal micromanagement.