The public option isn’t an easy fix for health care. The way it’s presented in the proposed bill by House Minority Leader Nancy Pelosi and Senator Charles Schumer, it would allow individuals to choose a new type of insurance plan rather than the current exchange plans. On the one hand, the plan would allow people to choose between a government-run plan (the public option) or a brand-name insurance plan. But the “national quality or quality-based system” being proposed by the Democrats would include all insurance plans, to achieve what the text of the bill says is “a single national health insurance plan.”
This isn’t just an idea with no practical implications. A public option would bring a new level of competition to the health insurance market, boosting the bargaining power of businesses by allowing them to offer a broader range of coverage options. And it would mean that more people would buy into insurance plans. The Congressional Budget Office estimates that 83 percent of Americans would be able to get coverage, on average, under the public option, compared to 55 percent now. But the ACA has proven to be “extremely popular” because it “eliminates a number of the discriminatory aspects of the current health insurance market.” These aren’t just some conservative and liberal pseudoscience or fantasy, they are already the case. The public option would be an important part of giving people a choice.
Unfortunately, the bill, as it is written now, would work to undermine the ACA’s most popular features. The public option, at its core, would undermine the critical protections that are already in place under the ACA. The health insurance plan would be sold “off-exchange” to people who don’t currently have access to insurance. The public option would bring many younger and healthier Americans into insurance plans on the exchange, but it would also bring in many of the sickest and poorest customers who have been priced out of the insurance market. If Congress were able to round up enough votes, they could perhaps leverage support for the public option by fixing problems with the subsidies by redirecting the payments they use to shore up the program — but Congress would have to explicitly set those subsidies aside.
Perhaps, as some say, the ACA needs to be preserved while bringing in people who shouldn’t be on the exchange, and that would be a good thing. But millions of Americans would no longer have access to affordable insurance. The former subsidies would have to be made up with “new” subsidies; and the federal share of the costs would go up.
So the public option is no simple way to give people a choice.