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CBO: Public Option Would Reduce Premiums Across the Board

Saturday 12 September 2009

by: Jonathan Walker  |  The Campaign For America's Future

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At an early September rally in San Francisco, a member of Elders for Health Care Reform shows her support for the public option. (Photo: janinsanfran / flickr)

    The CBO recently published a new letter on health care reform. They were asked to evaluate the impact of the weak (level playing field) public option in the Senate HELP committee's bill. Their conclusion was that the competitive pressure from the public option "would probably lower private premiums in the insurance exchanges to a small degree," and with a public plan in the exchange, "the costs and premiums of competing private plans would, on average, be slightly lower than if no public plan was available." By reducing the cost of buying private insurance on the exchange, a public plan "would tend to lower federal subsidy payments through the exchanges."

    It is important to remember that the premimums for an average health insurance plan for a family of four add up to $13,000 a year. Even reducing the cost by a very small 4% would be saving a family $520.

    The benefits of the public option would not be restricted to just the minority of people who choose to sign up for it. The public option would also reduce premiums for those choosing private plans. The public option would also reduce the overall government cost of health care reform.

    Progressives are not fighting for a public option for some purely ideological reason. They are fighting for it because Congress' own budget office concluded that even a weak public option would reduce the cost of health care reform and would save millions of Americans billions of dollars on their health insurance premiums, regardless if they select a private or public plan. A public option is both a smart and a very popular idea.

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Comments

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At a time when many

 Mon, 09/14/2009 - 18:19 — Anonymous (not verified)
At a time when many Americans are struggling to pay for basic food and housing, it is diabolical that Congress is considering a mandate that will force them to fund an insurance premium before paying for those essentials. In any other country, such a plan would be laughed out of the legislature. We need health CARE, not health INSURANCE. Our citizens and our country will go broke unless we control our health care costs. Any bill without a strong public option must be defeated.

There are two distinct kinds

 Mon, 09/14/2009 - 19:04 — Bob cassidy (not verified)
There are two distinct kinds of reform. One is health insurance reform and the other is health care reform. Not enough is being said about this. If insurance plans are required to take on riskier people, the premiums will have to be raised. Will they be required to pay for regular preventitive care? Only a public option or single payer plan might provide that.

The elephant in the room is

 Mon, 09/14/2009 - 22:38 — Kelly Krizan (not verified)
The elephant in the room is the fact that single payer, "Medicare for all" would save a cool 22% compared to what is now spent. Medicare overhead is in the area of 8%, the insurance industry overhead is about 30%. Despite this we cannot expect a single payer system because too many of OUR elected representatives have been bought by the insurance industry, big Pharma and other for profit health providers. If our representatives had the integrity to do the bidding of the majority of their constituents, we would have a single payer system. It is maddening that the "wink and a nod" bribery that runs the political system allows the subversion of the nation's health care debate.