The goal of health insurance reform is to provide quality, affordable health care for every American while preserving what works in today's system, expanding choice, and containing costs. America's Affordable Health Choices Act provides a public health insurance option that would compete with private insurers within the Health Insurance Exchange — giving consumers more choices, keeping insurance companies honest and increasing competition.
Learn more about the importance of the public option from health care experts:
John Holahan, Director and Linda J. Blumberg, Senior Fellow – Urban Institute Health Policy Center, 6/09:
A public plan would not destroy the private insurance market but would make it more competitive and lead to the benefits associated with competition. Many private plans would remain attractive because of their ability to be responsive to consumer demands and to be innovative in care management. Public plans are attractive because they can offer better access to necessary care for diverse populations, have lower administrative costs, and have strong negotiating power with providers. The presence of both types of plans should make each perform better in a reformed insurance marketplace. Most importantly, faced with competition from a public plan, private alternatives will become more efficient, leading to declines in their own costs. The net effect would be reduced growth in health care costs.
Jacob S. Hacker, Ph.D., Professor – UC Berkeley Department of Political Science and School of Law, 4/09:
The goal is a system in which private insurance and public insurance are encouraged to compete side by side to attract enrollees on a level playing field that rewards plans that deliver better value and health to their enrollees. Public insurance can be a benchmark for private plans and a source of stability for enrollees, especially those with substantial health needs. Private plans can provide an alternative for those who feel that public insurance does not serve their needs and a source of continuing pressure for innovation in benefit design and care management. And both should have a chance to prove their strengths and improve their weaknesses in a competitive partnership….Allowing public insurance and private plans to compete on a level playing field is the key to cost control and quality coverage.
Karen Davis, President and Cathy Schoen, Senior Vice President – The Commonwealth Fund, 3/09:
In recent years, the market for health insurance has become increasingly concentrated. In most states, three or fewer insurers account for over half of all enrollment. Indeed, in many states one carrier dominates, accounting for half or more of enrollment in the under-65 market. Insurance company margins increased rapidly in the early 2000s as market consolidation occurred and premiums outstripped increases in medical outlays…One advantage of a public health insurance plan is that it ensures markets work in the public interest and serves as a counterbalance to undue market power by insurers or providers. By offering a public health insurance plan that does not aim to make a profit and employing provider payment methods and rates that reward efficient providers, it protects the public interest against concentrated market power.
Uwe E. Reinhardt, Ph.D., Professor of Political Economy, Economics and Public Affairs – Princeton University, 4/09:
Many Americans may now seek the comfort of permanence that a fully portable, reliable and permanent government-run health insurance plan would offer them, side-by-side with the possibility of choosing a private health insurance plan instead. To deny them that opportunity would require a compelling justification… a public plan would not have to include in its premiums an allowance for profits and probably have low or no marketing costs.
Economic Policy Institute, 4/09:
Far too much of our health care system is characterized by limited or non-existent competition, both in the market for insurers as well as the market for providers. This lack of competition is a major source of the United States' uniquely high and rising health costs. A public plan option would force private insurers to compete on efficiency and quality, rather than on their ability to enroll the lowest-cost workers and firms. Furthermore, a public plan would introduce competition to currently monopolistic or oligopolistic insurer and provider markets — three or fewer insurers account for at least 65% of market share in 36 states.