Study: Public Option May Benefit Insurers

(AP)  What's all the fuss about?

After all the noise over Democrats' push for a government insurance plan to compete with private carriers, coverage numbers are finally in:

Two percent.

That's the estimated share of Americans younger than 65 who'd sign up for the public option plan under the health care bill that Speaker Nancy Pelosi, D-Calif., is steering toward House approval.

The underwhelming statistic is raising questions about whether the government plan will be the iron-fisted competitor that private insurers warn will shut them down or a niche operator that becomes a haven for patients with health insurance horror stories.

Some experts are wondering if lawmakers have wasted too much time arguing about the public plan, giving short shrift to basics such as ensuring that new coverage will be affordable.

"The public option is a significant issue, but its place in the debate is completely out of proportion to its actual importance to consumers," said Drew Altman, president of the nonpartisan Kaiser Family Foundation. "It has sucked all the oxygen out of the room and diverted attention from bread-and-butter consumer issues, such as affordable coverage and comprehensive benefits."

The Democratic health care bills would extend coverage to the uninsured by providing government help with premiums and prohibiting insurers from excluding people in poor health or charging them more. But to keep from piling more on the federal deficit, most of the uninsured will have to wait until 2013 for help. Even then, many will have to pay a significant share of their own health care costs.

More coverage of Health Care Reform

The latest look at the public option comes from the Congressional Budget Office, the nonpartisan economic analysts for lawmakers.

It found that the scaled-back government plan in the House bill wouldn't overtake private health insurance. To the contrary, it might help the insurers a little.

The budget office estimated that about 6 million people would sign up for the public option in 2019, when the House bill is fully phased in. That represents about 2 percent of a total of 282 million Americans under age 65. (Older people are covered through Medicare.)

The overwhelming majority of the population would remain in private health insurance plans sponsored by employers. Others, mainly low-income people, would be covered through an expanded Medicaid program.

To be fair, most people would not have access to the new public plan. Under the House bill, it would be offered through new insurance exchanges open only to those who buy coverage on their own or work for small companies. Yet even within that pool of 30 million people, only 1-in-5 would take the public option.

Who's likely to sign up?

The budget office said "a less healthy pool of enrollees" would probably be attracted to the public option, drawn by the prospect of looser rules on access to specialists and medical services.

As a result, premiums in the public plan would be higher than the average for private plans. That could nudge healthy middle-class workers and their families to sign up for private plans.

"The concern was that the public option would destabilize the bulk of private insurance, but in fact what Congress has fashioned is very targeted," said economist Karen Davis, president of the Commonwealth Fund. "It's not going to be taking away the insurance industry's core business."

It's unclear whether there are enough votes in the Senate for a public plan. The version that Majority Leader Harry Reid, D-Nev., has offered would let states opt out, probably leaving a smaller plan than the House would want.

Insurers aren't buying the budget office analysis. Asked if it might soften that opposition, industry spokesman Robert Zirkelbach of America's Health Insurance Plans responded with a curt "No."

While a government plan might start out modestly, insurers fear that Congress could change the rules later, opening it up to all people and setting take-it-or-leave payments for hospitals and medical providers, instead of negotiating, as the House bill calls for.

For the same reason, employer groups also remain wary. Big companies don't want to lose control of their health care budgets and instead have the government send them a tax bill.

"That cost is going to come back to you one way or another ... and it's coming back in the way of taxes and liabilities," said Eastman Kodak's chief executive, Antonio M. Perez, speaking for the Business Roundtable. "We just don't believe that there are miracles out there."

If Congress passes a public plan that's not much of a sensation, Democrats might have reason to regret all the time and energy they invested in it.

[babooph]

Tax "reform" was a wad for the rich-health "reform" will be a wad for the ins. co.-no need for sex "reform" the middle class was castrated during the alzheimered fools days...

[vernique]

what else is new. the rich get richer and the middle class gets poorer

[natdef_1]

Now all you Pro-Pelosi Progressive Pawns are REALLY CONFUSED, aren't you???

First, you throw your B@LLS on the line in support of this bill, as though it will singlehandedly save humankind from the "EVIL INSURANCE INDUSTRY."

Now, you find out, the Princess of Prevarication, Pelosi, has SOLD ALL YOUR SOULS TO THE INSURANCE INDUSTRY!!!!

What a beautiful irony.

MAYBE IF OBAMA HADN'T BROKEN HIS PROMISE TO HAVE THE HEALTHCARE NEGOTIATIONS TELEVISED ON CSPAN, INSTEAD OF HOLDING THEM ALL BEHIND CLOSED DOORS, YOU WOULD HAVE SEEN THIS ONE COMING!

Welcome to the beginning of your little nightmare. Next time you Libs feel the "AUDACITY TO GLOAT," realize that you are all, in fact, sheep too, just in different herd.

[askagain]

There are people who keep saying that health insurance rates will go down because of the public option. Nonsense. Rates are based on claims experience and expenses. Consumer report recently stated that the primary cause of health care costs are the doctors and hospitals. Hospitals are state regulated and must receive permission to raise rates. Unless doctor fees and hospital rates go down, premiums will not go down. Litigation was the least cause of premiums increasing. There is no way that we can insure everyone and subsidize those who can't afford the premiums without raising taxes and premiums. To believe that we can suddenly find and recoup 600 billion from Medicare is a fantasy. It hasn't been done in forty years. The only way to take money from Medicare is to lower Medicare coverage, raise the Medicare premiums, or do both. Some of you need to stop fooling yourselves.

[guest173]

we have to start somewhere. and if it gets more robust over the long haul, which is what the insurers are trying to now say according to the article, I think it will only be because the average American needs the help. corporations are not the only ones who should benefit and be wealthy and scam everyone else

[reveal4]

The most unprofitable policies will be covered by the public option...and, millions and millions more will be covered by private insurors. Primarily, younger, more healthy folks will be added to private insurance rolls. Larger rolls of healthier individuals equals cost savings for the average insuree according to the CBO.

[th9876]

the left, the right, everybody hates everybody else but the truth is in Washington DC, they are all the same. this health care "reform" bill is a sham. a total sham.

[reveal4]

The heading of the article states the public option will drive down premium costs for private insurors. The public option will save money for Americans.

[jsd330]

But for the next three years premiums are going to keep going up. Most of the big insurers have already raised their rates. They are doing the same thing the banks did with credit card intrest, raise it befor the bill goes into effect.

[reveal4]

Again, the public option will lower costs for private insurors. Lower, not raise....Lower.......Lower costs for premiums...Lower...not higher.

[jschmidt27]

So if a public option is going to be created for 2% of the uninsured, how much per person will it cost to create the public option? Is it going to like the stimulus which cost 160k per job? Is the govt going to spend tens of thousands to create a new system to insure each of the 2%. What a waste. I remind you the govt runs SS, Medicare and the postal service each big losers when it comes to money and efficiency. But liberals never care about the cost because it is OPM- other people's money.

[slownewsday-05]

I don't know, schmitty - many so-called "conservatives" are happy blowing money on unnecessary wars.

The Repubs are only social conservatives these days.

[us_1776]

The Republicans have wasted more taxpayer money on needless wars, needless citizen wiretapping, on decimating protections for our environment, and a whole list of other ridiculous stuff that have cost the American taxpayer MULTI-TRILLIONS OF DOLLARS and produced exactly zero return to the public treasury.

The last people I would ever trust with the public's money are the Republicans.

At least the Democrat's healthcare reform will actually reduce deficits. And that's a net gain.

[askagain]

Wallstreet isn't the only place you find sharpies. A prominent lawyer, John O'Quinn, was killed in an automobile accident. He received three billion dollars in fees from more than 3,000 breast-implant lawsuits. That is three billion dollars. How many zeros are in three billion? Dow Corning, the breast-implant manufacturer went bankrupt from these lawsuits. Where did its employees find jobs? And we wonder why things are so expensive. The irony is that this lawyer wasn't wearing a seat-belt.

[FauxNews]

Best news all week. Bet he is trying to sue God now for raining on the Allen Parkway.

[sean7phil]

I support a public option but this article gives me the creeps. It has no author listed but is written like an editorial column or a piece of marketing material while pretending to be straight journalism. Everyone should be concerned when the does this. Unless you want to call it an editorial keep your damn opinions out of the news.