In the past I was critical of many DU'ers for not understanding that the public option, at least at the outset, would be pretty limited in who it could cover.
Yet know I'm finding a lot of misdirection from the other side. Yes, the public option is still limited, but it is not as limited as opponents of the House bill are saying it is.
Myth #1: The Public Option is Only Available to 2% of AmericansNo, the CBO
estimates that only 2% will sign up for the exchange. The CBO estimates that by 2019, only 10% of Americans will be on the exchange, and that 1/5 will choose the public option.
This is only an estimate. The CBO assumes that no businesses larger than 100 employees will be on the exchange in 2019. Yet the House bill permits the administrator of the exchange to open the exchange - and by extension the public plan - to ALL businesses, large and small, by 2015. That means that theoretically everyone with employer-based coverage could be on the exchange - and could by the public plan - by 2015. That's probably not going to happen by then, but it's certainly possible that 20%, 30% of Americans with employer-based coverage could wind up on the insurance exchange.
And the idea that only 1/5 will choose the public option is again an estimate. There's no way to tell, and it's possible that number could well go higher, esp. b/c many people may prefer a public option, even with comparable rates, simply because it is more reliable.
Myth #2: The Public Option Will Be MORE Expensive Than Private PlansAgain, the CBO did NOT say it
will be more expensive. It said it
might be more expensive, depending on who signs up for it. It estimated that the public plan may attract a somewhat unhealthier or older clientele that could not otherwise get affordable insurance. With a more expensive population to cover, it could wind up having somewhat higher premiums.
Two points about this: First, if it is functioning merely as a backstop option for those who are more unhealthy, that itself is providing a service, because in the absence of a public plan, these individuals would be paying
even more for private coverage.
Second, the CBO's estimates are somewhat conservative. As Jacob Hacker has noted, many people may be attracted to the public plan, simply because it isn't a private plan with all the headaches those plans give, similar to how the vast majority of seniors sign up for regular Medicare instead of Medicare Advantage, despite Medicare Advantage's subsidies and purportedly better benefits. And if the plan attracts more people, the rates may well be comparable or LESS than private insurance.
Also, it's important to note that IF private plans on the exchange are able to charge less than the public plan, that itself could well be a sign that
the public plan is working. If the public plan is an attractive option, and the only way for private insurers on the exchange to compete is to offer lower premiums, that shows that the public plan is doing its job, and forcing the industry to adapt and offer cheaper, better coverage.
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There's a lot in this bill that's flawed - especially Stupak's insane abortion amendment - but let's stop with the misinformation. The public plan is not as strong or robust as a Medicare-like option would have been. But if something like the House public plan endures in the final bill - it could very well become something quite big, and provide an important service.
Jacob Hacker - the originator of the "public option" idea - has
made precisely these points in stressing that the House bill's public plan is still a worthy and workable component.
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