Tags: cbo | public | option | cost

CBO: Public Option Raises Health Costs

By Dan Weil   |   Thursday, 05 Nov 2009 08:39 AM

A public option for health insurance as envisioned by House Democrats will raise costs, according to a study from the non-partisan Congressional Budget Office.

The study says the government-run insurance plan would charge “somewhat higher” premiums than the average private insurance policy offering coverage to small businesses and individuals.

That conclusion runs contrary to the claims of President Obama and House Speaker Nancy Pelosi.

One reason why public option premiums would exceed private ones is that Pelosi, seeking more support for the House bill, rejected a “robust” public option, which would link provider reimbursements to Medicare rates to cut costs, Bloomberg reports.

Instead, she proposed that the government-run plan negotiate fees it pays doctors.

“The robust option had a lot more power to buy services from providers at much lower rates than private insurers paid,” Paul Ginsburg, head of the non-partisan Center for Studying Health System Change, told Bloomberg.

“That would have been a big deal.”

The CBO report also says healthcare costs will account for up to 20 percent of income for some families, even those getting subsidies, under plans proposed in the House.

Some experts say the public option is the focus of too much attention, as it would it draw few users.

"The public option is a significant issue, but its place in the debate is completely out of proportion to its actual importance to consumers," Drew Altman, president of the Kaiser Family Foundation, told the Associated Press.

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A public option for health insurance as envisioned by House Democrats will raise costs, according to a study from the non-partisan Congressional Budget Office.The study says the government-run insurance plan would charge “somewhat higher” premiums than the average private...
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