Public Plan Option: Fair Competition or a Recipe for Crowd-Out?

Source: Alliance for Health Reform and The Commonwealth Fund, Briefing, April 27, 2009

One of the various proposals to expand coverage to the more than 45 million uninsured Americans is referred to as the “public plan option.” Though proposed only as part of a broader effort to expand coverage, the option is viewed in varying lights. Some see it as a tool for providing consumers affordable coverage by stimulating competition on the basis of quality and efficiency. Others see it as unfair competition for private insurers and, in the extreme, as a path to a single-payer system. What is actually meant by a public plan and how would it work? Is there evidence of fair competition from public plans? Might private plans outperform a public option? What are some examples of private systems today that are delivering quality care efficiently? What can we learn about crowd-out from state initiatives? Would individual and employer mandates make the plan more palatable? To address these and related questions, the Alliance for Health Reform and The Commonwealth Fund sponsored an April 27 briefing.

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