"The public option we have in our bill is an insurance program that benefits, well, go back. Private insurance companies will be regulated and the standard benefits will be set, probably similar to Medicare, which is pretty broad in what it covers and then there would be add-ons, sort of like supplemental those of you already buy. We specify what exactly will be in those plans. Then there will be a plan that will be designed by Health and Human Services that will be what's referred to as the public option. It will be not-for-profit. It will be self-sustaining. It will receive no taxpayers subsidy. It will charge a premium that will be sufficient to pay the benefits.Got that?
For the start-ups, unlike private insurance companies, it will have no beneficiaries and no reserves. We will advance it a couple of billion dollars to get it started. We will repay the federal government out of premiums, not out of taxpayer money so that the public plan will be as financial independent as any other public company. You must spend 85 percent of what you take-in in terms of benefits just as other private insurers. The public plan will negotiate with hospitals, doctors just like the private companies do. Hopefully with our experience, it will have very low overhead. We like to think we can do it for less than 10 percent and there aren't many private insurance companies that can get that close. So, it is just there to set rates and standards by which the private companies will have to compete.
Our theory is we can sell you a family program or your employer for $10,000 for the standard benefit and you have to make the case you want to go to Aetna and pay them 12. I can't think of a particular reason for you to do that unless they came up with something we can't think of, which I doubt. It is there for us to hold down the costs and provide an option. We have many areas of the country--I think it's 30-odd states--where there are only one insurer. Talk about competition? If you go to South Dakota, it's Blue Cross and nobody else. In these communities, the public plan becomes the competition."
Thursday, August 13, 2009
'What exactly is the public option?'
Rather than blaming conservative commentators for the diminishing support of the current health care reform bills in Congress, maybe it's the fault of supporting Democrats for failing to explain it in an easily digestible sound bite. One of authors of the public option plan, Rep. Pete Stark, responded to the basic question Wednesday night from a member of the Alameda Democratic Club who asked, "What exactly is the public option?" The following is Stark's part incoherent ramble, part enlightening response measuring just under 400 words: