American Retired Seniors

Part I – Reducing Costs and Improving Quality.

By Frank Clemente with the Institute for America’s Future, Report: February 4, 2009

We can lower health care costs, provide greater efficiency and quality, give more financial security to people facing illness and help cover the costs of insuring the uninsured if we allow a public health insurance plan to compete on a level playing field with private insurance plans, a new study by the Institute for America’s Future shows. Read the report and related material [2] on the movement toward health care for all.While recent polling has shown consistent broad support for comprehensive health care reform, this poll specifically addressed whether people want a choice of a public health insurance plan. The answer is an overwhelming yes: 73% of voters want a choice of a private or public health insurance plan, including Democrats (77%), Independents (79%), and Republicans (63%).  Click here for the HCAN public opinion polling data

• 61% think a public health insurance plan will be better able to control health care costs by using its purchasing power to drive competition. Only 25% believe a public health insurance plan will shift higher costs onto the privately insured.
• 61% agree that millions of people are already losing their coverage every year, and a choice of private or public health insurance plans will make sure that Americans always have quality, affordable care. Only 27% believe the claim that a public health insurance plan will cause millions of people to be dumped from their private coverage
• Two thirds (66%) agree that a public health insurance plan will provide a choice with a standard, comprehensive package of benefits and a wide choice of doctors. Only 26% believe a public health insurance plan will force people into lower quality care including rationing and long waits.  

Executive Summary

President Barack Obama, Senate Finance Committee Chairman Max Baucus and others have proposed frameworks for reforming the health care system that would allow Americans to keep their employer-provided coverage or, if they do not have such coverage obtain it through a public or private insurance plan that is available through a “national health insurance exchange,” where plans would compete with each other for members. Like the public fee-for-service Medicare plan, the new public health insurance plan in this exchange would be managed by the federal government but would pay private health care providers to deliver care.

Click here for the report chartpack (PPT)

This report explains why a public health insurance plan that competes on a level playing field with private insurance plans in an exchange offers the best promise for reining in health care costs, encouraging greater efficiency and quality, and providing people with financial security. Moreover, authoritative studies show that the savings that can be achieved by insuring millions of people in a public health insurance plan may be enough to pay for covering the 46 million Americans currently without insurance.

The findings in this report are based on comparing information that is available about Medicare’s public health insurance plan (the traditional fee-for-service program); Medicare Advantage plans, which are run by private insurers; and the Federal Employees Health Benefits Program, which offers private insurance through an exchange only available to federal employees.

This report highlights the proven track record of significant cost savings that have been achieved under Medicare’s public health insurance plan relative to private insurance and ways to improve upon Medicare in constructing a new public health insurance plan for people under age 65.

The report contains these findings:

• Medicare has controlled health care costs much better than have private health insurers over the last 25 years.
• The private insurance market is highly consolidated and needs competition from a public health insurance plan to lower skyrocketing premiums.
• Administrative costs are dramatically lower under public health insurance plans, resulting in enormous savings to the system.
• The bargaining power of public health insurance plans significantly reduces provider costs.
• In a head-to-head competition, the public Medicare plan is much better at containing costs than private Medicare Advantage plans.
• Independent analyses show substantial savings can be achieved from a public health insurance plan that competes with private insurance plans.
• Quality and effectiveness innovations occurring under the public Medicare plan show that public health insurance plans have greater potential to drive the quality revolution than do private plans.
• Public health insurance plans increase choice, competition and accountability.

Resources - Campaign For America’s Future
•http://institute.ourfuture.org/files/A_Public_Health_Insurance_Plan_007_embargoe… [1]

• News Release [3]
• Full Report: “A Public Health Insurance Plan: Reducing Costs and Improving Quality” (PDF)[4]
• Report chartpack (PPT) [5]
• HCAN Public Opinion Polling done by Lake Research Partners [6]
• One page brief of key findings (PDF) [7]

Additional Resources

• Jacob Hacker: “The Case For Public Plan Choice in National Health Reform: Key to Cost Control and Quality Coverage” (PDF) [8]
• Jacob Hacker’s “Health Care for America” report and the Lewin Group cost analysis [9]
• Leaders and Experts Agree that a Public Insurance Option is Critical to the Success of Obama’s Health Reform Proposals (PDF) [10]

Filed under: Medicare and Health Insurance