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Puzzled about the public insurance option? Read this brief

I’m frequently asked to explain the public insurance option and how it would work — more so since the U.S. House of Representatives passed the Affordable Health Care for America Act.

Health Affairs and the Robert Wood Johnson Foundation have just published one of the clearest and objective explanations (pdf) I’ve seen about the controversial public option, including the pros and cons, the history, the nuts and bolts of how it would work, and the differences in proposals between the House and Senate.

A couple of samples from the brief:

Pro-option argument: “Advo­cates believe that the public plan would reinforce the effects of the legislation’s market reforms, such as banning coverage denials due to pre-existing medical conditions, and would serve as a check on insurers to help keep them honest.”

Anti-option: “Even though both the House and Senate health bills prohibit the govern­ment from bailing out a public plan that became insolvent, it’s probable, opponents say, that the gov­ernment would simply take on an open-ended finan­cial commitment if the public plan ran into financial difficulty. This would be because the congressional sponsors who fought hard to create the public plan would be loath to let it fail, the argument goes.”

The brief also takes note of the unanswered questions, including: “How much leverage would the public plan have to squeeze providers’ fees, and how would providers respond as a result?”

Casey Selix can be reached at cselix[at] Follow her on Twitter.

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