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Health Insurance Reform Daily Mythbuster: Health Insurance Reform and the Public Option

Health insurance reform opponents continue to spread myths about America's Affordable Health Choices Act including what the public insurance option is and how it works. But more than 1,000 state legislators - representing all 50 states - have signed letters of support for including a public health insurance option in health reform legislation. Furthermore, poll after poll shows Americans strongly support the concept of a public option.

MYTH: The American people don't support including a public health insurance option in health insurance reform.

FACT: More than 1,000 state legislators - representing millions of Americans in all 50 states - have signed letters supporting a public health insurance option as part of comprehensive health insurance reform.

From the letter:

'...Key priorities for reform are reflected in recent state initiatives and public opinion polls which show that Americans want more choices and options for quality health care. Americans recognize that the private sector alone has proven incapable of creating a high-quality, fair, and accountable health care system that works for all families. Therefore, a key priority for reform is the choice of a public health insurance plan that is available to businesses, individuals, and families...'

And poll after poll shows an overwhelming majority of Americans - including more than 7 in 10 doctors - support a public health insurance option as a component of health insurance reform moving through Congress. That's one reason the health insurance industry has launched a campaign of misinformation against reform-they know Americans know competition's a good thing.

SUPPORT FOR A PUBLIC HEALTH INSURANCE OPTION

  • Wall Street Journal/NBC News: 73 percent [9/22/09]
  • Kaiser Family Foundation: 58 percent [9/29/09]
  • CBS News: 62 percent [10/9/09]
  • Quinnipiac: 61 percent [10/8/09]
  • New York Times/CBS News: 65 percent [9/25/09]
  • Robert Wood Johnson Foundation (physicians): 73 percent [9/14/09]

America's Affordable Health Choices Act will ensure all Americans have access to high quality, affordable health insurance. The only way to curb rising health care costs and put an end to unfair insurance company practices for all is to insure more Americans. Only with a bigger risk pool can the benefits of no discrimination for pre-existing conditions, no waiting periods, and no prices based on health status be enjoyed by all.

The House bill includes a new Health Insurance Exchange which allows individuals without coverage to comparison shop - encouraging plans to compete on price and quality and providing Americans more coverage options. One of the many choices of health insurance within the Exchange will be a public health insurance plan. It will provide important competition to private insurers - including in the many areas of our country dominated by just one or two private insurers today.

The public option will operate on a level playing field. It will be subject to the same market reforms and consumer protections as other private plans in the Exchange and it will be self-sustaining - financed only by its premiums.

Participating in the public plan will be up to the individual - no one can be forced into the public health insurance option. If an employer is providing their employees' health insurance through the Exchange, it is the employee - not the employer - choosing the plan. The only way someone would be in the public plan is as a result of their own individual choice.

Access to affordable health insurance options is critically important as this economic crisis continues to put pressure on Americans, their families and businesses. Our current health care system is unsustainable. According to a recent study by Hewitt Associates, workers can expect to see their premiums increase an estimated 10 percent next year alone and their total health contributions triple what they were paying in 2001.

'For a worker making $15 per hour, this $4,023 price tag is equivalent to seven weeks of work per year, with all of his or her income going directly toward health care-related costs (insurance and out of pocket expenses).' [9/29/09]

INSURANCE INDUSTRY LAUNCHES FULL-SCALE CAMPAIGN AGAINST REFORM

This week, the health insurance industry - led by the industry lobby group America's Health Insurance Plans [AHIP] - began a coordinated campaign of misinformation against reform that would bring competition and fairness to the insurance industry. These so-called studies from AHIP and Blue Cross Blue Shield and AHIP's million dollar ad buy have been widely discredited:

As the Associated Press reports in, 'FACT CHECK: Health Insurers Cherry-Pick Facts' -

'In its assaults on a Democratic health care overhaul bill, the insurance industry uses facts selectively and mixes accurate assertions with misleading spin and an embrace of worst-case scenarios...' [10/15/09]

John Rother, AARP Executive Vice President of Policy and Strategy

The report is 'fundamentally dishonest' and 'not worth the paper it's written on.' [AP, 10/13/09; AP, 10/13/09]

Karen Davis, President of the Commonwealth Fund

'The report released by America's Health Insurance Plans (AHIP) on the impact of health reform on the cost of private health insurance coverage... doesn't take into account any of the potential benefits from the structural reforms in the health reform proposals. Instead, this report isolates the impacts of only a few provisions, while ignoring many others, such as coverage of the uninsured, insurance market reforms, and consumer protections, which would elicit savings that would more than offset the costs of these specific provisions for insurers and households....The lack of real competition among insurance companies in many areas means that any additional costs faced by plans can simply be passed on to their subscribers, because there are few alternatives and relatively little market pressure preventing them from doing so. In a national insurance exchange framework (especially with a public plan option), private insurers would not find it so easy to pass on these 'costs,' and would have a strong incentive to push back against excessive provider payment increases and institute effective private sector cost containment tools.' [10/13/09]

Joint Statement

Henry J. Aaron, Brookings Institution

David Cutler, Harvard University

Judy Feder, Georgetown University, Senior Fellow at the Center for American Progress

Elliott S. Fisher, Dartmouth Medical School

Arnold Milstein, Institute for Health Policy Studies, UCSF School of Medicine

Len Nichols, New America Foundation

Meredith Rosenthal, Harvard University

'...We believe the study is flawed and that the results are not credible. The AHIP study is misleading in several ways. First, it ignores critical elements of the insurance market reforms in the Senate Finance Committee bill that would protect people from many of the problems AHIP purports to analyze...it is important to note that most of the spending in the draft legislation will go for subsidies that directly lower the cost of health insurance for families and individuals with low or modest income. The report simply ignores this massive source of savings for millions of American households. Important issues are at stake in health reform. There is ample room for legitimate debate. But responsible participants in that debate should avoid selective use of evidence and try to preserve analytic balance.' [10/13/09]

Jonathan Gruber, a professor of economics at the Massachusetts Institute of Technology

Found the AHIP report deeply flawed. 'If you literally take the data from the Congressional Budget Office you can see that individuals will be saving money in a nongroup market.' [10/13/09]

Dean Baker, co-director of the Center for Economic Policy Research

'[T]he results of the study are quite suspect.' [10/12/09]