Can a public health insurance option hold down spending, or will it lead to medicine by committee? : Joseph Hight
Author: Www.easytoinsureme.com
Source: articlesbase.com
Can a public health insurance option hold down health care spending?In a previous column I asked, “So if it is new and better medical treatments … and expanding health insurance coverage that increases overall spending on health care, how are we going to get this spending under control?”Indeed, that is the $ trillion question.One way that has been proposed to hold down health care spending is through a public health insurance option: a government run health insurance plan to compete with private health insurers. It would aim only to cover its costs. The theory is that a government plan could restrain health care costs through its bargaining power with health care providers. Using this bargaining power, it will set prices it will pay for certain procedures just as Medicaid and Medicare now do. Paul Krugman, Nobel Prize winning economist and New York Times syndicated columnist argued the case this way, “And that’s why the public plan is an important part of reform: It would help keep costs down through a combination of low overhead and bargaining power. That’s not an abstract hypothesis, it’s a conclusion based on solid experience. Currently, Medicare has much lower administrative costs than private insurance companies, while federal health-care programs other than Medicare (which isn’t allowed to bargain over drug prices) pay much less for prescription drugs than nonfederal buyers. There’s every reason to believe that a public option could achieve similar savings.”Democrats are putting faith in a public health insurance option that would compete with private insurance plans. Three congressional committees
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