Many commercial insurers originally opposed public plans because they feared public option offerings would in effect be too much competition. (Photo: Shutterstock)
A public option—the type of government plan that was considered and rejected as part of the Affordable Care Act (ACA)—could put downward pressure on premiums in commercial ACA plans, a report says. The findings come from a new study by the Urban Institute.
The public option was an original, if controversial, piece of the ACA, but opposition from more conservative lawmakers led to it being scrapped. At the time, supporters argued that a public plan option would bring more competition to markets dominated by one or two large carriers. The current debate over Medicare for All and other health care reforms has included public option-type proposals.
Healthy competition, or undercutting commercial plans?
The study notes that many commercial insurers originally opposed public plans because they feared public option offerings would in effect be too much competition—that the public option rates would be too low for the commercial plans to match. The Urban Institute researchers explored the idea that a public option dynamic would be similar to state markets where managed care organizations have offered plans for Medicare and Medicaid enrollees. While not true public option offerings, these government-sponsored plans have competed with commercial ACA plans for several years now.
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