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Design of public option and capped provider price reforms: important interactions between provider prices and other program features
Design of public option and capped provider price reforms: important interactions between provider prices and other program features
- Collection:
- Health Policy and Services Research
- Series Title(s):
- U.S. health reform--monitoring and impact
- Author(s):
- Blumberg, Linda J., author
- Contributor(s):
- Robert Wood Johnson Foundation, issuing body.
Urban Institute, issuing body. - Publication:
- Washington, DC : Urban Institute, September 2021
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Costs and Cost Analysis -- economics
Insurance -- organization & administration
National Health Programs -- economics
United States - Genre(s):
- Technical Report
- Abstract:
- The 2020 presidential election brought discussions of introducing a public option into US health insurance markets back to the forefront of health policy debates. A public option would consist of a government-designed and administered (directly or via contract) health insurance plan or set of insurance plans that would be introduced in one or more health insurance markets. The federal government would determine payments made to providers (e.g., doctors, hospitals, pharmaceutical manufacturers) participating with a public option or negotiate prices with providers to attract them to participate; alternatively, state governments or a quasi-governmental or nonprofit entity could govern a public option. Conversations about public option plans have also prompted discussions about a related policy option, capping payments made to providers by commercial insurers. This strategy would require providers participating in particular insurance markets to accept prices from commercial insurers at or below a government-designated level. Thus, these capped prices would apply to providers participating in any private insurance plan offering coverage in the specified markets, whereas a public option would apply government-designated rates in new government-administered insurance plans alone. These two health reform approaches are related in that both seek to provide insurance options to consumers that would pay providers based upon payments determined (in the case of the public option) or limited (in the case of capped provider prices) by the federal government or its chosen agent. As noted, the public option would do so via a new insurance plan or set of insurance plans administered by the government, and the capped prices would do so via private insurers participating in the markets chosen. Depending on where these rates or rate limits are set, either approach could reduce premiums relative to current levels. Either policy could be used alone or in tandem with the other. Though people broadly support the idea of a public option and/or lowering the costs of health care (Politico 2020), 1 implementing such policies requires numerous design decisions, can have significant unintended consequences, and is politically challenging. Design decisions profoundly affect such policies’ abilities to meet their stated objectives, disruptions to the US health care system, and health care providers’ finances. Many of these design decisions interact with one another, meaning they ought to be considered together. This is especially true of how the chosen schedule of provider prices interacts with other design choices. Here I delineate the major design choices that must be made for public option and/or capped provider price reforms and outline their trade-offs in government costs, household costs, impacts on providers, and access to care. I explicitly recognize that a public option and capped provider prices paid by commercial insurers can be implemented independently or simultaneously.
- Copyright:
- Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY-NC-DC license. (More information)
- Extent:
- 1 online resource (1 PDF file (17 pages))
- NLM Unique ID:
- 9918299888606676 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/9918299888606676