TAILIEUCHUNG - THE CASE FOR PUBLIC PLAN CHOICE IN NATIONAL HEALTH REFORM KEY TO COST CONTROL AND QUALITY COVERAGE

Employers play an important and growing role in sponsoring private health cover as a workrelated benefit. A large part of private health insurance policies in OECD countries with the highest levels of PHI population coverage are provided through the workplace. For example, this is the case in the United States and Canada (almost 90% of PHI policies), the Netherlands (60%), and France (50%). Despite the expansion in eligibility for public health programmes, PHI coverage in Ireland has shown an uninterrupted growth over the past decades, linked to its increasing provision by employers within a fast growing economy. Employers appear to be more powerful agents than individuals. | BerkeleyLaw INSTITUTE-AMERICA SFUTURE UNIVERSITY OF CALIFORNIA Center on Health Economic Family Security University of California Berkeley School of Law 2440 Bancroft Way Suite 204 Berkeley CA 94704 510 64 8527 Fax 510 643 2362 THE CASE FOR PUBLIC PLAN CHOICE IN NATIONAL HEALTH REFORM KEY TO COST CONTROL AND QUALITY COVERAGE By Jacob S. Hacker . Professor of Political Science . Berkeley Co-Director Center for Health Economic Family Security . Berkeley School of Law Fellow New America Foundation EXECUTIVE SUMMARY eading political figures including President-Elect Barack Obama 1 Senate Finance Committee Chair Max Baucus 2 and Secretary-Designate of the Department of Health and Human Services Tom Daschle3 are proposing to offer a new public insurance option to Americans who lack employment-based coverage. The public plan would be similar to conventional Medicare the public Medicare plan as distinguished from private plans that contract with Medicare in that it would be managed by the federal government and pay private providers to deliver care. The public plan would be offered through a new national insurance exchange where it would compete with private insurance plans. This policy brief sets out the argument for public plan choice. The core argument is that public insurance has distinct strengths and thus offered as a choice on a level playing field with private plans can serve as an important benchmark for private insurance within a reformed health care framework. This is not an argument for a universal Medicare program but instead for a hybrid approach that builds on the best elements of the present system large group plans in the public and private sectors while putting in place a new means by which those without access to secure workplace insurance can choose among health plans that provide strong guarantees of quality affordable coverage. The case made in this brief is that this menu of health plans must .

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