2009 Archive

Health Care Study: Public Option Would Generate Savings, Benefits

The Berkeley Center on Health, Economic & Family Security has released a study that claims a public option in health care reform will likely create greater benefits and cost savings than has been projected by the Congressional Budget Office and other analysts.

Entitled “The Costs and Benefits of a Public Option in Health Care Reform,” the report was co-authored by center associate director Melissa Rodgers. It argues that previous estimates have understated the potential benefits of a public option by mistakenly treating the insurance and provider industries as perfectly competitive markets—and by not factoring in savings that would accrue from competition with a public plan.

The report found that existing studies don’t include hospitals’ monopolistic power to set high prices, and that the public option would be more attractive to consumers if providers who accept Medicare patients are required to accept public option patients. The authors’ recommendations include administering the public option at a national level, and making it available to all Americans—not just those without the possibility of employment-based coverage and small businesses.

More information about the report is available here.