New Public Option Bill Lowers Families’ Health Costs and the Deficit
Health care experts have long said that a public health insurance option not only would provide lower-cost health insurance for those who choose it but would also force private insurers to lower their premiums. A public option was a key element of the 2009 House-passed version of health care reform, but it did not make it to the final bill.
Now, as lawmakers focus on deficit reduction, with many Republicans calling for cuts in health care benefits and shifting even more costs to working families, the creation of a public option as a deficit-reducing tool—along with its other benefits—is back on the table.
On Tuesday, Reps. Jan Schakowsky (D-Ill.) and Henry Waxman (D-Calif.), along with 43 co-sponsors, introduced H.R. 26, the Public Option Deficit Reduction Act. This bill would offer consumers the choice of a publicly run health insurance plan, an option they say would save more than $100 billion over 10 years. Schakowsky says:
American health consumers deserve a publicly accountable, transparent and lower-cost option. The bill would provide that choice and lower the federal deficit at the same time. We cannot let for-profit insurance companies continue to prevent American consumers and American taxpayers from benefiting from passage of the public option.
She says that a public health insurance option would offer premiums 5% to 7% lower than private health insurance companies (according to the CBO).
And, by providing a lower-cost alternative to private insurance, it would put pressure on all insurers to lower their premiums in order to compete.
According to Schakowsky, the Congressional Budget Office has estimated a public option could reduce the deficit by $104 billion over 10 years. If coupled with other measures such as allowing Medicare to negotiate drug prices with pharmaceutical companies, the Economic Policy Institute (EPI) estimates a 10-year cost savings of $278 billion. That’s in addition to the health care cost savings the Affordable Care Act is already achieving.
Says Waxman:
As Congress looks to reduce the deficit, it is important to remember the one policy that could save billions of dollars is the public option.
A public option is part of the AFL-CIO's Solutions Agenda to stabilize the national debt over the long-term. Find out more of what Congress should do.
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