Public Option's Premiums Would Be Higher
by
Don
10/30/2009, 6:13 PM #
Huh?
But is that true? Yesterday, in an analysis of House health care legislation, the CBO concluded that the six million people expected to enroll in the public option by 2019 will be paying, on average, higher premiums than will people buying private plans.
"[A] plan paying negotiated rates would attract a broad network of providers but would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges," wrote CBO chief Doug Elmendorf.
"The rates the public plan pays to providers would, on average, probably be comparable to the rates paid by private insurers participating in the exchanges. The public plan would have lower administrative costs than those private plans but would probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees. (The effects of that "adverse selection" on the public plan's premiums would be only partially offset by the "risk adjustment" procedures that would apply to all plans operating in the exchanges.)"
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