Report Finds Public Option for Health Insurance Could ‘Limit Competition and Consumer Choice’

August 31, 2020 by Dan McCue
Report Finds Public Option for Health Insurance Could ‘Limit Competition and Consumer Choice’

WASHINGTON – As America inches toward perhaps the most consequential election in its history — the first to be played out against the backdrop of a global viral pandemic — a heated debate continues to rage.

Since the election of President Donald Trump, he and his Republican allies in Congress have worked diligently to undermine key protections of the Affordable Care Act.

Though they tried once, and failed, to outright repeal it, there’s little doubt they will try again should Trump win re-election and they retain control of at least one chamber of Congress.

Meanwhile, the minority progressive wing of the Democratic party has been pushing for one size fits all government health care programs, such as Medicare for All, that could reduce choice and increase costs for everyone.

That proposal lacked popular support during the Democratic presidential primaries, as one after another of its proponents dropped out of the race.  But it helped to revive the idea of creating a so-called national public option that would allow individuals to purchase a public, government-sponsored, insurance plan.  Supporters argue that such a system could have mitigated some of the challenges the country is experiencing today.

But a new report, “The Public Option in the 2020 Economic Environment,” from FTI Consulting, suggests that while the pandemic has renewed debate over these proposals, it has also proven the resilience of the American health care system.

Yes, Americans did find the pandemic exacerbated long standing financial and access challenges associated with their health care, particularly for lower-income and minority communities.

However, the consultancy found that health care service providers crisscrossed the country to meet the needs of patients in communities overwhelmed by outbreaks, and many private insurance plans waived out-of-pocket costs to ensure continued access to medical services.

And throughout the crisis, Medicaid, COBRA and the individual insurance marketplaces have continued to function as a critical backstop for furloughed and laid-off Americans, who lost their employer-sponsored coverage.

For the sake of comparison, FTI Consulting compared the current health care system to a hypothetical U.S. health care system with a fully implemented and mature public option.

Key Findings

Among the key findings in the FTI Consulting report are that:

  • Under the current system, hospitals are projected to lose $49.6 billion in revenues nationwide in 2020. Under a public option scenario, those losses would exceed $79.2 billion in total. That financial hit to providers would come on top of losses incurred solely as a result of implementation of the public option, the consultancy said.
  • Under a public option, losses of commercial insurance revenues would be even greater, amounting to $20 billion for rural hospitals. For providers operating with tight margins – particularly those in rural and underserved communities – such losses could lead to the elimination of critical service lines or even facility closures.
  • Any changes in service offerings or in the number of hospitals that remain operational could create access challenges for patients, especially those insured under the public option, living in rural areas or both. Many of these individuals may already have difficulty finding in-network providers or health care facilities close to home.
  • Rural areas could be disproportionately impacted given that patients living there are more likely to be older, sicker and to rely on public health insurance. States deemed COVID-19 “hot spots” including California, Texas, Florida, Georgia, and Arizona will experience significant financial consequences as a result of the pandemic.
  • Reductions in operating margins under a public option scenario could have serious implications for preparedness efforts. Diminished margins would limit the resources available to expand intensive care units, procure supplies and enhance staffing.

A+
a-
  • Affordable Care Act
  • health
  • Health Insurance
  • public option
  • In The News

    Health

    Voting

    Health

    July 15, 2025
    by Sydney Devory
    DC Schools Prioritize Free Meals for Students

    WASHINGTON — The District of Columbia is committed to providing free meals for students in need despite challenges created by... Read More

    WASHINGTON — The District of Columbia is committed to providing free meals for students in need despite challenges created by recent legislation. Seven million children are predicted to lose eligibility for free school lunches due to SNAP and Medicaid cuts in the Republicans' recently passed policy... Read More

    July 14, 2025
    by Jesse Zucker
    How Much Water Is Enough?

    WASHINGTON — Whether it's a Stanley tumbler clutched in the gym or a gallon-sized jug making the rounds on TikTok,... Read More

    WASHINGTON — Whether it's a Stanley tumbler clutched in the gym or a gallon-sized jug making the rounds on TikTok, staying hydrated has become a full-time obsession for some people. Summer only adds to the urgency. When it’s hot out, we really do need more water.... Read More

    July 14, 2025
    by Jesse Zucker
    Getting Back to Nature May Help Ease Back Pain

    WASHINGTON — A walk in the woods might not cure chronic pain, but it could help some people cope with... Read More

    WASHINGTON — A walk in the woods might not cure chronic pain, but it could help some people cope with the condition. A new study out of the U.K. dives into how people living with chronic low back pain experience natural spaces and what may prevent... Read More

    Nine Deaths in Fire at Massachusetts Assisted Living Facility

    FALL RIVER, Mass. (AP) — Nine people have died in a fire at an assisted living facility in Massachusetts, where... Read More

    FALL RIVER, Mass. (AP) — Nine people have died in a fire at an assisted living facility in Massachusetts, where people were hanging out of windows screaming for help, authorities said Monday. At least 30 people were injured. Firefighters responded to the Gabriel House assisted living... Read More

    July 11, 2025
    by Dan McCue
    HHS Bans Undocumented Immigrants From Head Start, Other Taxpayer-Funded Programs

    WASHINGTON — The Department of Health and Human Services on Thursday slammed the door on undocumented immigrants accessing taxpayer-funded programs,... Read More

    WASHINGTON — The Department of Health and Human Services on Thursday slammed the door on undocumented immigrants accessing taxpayer-funded programs, saying those benefits were never intended to subsidize those in the U.S. illegally. Specifically, the department rescinded a 1998 interpretation of the Personal Responsibility and Work... Read More

    July 11, 2025
    by Dan McCue
    Schumer Presses Kennedy to Declare Measles Emergency

    WASHINGTON — Senate Democratic Leader Chuck Schumer, D-N.Y., on Friday urged Health Secretary Robert F. Kennedy Jr. to declare a... Read More

    WASHINGTON — Senate Democratic Leader Chuck Schumer, D-N.Y., on Friday urged Health Secretary Robert F. Kennedy Jr. to declare a public health emergency for measles after confirmed cases of the virus reached their highest number in more than three decades. In a letter to Kennedy, Schumer... Read More

    News From The Well
    scroll top