PHAN calls for public option in national health reform

The Steering Committee of the Pennsylvania Health Advocacy Network (PHAN)has endorsed a public plan option as an essential part of national health reform.

Attached is a 1-page flyer describing why PHAN believes a strong public option is a necessary part of health reform

Prior to its May 15th endorsement of the public plan option, PHAN’s position on national reform had focused more on general principles: that it provide affordable access to health care for everyone and that the responsibility for paying for that care be shared among individuals, employers, and the public via our government.

But as the debate in Washington intensifies, attention has increasingly focused on very divided opinions around the question of whether or not the federal government should enter the market as a health insurance provider. PHAN’s leadership decided that it needed to take a position on that critical issue now, before bills being written in House and Senate committees are formally introduced.

The public plan option would be a government-administered insurance product similar to what is currently offered federal employees. It would be offered along with private plans and could be purchased by individuals who do not have coverage through their jobs. The cost of this plan would reflect the actual cost of the product; no government subsidies would be available that are not also available to private plans.

A crucial factor in PHAN’s decision to endorse a public plan is affordability. To afford universal coverage, the United States must find a way to bring escalating costs under control. A public health plan would help do that. Its administrative costs would be lower, it would not be operated for profit, it would pay providers based on outcomes and best practices in the treatment of chronic disease and disease prevention, and it would take advantage of volume discounts in the purchase of prescription drugs and other medical equipment.

Private insurance companies cite all of these efficiencies as reasons why they oppose a public plan. They claim they will be unable to compete against a public plan and will be driven out of business. Indeed, it is generally agreed that if a public plan is included in national reform, private insurance will survive only by adopting many public plan features and practices.

“This is a fork in the road for America,” said Berry Friesen, public affairs manager for PHAN. “Which is more important: bringing medical costs under control or preserving the existing business model of the insurance companies? We can’t do both. What PHAN has said, based on its principles, is that affordability is more important. That’s why we have endorsed the public plan.”

Pennsylvania’s two senators appear split on this issue. Senator Bob Casey has endorsed the public plan option; Senator Specter first indicated opposition to it and then more recently indicated willingness to consider a public plan if it operates under the same rules as private insurers do.

Public plan flyer (2).DOC