A public health option (PHO) is government-introduced competition into the marketplace, wherein the government provides health benefits and health insurance as any private company might. Introducing this level of competition into the marketplace encourages rate reduction because to remain competitive, private insurance providers would need to compete with the plans offered by the U.S. government. Furthermore, in some states, private insurers have a near monopoly on the industry. If the Public Health Option were introduced into those markets, such insurers would have to lower their rates to compete with the government’s PHO.

There are, however, some concerns with the PHO. First, some argue that the federal government’s nearly limitless access to taxpayer dollars give it an unfair advantage in the market, as traditional providers cannot subsidize their revenues and services with arbitrary appropriations of taxpayer dollars. For private insurance companies, their costs, and ultimately the cost of our premiums and copays, are regulated by a complex ratio of claims and capital generated by new and existing plans. Those who argue against a PHO for these reasons suggest that the federal government would detract from their ability to gain new customers by offering alternative plans, premiums and policies. The response to this critique, however, is that that’s precisely what the federal government intends to do. For private insurers to remain competitive, they would have to reduce their rates, which could be problematic because some argue that the federal government is partially immune to market conditions since its access to taxpayer dollars serves as a source of revenue outside of the market.

There are others who suggest that a PHO would encourage doctors to provide their services through the government’s PHO rather than through a traditional private insurer’s PPO or HMO, and as such, the government would encourage private doctors to become government doctors. Though the previous argument has some basis, this argument lacks any real validity. First, one should note that a doctor, as with any health care plan, retains his/her private practice. What the doctor does agree, however, is to provide that service either as an in network or out of network provider. Depending on the plan you select, you will either pay lower rates and deductibles (if any) for in network providers and slightly higher rates for out of network providers. Though I haven’t read anything specific to this point, I would imagine that the same would hold true for a PHO.

Article Author: Jason J. Campbell

My name is Dr. Jason J. Campbell. I am an educator and a blogger. I am currently an Assistant Professor of Conflict Resolution and Philosophy at Nova Southeastern University. I hope you enjoy my articles.

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