With a new president at the helm, policy changes may soon ensue. And more specifically, there may be changes and enhancements to the existing healthcare platforms. You’re probably already familiar with some of what President Biden is proposing as part of his “Bidencare” initiatives. But these Obamacare enhancements sound an awful lot like public offerings or even a Medicare-for-all system. We’ll shed some light on what you might expect, including the potential for an official public option for healthcare. Your business model might need to adjust accordingly.
Understanding the Public Option System
Public options proposals can all look very different. But the meat and potatoes of any public option plan devises a strategy to improve health insurance coverage and reduce costs by way of increased competition. Some programs achieve these goals with cost-sharing, others by lowering premiums. And those with Medicare coverage gaps would be able to take advantage of a public option, as would those with employer-sponsored insurance (ESI.) Under a public option, individuals can opt-in without a mandate. Private health insurance plans will still exist, but in order to remain competitive, Americans can expect a decrease in costs privately, as well.
Under the existing Obamacare platform, public options are not available. The introduction, however, of the Public Option Deficit Reduction Act offers an amendment that would enact a public option. The bill would establish a government operated health insurance coverage plan with premiums nearly 7% cheaper than private health insurance plans. But how would such a change affect your business?
Public Options Are Not Medicare-For-All Plans
Public option plans are not Medicare-for-all plans, although some of the principles are similar. Both seek to offer low-cost health insurance as non-profit ecosystems. Additional reductions for both public options and Medicare-for-all programs include prescriptions, beneficiary, and administrative charges, too. A public option health insurance plan as well as a Medicare-for-all type variation both provide solutions to any individuals unable to receive health insurance coverage through the private offerings. Target consumers who would likely benefit the most from either plan include those with pre-existing conditions and those with lower household income thresholds.
One of the most significant differences between Medicare-for-all and public options is the availability of plan choices. Under a Medicare-for-all style plan, Americans will only have one health insurance plan at their disposal. There would not be an opportunity to select a private insurance plan, nor would marketplace plans be available. The single insurance plan platform would likely have better control over reducing up-front fees and lowering healthcare costs. The one health insurance plan used in a Medicare-for-all plan would be entirely government-operated and funded by taxes.
The public option would not be a mandatory enrollment but instead an opt-in health insurance platform available to all Americans. Private insurance providers and Medicare plans would be viable options ongoing, as well. But the public option could function more like a single-payer, tax-funded, or paid for by individual enrollment. This ecosystem of health insurance options would ultimately create a strong competitive market, capable of driving down costs at almost every level.
Public Options Don’t Have to Be Political
Politicians always make healthcare costs and health insurance a platform for discussion. And the result is a quasi-polarized response to public options, Medicare-for-all, and universal insurance ideas. There are a number of health-related companies and industries that continue to benefit from the current system, including pharmaceutical, hospital systems, and insurance providers. And maybe your business model thrives well in the current environment, as well. In reality and without the political lens, the public option variation could actually benefit millions of American families and bring more insurable individuals to the market, a win-win for both businesses of the industry and consumers alike.
The public option proposal is gaining in popularity, too. President Biden continues to stand by his “Bidencare” proposal, which would ultimately leverage the public option system to enhance the existing Obamacare system. Biden’s plan suggests the Affordable Care Act framework will improve with the following key allowances:
- Anyone can take advantage of the public option, including those who currently have employer-sponsored insurance.
- Public options won’t replace any existing coverages, including private plans and the Marketplace, both of which will remain intact.
- “Bidencare” will offer household income-based relief and assistance, including a no-premium option, for those who fall below the poverty line.
- Under “Bidencare,” the federal government will determine the framework, including the public option’s payment rates for providers.
Still Hesitant About Public Options’ Effects on Your Business?
Part of the hesitation to back this proposal, especially by those industries affected, is the uncanny similarity to a one-size-fits-all kind of insurance platform, with the federal government entirely in control. However, President Biden is very adamant about his opposition to a universal healthcare platform or government-controlled healthcare. In fact, his proposed public option only adds more providers to the market, in addition to Medicare, Medicaid, and private sector providers.
If you’re an insurance provider or work within the industry directly, you might be wondering if the public option design would undermine existing providers. The evidence so far indicates those with health insurance actually improve the financial health of healthcare providers and hospital systems. The more coverage people have, and the cheaper it is for them to find care, the more healthcare those individuals pursue. The other dynamic is that a public option would inspire a larger group of healthier individuals to enroll. Healthy individuals don’t incur the healthcare costs at a high rate, and bringing them into the risk pool of insured, will help to drive down the costs, even at the health insurance provider level.
No one really knew how many Americans were living without health insurance until the pandemic changed everything last year. And COVID also highlighted another significant pool of people who would lose health insurance coverage or face paying for a pricey COBRA extension, with furloughs and layoffs. Some reports suggest some 14.6 million Americans lost their individual or family coverage because of a job loss last year. Fortunately, many of them were able to enroll in a Medicare or Medicaid plan, thanks to the Affordable Care Act. The economic hits also shed light on just how underinsured many consumers were with their employer plans. Having a public option would allow better choices in both of these scenarios. It would also open up additional new enrollment and revenue opportunities for those businesses within the health insurance industry.
Any businesses operating within the healthcare or health insurance industries know that when new presidents come into power, there is potential for changes in policy and restrictions. But if you were worrying about “Bidencare” potentially impacting your bottom line, the public option design might prove to be the lucrative path forward. Only time will tell what Affordable Care Act enhancements will come to pass. For now, if you need help with your consumer engagement software and growth strategies, contact us!