A Blueprint for Health Care Reform: Priority No. 3 - Choice of Private and Public Health Insurance P

Including a public health insurance option in health care reform — one of CWA's four priorities — has strong support from leading members of Congress and the public but faces a tough battle from insurance companies and some in Congress.

Senator Sherrod Brown (D-Ohio) and 27 co-sponsors introduced a "sense of the Senate" resolution calling a public insurance option essential for health care reform and reinforced that position in letters to the key Senate Committees that are drafting health care reform legislation. Senator Edward Kennedy, who chairs the Health, Education, Labor and Pension Committee, is a strong proponent of a public plan option. Senator Max Baucus heads the Finance Committee, the other key Senate committee that is drafting legislation. Baucus has asked Senator Charles Schumer (D-N.Y.) to take the lead on finding an acceptable solution; Schumer has laid out some key principles and is moving forward as the committee meets to look at ways to expand health care coverage. 

The leaders of the Congressional Progressive Caucus (CPC), the Black Caucus, the Hispanic Caucus and the Asian Pacific American Caucus all wrote to President Obama and Senate and House leadership, stressing that "our support for enacting legislation this year to guarantee affordable health care for all firmly hinges on the inclusion of a robust public health insurance plan like Medicare."

Why is a public option so important?

The current system is failing to control costs and insurance company abuses, because these private companies face no competition from a public plan. Private health insurance companies always find ways to put profits before people, by denying claims from policy holders who need care and refusing coverage for many others.

Over the past two decades, health insurance premiums have increased more than 270 percent while wages have increased just 58 percent. Average annual premiums for workers with family coverage have increased by 13 percent a year over the last nine years. That's four times the rate of inflation (Source: Kaiser Family Foundation).

Yet the number of uninsured is at an all time high of 46 million and workers are facing growing employer demands for more cost shifting and benefit cuts.

Medicare, the public plan for senior Americans, has been very successful in controlling costs and providing access for participants to needed care. Medicare administrative costs are much lower, at 2 percent, than for private plans which have high costs of 12 percent and more. Public insurance can and does set the standard for payment and quality-improvement methods. Most important, a public plan option will set a standard against which private plans must compete (Source: Institute for America's Future).

The private insurance industry strongly opposes a public plan option. These are the same insurers who demanded the right to compete to provide services for senior citizens under a Medicare program called Medicare Advantage, but only if they received a big government subsidy, now $7.5 billion a year. No surprise, these private plans still aren't competitive and charge seniors on average 12 percent more.