Tools to Fight Big Medicine: Establish a Public Insurance Option

The Problem

With successive reforms to the American healthcare system attempting to attain universal healthcare, American health insurance is still a patchwork of different government and private programs, ranging from Medicare for the elderly, Medicaid for low-income Americans, the VA for veterans, employer-sponsored private insurance for those of working age, as well as many health insurance plans on private state exchanges that were created by the 2010 Affordable Care Act. Despite these efforts, about 10% of the American population remains uninsured.[1]

Just as troubling, even those with insurance coverage often find it less reliable than expected. Insurance companies looking to maximize their profits will often deny claims for health procedures or services that they are obligated to pay for[2], or make patients and doctors jump through a range of bureaucratic hoops in order for their insurance to pay for covered services.

The Solution

State lawmakers can respond to this problem by establishing a public insurance option, following recent laws in Washington (2019), Nevada (2021), Colorado (2021), and Minnesota (2023). While the insurance would not be a free public benefit, it would have key benefits:

  • First, without the profit-maximizing incentives of most private health insurance companies today, a public insurance option would serve as a reliable source of health insurance for citizens who have found coverage repeatedly denied incorrectly by private health insurance plans.
  • Second, the existence of a public insurance option that upholds honest insurance and claims practices would impose discipline on private insurance companies in the state. For fear of losing customers and employers to a public plan that reliably and honestly provides coverage, private insurance would instead need to honor their coverage commitments to patients.

Notes

[1] Jennifer Tolbert, Patrick Drake, and Anthony Damico, “Key Facts About the Uninsured,” Kaiser Family Foundation, December 19, 2022, https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/#:~:text=The%20uninsured%20rate%20dropped%20in,to%202021%20(Figure%201).

[2] For example, see David Armstrong, Patrick Rucker, and Maya Miller, “UnitedHealthcare Tried to Deny Coverage to a Chronically Ill Patient. He Fought Back, Exposing the Insurer’s Inner Workings,” ProPublica, February 2, 2023, https://www.propublica.org/article/unitedhealth-healthcare-insurance-denial-ulcerative-colitis; Mari Devereaux, “Health systems see increasing claim denials as payer ‘delay tactic,’” Modern Healthcare, November 21, 2022, https://www.modernhealthcare.com/insurance/insurance-claim-denial-rates-rising-health-systems-struggle.