Research Report What Are the Effects of Alternative Public Option Proposals
John Holahan, Michael Simpson, Linda J. Blumberg
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As the Biden administration seeks to strengthen and improve upon the Affordable Care Act, a new series of papers from the Urban Institute analyze various options for introducing a public option and/or capped provider payment rates.

A public option, a government run program providing insurance that could be implemented in the nongroup or both the nongroup and employer markets, would generally set provider payment rates below commercial rates and could reduce government subsidy costs substantially. A capped rate policy, which would limit the payment rates paid by all insurers – not just control rates paid by a public option alone – could be combined with the public option and implemented in the nongroup or both nongroup and employer markets. Under this policy, enrollees could benefit from lower prices while keeping their preferred private insurance plan, savings could accrue to the federal government because lower premiums mean smaller subsidies, and more insurers could enter and exit markets than with the public option alone.

This research was supported by Arnold Ventures and is available here:

Introducing a Public Option or Capped Provider Payment Rates into Private Insurance Markets: Updated Estimates

Introducing a Public Option or Capped Provider Payment Rates into Concentrated Insurer and Hospital Markets

Public Option and Capped Provider Payment Rate Proposals That Exempt Rural Areas

Comparing Public Option and Capped Provider Payment Rate Proposals

Which Hospitals Could Be Financially Affected by a Public Option?

Reducing Private Insurance Hospital Payments Will Require a Lengthy Phase-In Period

Research and Evidence Health Policy
Expertise Health Care Coverage, Access, and Affordability
Tags Health care spending and costs