The Lewin Group | The Cost and Coverage Impacts of a Public Plan

John Sheils and Randy Haught. The Cost and Coverage Impacts of a Public Plan: Alternative Design Options. Staff Working Paper #4. Washington, DC: The Lewin Group, April 8, 2009.  Full text.  This study forecasts that if a public plan paid Medicare rates, it could offer premiums 30% below those of available private plans and attract 43-130 million people to the plan. The low displacement number reflected limiting eligibility to the individual and small-group market and the self-employed, and it pulled 32 million insured people out of the private insurance plans. The higher displacement number reflected no limits on eligibility and would pull 119 million people out of private coverage. If the public plan paid commercial payment rates, the attraction would be far smaller: 10-12 million insured people would switch. If the major outlines of the Lewin study are even partially accurate, the attractiveness of the public plan depends overwhelmingly on replicating Medicare’s payments rates and, presumably, payment methodology. Source: Jeff Goldsmith, Health Affairs Blog.

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