Top Dems Say They’re Working on a ‘Public Option’ Health Care Plan
Health Care

Top Dems Say They’re Working on a ‘Public Option’ Health Care Plan

Reuters/Stephanie Keith

Two key Democratic lawmakers overseeing health policy on Wednesday announced they will look to craft legislation to create a government-run “public option” for health coverage, pushing ahead on one of President Joe Biden’s campaign promises even as the president has focused on other parts of his agenda.

Rep. Frank Pallone (D-NJ), chairman of the House Energy and Commerce Committee, and Sen Patty Murray (D-WA), chair of the Senate Health, Education, Labor and Pensions Committee, put out a call for ideas on how to design the legislation.

“We believe bold steps are necessary in order to achieve universal coverage and lower health care costs,” the lawmakers wrote in a letter addressed “to all interested parties.” “As we work to craft legislation, our priority is to establish a federally administered public option that provides quality, affordable health coverage throughout the United States.”

Their request asks for answers to eight broad questions, such as who should be eligible to enroll in a government-run plan, how benefits and payments should be structured and what kind of premium assistance should be offered.

Biden campaigned on creating a Medicare-like public option, pitching the idea as part of a plan to build on Obamacare — an alternative to calls from Sen. Bernie Sanders (I-VT) and others to eliminate private coverage entirely and transition to a single-payer “Medicare for All” system. But, despite some pressure from fellow Democrats, Biden has left a public option out of his major policy proposals thus far and reportedly will not include it in his forthcoming budget request even as he reiterates his support for the idea. The president has instead pushed plans to make Obamacare plans more affordable and accessible.

Insurers and hospitals oppose a public option and critics have argued that it would ultimately lead to “a one-size-fits-all” government health insurance system. The American Hospital Association said in a statement Wednesday that it opposes a public option because “inadequate reimbursement rates” would raise the risk of hospital closures.

Why it matters: The letter from Pallone and Murray “is the first indication that Democrats are still serious about the idea” of a public option, says Vox’s Dylan Scott. And Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation calls it “a serious effort by Senator Murray and Representative Pallone to take the public option from bumper sticker to workable legislation.”

A public option enjoys broad support in polls, with more than two-thirds of adults in an October 2020 Kaiser Family Foundation tracking poll — including 40% of Republicans — saying they strongly favor or somewhat favor the idea. But, as the questions in the Pallone-Murray letter suggest, a host of issues still need to be addressed, with reimbursement rates for doctors, hospitals, and drug companies atop that list. “A public option has the potential to reduce prices and make health care more affordable, but the further it goes in that direction, the bigger the blowback will be from the health care industry,” Levitt told the Associated Press. And while the industry pushes back, Republicans may also be likely to renew their attacks labeling the Democratic proposals as “socialist.”

The bottom line: While it’s notable that two leading Democrats are working on a public option, there’s no sign any legislation has a chance of passing in the near term.