How Would a Public Option or a Capped Rate Policy Impact Private Insurance Markets?

by Jinghong Chen
Introducing a public option or a capped rate policy — both of which would limit the amount that commercial insurers reimburse providers — into the nongroup or both the nongroup and group markets could significantly reduce premiums, the number of uninsured and health care spending, according to a series of research from the Urban Institute. By analyzing various models, the report shows that limiting the reforms to nongroup markets where either insurers or hospitals or both are concentrated would increase coverage and reduce spending almost as much as applying them nationwide. As demonstrated in a case study on two California markets, both the public option and capped rate policy would reduce monthly premium costs for consumers.

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