Fact or fiction? Higher premiums in public plan

Claim: People in a government-run public plan would pay more for coverage than those in private plans.

In the struggle over health insurance reform, the primary goal of many Democrats has been to enact a government-run insurance plan, in addition to the existing ones, Medicaid and Medicare, which are open only to the poor, the disabled and those age 65 and older. Last June, President Obama said he supported a public plan "that's not profit-driven, that can keep down administrative costs, and that provides you good, quality care for a reasonable price." Democrats say a public plan would put pressure on private-sector insurers to control costs. The House insurance bill unveiled last week would create a public plan. But would some people do better by enrolling in a private insurance plan?

Fact or fiction?
Fact. In its assessment of the House bill released last week, the Congressional Budget Office said the public plan will "attract a less healthy pool of enrollees." Therefore, the CBO said, the House version of the public plan would "have premiums that are somewhat higher than the average premiums for the private plans" in the new insurance marketplaces that the bill would create. Urban Institute economist John Holahan, a public plan supporter, made this point last June: "The public plan is probably going to get sicker than average people" signing up. Many people "have had bad experiences with insurance companies. And they will probably gravitate toward the public plan," he said. As a result, "the public plan could have somewhat higher premiums."

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