Can a Public Insurance Plan Increase Competition and Lower the Costs of Health Reform?

Senator Barack Obama has proposed having a public plan available to those seeking coverage in a purchasing arrangement, such as the Federal Employees Health Benefits Plan. Senators Hillary Clinton and John Edwards had similar proposals. In the academic world, Jacob Hacker of Yale University has articulated the same proposal in his Health Care for Americans plan.2 Likewise, the reform approach we (with Len Nichols of the New America Foundation) outlined in 2001, under the auspices of the Robert Wood Johnson Foundation’s Covering America project, would have required each participating state’s purchasing pool to include its own managed fee for service plan.3