That estimate of enrollment reflects CBO’s assessment that a public plan paying negotiated rates would attract a broad network of providers but would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges. The rates the public plan pays to providers would, on average, probably be comparable to the rates paid by private insurers participating in the exchanges. The public plan would have lower administrative costs than those private plans but would probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees. (The effects of that “adverse selection” on the public plan’s premiums would be only partially offset by the “risk adjustment” procedures that would apply to all plans operating in the exchanges.)
I’m quite in favor of fixing our current healthcare system. Yes, I think that some sort of serious change is worth “punishing” most Americans in the name of the those who truly have been hurt by our current mangled, corporate system. I was withholding judgment on the public option; no longer am I. (And I’m still baffled that anyone advocates a freakin’ mandate.) It’s one thing to bill the taxpayers even more to cover further government involvement in healthcare. It’s quite another to do so and then to make this aid to the downtrodden more expensive than a quasi-market policy. But, hey, the Democrats already love them some Big Pharma types, so why not make this entire system even more of a clusterf**k?