U.C. Berkeley Study Confirms The Value Of A Public Health Insurance Option

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A new public health insurance plan that competes directly with private
insurers is essential to controlling health care costs and improving
quality of care, according to a new report released yesterday by the
U.C. Berkeley Center On Health, Economic & Family Security.
President-elect Obama, his health care point person Tom Daschle, Senate
Finance Committee Chairman Sen. Max Baucus, D-MT, and House Ways and
Means Health Subcommittee Chairman Rep. Peter Stark, D-Calif., have all
embraced such a move.

Download the report at:

Highlights of the report include:

* A public health plan option like Medicare could result in $1 trillion in
national savings over ten years by driving down costs, improving
efficiencies and fostering innovation. 

* Premiums with a public plan cost about three-quarters the amount private insurers charge.

* Public health insurance is less expensive to administer that private
insurance plans.  The public Medicare plan’s administrative overhead
costs (in the range of 3 percent) are well below the overhead of large
companies that are self-insured (5 to 10 percent of premiums),
companies in the small group market (25 to 27 percent of premiums), and
individual insurance (40 percent of premiums).  The Congressional
Budget Office and the General Accounting Office have found that
administrative costs under the public Medicare plan are 2 percent of
expenditures compared to 16.7 percent by private health insurers under
Medicare Advantage.

* Access to medical care under Medicare is stable. 97 percent of
physicians are accepting new public Medicare plan patients-virtually
the same rate as are accepting private PPO patients-with 80 percent
reporting thay accepted all or most patients.  80 percent of people
with Medicare are either "extremely" or "very satisfied" with their health care and access to physicians, a higher rate than for 50 to 64 year olds with private insurance.

* The Federal Employees Health Benefits Plan, frequently invoked as a
model of national reform, fails to restrain costs.  The FEHB, which
contracts with private plans to provide health insurance to employees
of the federal government, has experienced an annual spending growth
rate of 7.3 percent-25% more than Medicare.  

Read Consumer Watchdog’s letter to President-elect Obama urging him to
fulfill his campaign pledge to make health care affordable and
available by allowing any American to join Medicare, regardless of age:

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Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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