Under this provision, it states that the Secretary of Health and Human Services is to develop an exchange-participating health benefits plan (public health insurance option) that guarantees choice, competition, and stability of affordable, high quality coverage throughout the United States. The secretary's main responsibility is to create a low cost plan that provides access to care and unchanged quality. This public health insurance option can only be offered through the Health Insurance Exchange, which is a marketplace organized by the government for the purchasing of public health plans. Although the public health insurance option is provided by the secretary, the offering still has to follow all the requirements that private health plans have to abide by such as benefits, benefit levels, provider networks, notices, consumer protections, and cost sharing.
The public health insurance option should offer three to four different levels of benefits which are basic, enhanced, and premium plans. It may also offer a fourth benefit level known as premium plus plans. Under administrative contracting, the secretary may enter contracts with outside firms to perform the required administrative functions. To attend to potential complaints, the secretary must establish an office of the ombudsman who is in charge of investigating the complaints made by the private persons against the public health insurance option. To determine the appropriate premiums and payment rates, the secretary must collect data on the insured to improve quality and to reduce racial, ethnic, and other disparities in health and health care. The public health insurance option from the secretary is to be classified as a Qualified Health Benefit Plan in the Health Insurance Exchange. Persons insured under the public health insurance option are reserved the right to have access to federal courts to enforce their rights under the plan.
I think that this provision will benefit the consumers because the public health insurance option is constructed to be affordable and provide good quality care. This provision also promotes competition between insurers within the Health Insurance Exchange which will in turn drive down prices. Benefactors of this provision include people of color and other disparities. This is true in that the public health insurance option considers everyone in the population before determining the payment rates and premiums. This will help eliminate adverse selection. Another big benefit that consumers get out of the public health insurance option is that there is an appointed ombudsman to attend to any complaints they may have about their benefits or rights not fulfilled under the requirements.
Insurance providers are losers of the public health insurance option due to the increased competition. As stated before, competition will decrease policy prices and cause insurers to receive a lower profit margin.
I think this public health insurance option is efficient because it lowers the price for consumers as well as prevent insurers from overcharging. It is also efficient because adverse selection is eliminated. This will minimize the use of more costly access to health care such as the emergency room.