This is The LewinGroup on Senator Max Baucus’ health care plan:

The Baucus proposal creates a public plan modeled on the Medicare program. Such a plan would be 20 to 30 percent less costly than comparable private insurance, due to lower provider payment levels and administrative costs under Medicare….. We have estimated that up to 70 percent of the 170 million people now with private health insurance would lose that coverage and enroll in the public plan. However, the Baucus plan appears to envision a less aggressive form of the public plan. His proposal states that “Rates paid to health care providers by this option would be determined by balancing the goals of increasing competition and ensuring access to high quality health care.” (emphasis added)

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  1. Bart says:

    Such a plan would be 20 to 30 percent less costly than comparable private insurance…

    If 70 percent of private enrollees switch to the public plan, then would this mean that provider rates for the remaining 30 percent would have to increase by 50 or 60 percent to allow for cost-shifting? I wonder if the Lewin Group’s estimates were static, or did they allow for feedback?

  2. Ron Greiner says:

    20% to 30% less than “comparable” private insurance?

    The Government Plan would be 30% off Hunana’s $57 monthly premium for a 30-year-old male, in Tampa, for HSA insurance? $57 X .70% = $39.90 per month.

    If the Government plan was $39 a month it would be competition. But Trust Me, it will cost the employee $200 a month and the employer will pay $200 a month (Or pay a fine) and the Government will make taxpayers pay $200 a month too. All the money will go to politically connected insurance companies with a government contract, like it always does.

    Too many citizens will want the low cost medically underwritten Individual Insurance (Example: $57/month) for that option to remain after health care reform.

    Imagine making term life insurance available without medical underwriting. The cost for a $1 million death benefit would explode for citizens.

    We need to save the low cost option for consumers.

  3. Bart says:

    Ron, I don’t think a low-cost underwritten plan would be considered “comparable insurance.”

  4. Bart says:

    I just remembered some algebra. Provider payment levels for private insurance would ‘only’ have to rise by 16 to 27 percent to cover the cost-shifting. The government provider payments would then be between 7 and 13 percent lower than the present-day baseline.